Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 11)
This article summarises all CESTAT orders published in the Taxscan.in. No Service Tax Liability on Foreign Commission Payments under RCM as They Constitute Trade Discounts: CESTAT M/s. Artifacts India vs Commissioner of Central Excise (Appeals) 2025 TAXSCAN (CESTAT) 601 Artifacts India,appellant-assessee, was a proprietorship firm engaged in the manufacturing and...
This article summarises all CESTAT orders published in the Taxscan.in.
No Service Tax Liability on Foreign Commission Payments under RCM as They Constitute Trade Discounts: CESTAT
M/s. Artifacts India vs Commissioner of Central Excise (Appeals) 2025 TAXSCAN (CESTAT) 601
Artifacts India,appellant-assessee, was a proprietorship firm engaged in the manufacturing and export of paper products and handicrafts. It operated as a 100% Export Oriented Unit and received payments in foreign currency for the goods exported during the period from 01.04.2007 to 31.03.2012. Since the business was entirely export-based, the appellant-assessee did not obtain service tax registration.
The two member bench comprising Dr.Rachna Gupta (Judicial Member) and Hemambika R.Priya (Technical Member) heard both sides and examined the records. It noted that the show cause notice alleged commission payments made in foreign currency to overseas principals for order procurement. However, the assessee contended that the commission agents were appointed by foreign buyers to identify suppliers and provided services to those buyers not to the assessee.
Extended Limitation Not Invocable When Service Tax Demand is Based Solely on Income Tax Disclosures: CESTAT
Ajitabh Mishra vs Commissioner of Central Excise & CGST 2025 TAXSCAN (CESTAT) 602
Ajitabh Mishra, the appellant, is a civil contractor who mostly built houses for individuals and friends. He also built a community hall (Samudayik Bhavan) for Rajput Niswarth Seva Sangh. The tax department found, through income tax records, that the appellant had received Rs. 1,32,60,229 during 2013-14 for construction services and had not paid the correct amount of service tax, which they calculated to be Rs. 16,38,964.
The bench, led by Judicial Member Binu Tamta, observed that the appellant had already shared all the financial details in his tax returns and balance sheet, and these records were used by the department itself to make the case. The tribunal observed there was no proof that the appellant had tried to hide anything.
ERP Services to Overseas Client Held Export: CESTAT Quashes Service Tax Demand on Limitation Grounds
M/s. South Nests Software Solutions Pvt. Ltd vs Commissioner ofGST and Central Excise 2025 TAXSCAN (CESTAT) 603
South Nests Software Solutions Pvt. Ltd., the appellant, is a software company based in Chennai. It provided ERP development services to its associated enterprise, Executive Ship Management Pte. Ltd., located in Singapore. The appellant had declared these services as exports in its ST-3 returns and received payment in foreign currency.
The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that the appellant had declared the services as exports in its statutory returns, and there was no evidence of fraud or suppression. It held that the jurisdictional officers had the responsibility to scrutinize the returns, and their failure to do so could not justify invoking the extended limitation period.
The tribunal explained that when facts are already disclosed in official filings, the longer five-year limitation period cannot be applied without clear evidence of intent to evade tax. Since the show cause notice was issued beyond the normal 30-month period from the date of filing the last return, the entire demand was time-barred.
Profit from Subcontracted GTA Service Not Taxable under Business Auxiliary Service: CESTAT
M/S BALAJEE STRUCTURAL INDIA LTD vs COMMISSIONER OF CENTRALEXCISE &SERVICE TAX-RAIPUR (C.G.) 2025 TAXSCAN (CESTAT) 604
Balajee Structural India Ltd., the appellant, was registered as a service provider under the category of Goods Transport Agency (GTA) and had been providing transportation services to its client, Jakodia Minerals.
The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that both the services provided to Jakodia Minerals and those received from the subcontractor were GTA services. It found no basis to treat the profit margin as a separate service.
The tribunal further observed that the appellant did not render any additional service other than arranging transportation through a subcontractor and that there was no contract to support the revenue’s claim of a distinct taxable activity.
Remuneration Paid to Whole-Time Directors Not Taxable under RCM: CESTAT
M/s. Vinayaka Electro Alloys Pvt. Ltd. vs Commissioner of GST 2025 TAXSCAN (CESTAT) 605
Vinayaka Electro Alloys Pvt. Ltd., the appellant, is engaged in the manufacture of alloy and stainless-steel castings. During a departmental audit, it was found that the company had paid remuneration to three of its directors for the period from 7 August 2012 to 31 March 2014.
The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that the directors were appointed as whole-time directors through board resolutions and received salary subject to TDS under Section 192, which supported their status as employees. It referred to CBEC Circulars and previous tribunal rulings that clarified whole-time directors, if functioning as employees, are not liable for service tax under RCM.
The tribunal further observed that the directors were not engaged in providing independent services to the company but were working in an employment capacity. Therefore, there was no taxable service involved. The tribunal set aside the Order-in-Appeal and allowed the appeal, holding that no service tax was payable under RCM on the remuneration paid to whole-time directors.
Nickel Hydroxide with Additives Classifiable as Miscellaneous Chemical Product, Not Inorganic Chemical: CESTAT
M/s.HBL Power Systems Ltd. vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 606
HBL Power Systems Ltd., the appellant, is engaged in the manufacture of nickel-cadmium batteries. To produce these batteries, the company imported Nickel Hydroxide powder with additives from various countries and classified the product under CTH 2825 4000, which covers “Nickel Oxides and Hydroxides.”
The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) observed that the imported product was a mixture designed for specific industrial use and could not be treated as a chemically defined compound under Chapter 28. The tribunal followed its earlier decision in SAFT India Pvt. Ltd., which involved similar goods and concluded that the correct classification was under CTH 3824 9090.
100% EOU Can Carry Forward Accumulated CENVAT Credit Upon De-bonding to DTA Unit: CESTAT
M/s. Stanadyne India (P) Ltd vs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 607
Stanadyne India Pvt. Ltd., the appellant, was earlier operating as a 100% EOU engaged in the manufacture of engine components. On 5 September 2013, the unit was de-bonded after paying the applicable duties and converted into a DTA unit. The appellant carried forward the accumulated CENVAT credit into its ER-1 return for the month of September 2013.
The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) agreed that the matter required further factual clarity. The tribunal observed that there was insufficient information to determine whether the de-bonding referred to in the current case was the same as the one decided by the High Court. The tribunal pointed out that if the appellant indeed had multiple EOUs, the High Court’s earlier judgment would apply squarely, making the denial of credit unsustainable.
Once Rightly Availed, CENVAT Credit Cannot Be Disallowed Later: CESTAT
M/s Shree Krishna Paper Mills & Industries Limited vs TheCommissioner of Central Excise And Service Tax 2025 TAXSCAN (CESTAT) 608
Shree Krishna Paper Mills & Industries Ltd., the appellant, was engaged in the manufacture of coated paper. Relying on a CESTAT ruling in the Pitambar Coated Paper Ltd. case, the appellant informed the department in December 2003 that it would stop paying excise duty on such products, as coating did not amount to manufacture. On insistence from the department, the appellant reversed CENVAT credit amounting to Rs. 57,26,743 and later resumed payment of duty under protest, using both cash and credit.
The two-member bench comprising S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) observed that the department had never challenged the credit availed by the appellant, nor did the show cause notices allege wrongful availment. It held that the Commissioner’s direction to recover duty paid through credit went beyond the scope of the show cause notices. The tribunal also explained that Rule 14 of the CENVAT Credit Rules, which deals with the recovery of wrongly availed credit, was not invoked by the department.
No CBLR Violation If Customs Broker Verifies KYC and Acts Based on Documents from Intermediary: CESTAT
Bablani Clearing Forwarding & Logistics Co. Pvt. Ltd. vs PrincipalCommissioner of Customs (General) 2025 TAXSCAN (CESTAT) 609
Bablani Clearing Forwarding & Logistics Co. Pvt. Ltd., the appellant, was a licensed customs broker accused of facilitating fraudulent exports involving fake Factory Stuffing Permissions (FSPs) and forged documents. The customs department alleged that the broker filed shipping bills on behalf of exporters using forged authorizations and documents, which resulted in wrongful availing of export benefits like duty drawback.
The bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that the broker had fulfilled the KYC requirements as outlined in CBIC Circular No. 9/2010, and had verified all essential documents. The tribunal also observed that there was no evidence showing the broker knowingly facilitated fraud, and that reliance on an intermediary was not prohibited under law.
Mere suppression of facts would not result in invocation of the extended period of limitation: CESTAT
M/s. Wellworth Project Developers…Appellant Private Limited vsCommissioner of CGST 2025 TAXSCAN (CESTAT) 610
In this case, the assessee, M/s. Wellworth Project Developers Pvt. had filed an appeal passed by the Commissioner, which confirmed the demand of service tax with interest and penalty by invoking the extended period of limitation contemplated under section73(1) of the Finance Act, 1994.
The tribunal noted that the service tax demand of Rs. 2,24,43,944 was clearly barred by limitation, and thus, the demand of interest and penalty for the amount of service tax confirmed for the financial year 2013-14 was beyond the period of limitation.
The bench noted that the appellant did not suppress facts and did not have the intention to evade payment of service tax.
‘Service Tax cannot be levied when there is no flow of Consideration’: CESTAT sets aside Rs. 31.5 lakhs demand on Corporate Guarantee
M/s. Wellworth Project Developers Private Limited vsCommissioner of CGST 2025 TAXSCAN (CESTAT) 611
In this case, the assessee, M/s. Wellworth Project Developers Pvt., had filed an appeal against the Commissioner, which confirmed the demand of service tax with interest and penalty by invoking the extended period of limitation contemplated under section 73(1) of the Finance Act, 1994.
The CESTAT, by relying on the above judgement, the confirmation of demand of service tax under corporate guarantees for the FY 2017-18 will not be sustained.
The CESTAT, comprising Justice Dalip Gupta (President) and P.V. Subba Rao (Technical Member), set aside the demand on corporate guarantees for the FY 2017-18.
CESTAT Rejects Revenue’s Appeal, Upholds Classification of ‘Martech DHA’ as Final: No Justification for Re-litigation, Rules Tribunal
Principal Commissioner of Customs vs M/s. Vasta Biotech Pvt.Ltd. 2025 TAXSCAN (CESTAT) 612
The appeal, filed by the Principal Commissioner of Customs, Chennai Air Cargo Commissionerate, challenged an order passed by the Adjudicating Authority, the Principal Commissioner of Customs, Chennai, which had dropped duty demands raised against the importer on the basis of the product's classification. The department alleged that the adjudicating authority failed to determine the classification independently and wrongly relied on a prior CESTAT ruling.
The bench noted that in this particular case, there were no reservations at all and that the revenue accepted the earlier CESTAT ruling without challenging it before the Supreme Court. The court asserted that in that case, the case had attained its finality.
Referring to the doctrine of res judicata, the Bench cited Dr. Subramanian Swamy v. State of Tamil Nadu to assert that litigation must come to an end and parties cannot be subjected to repeated litigation on the same issue. “Even an erroneous decision, if not challenged, becomes final between the parties,” the Bench observed.
Overseas Services by Tech Mahindra’s Subsidiaries are Not Taxable in India: CESTAT denies Refund on CENVAT & Service Tax Paid
Tech Mahindra Ltd. vs Commissioner of Service Tax-I 2025 TAXSCAN (CESTAT) 613
The tribunal was of the view that Information Technology (IT) software service rendered by its subsidiaries overseas was not taxable in India, crucially, did not qualify as “input services” for Tech Mahindra, thereby CENVAT credit and refund were not admissible.
The bench consisting of Dr. Suvendu Kumar Pati, (Judicial Member) and Anil G. Shakkarwar, (Technical Member) observed that the services in dispute were performed entirely outside India between the company’s overseas subsidiaries and foreign clients, consequently they did not attract service tax in India as per section 64 of the Finance Act,1994.
It further appreciated the revenue’s argument that the services in question were performed independently by the subsidiaries without the involvement of the appellant company, hence failing to qualify for input tax under Rule 2(l) of the Cenvat Credit Rules , 2004, further substantiating the denial of refund claims.
CESTAT Holds No Service Tax on Foreign Bank Charges for Export Remittances; Follows Precedents in Appellant’s Cases
M/s. SKM Egg Products Export (India) Ltd vs Commissioner of GST& Central Excise 2025 TAXSCAN (CESTAT) 614
Coming to the facts of the case, the Revenue Department observed that the appellant had not received the full export proceeds, as foreign banks had deducted certain amounts for their services. The department contended that these deductions constituted a taxable service under ‘Banking and Other Financial Services’ and demanded service tax of Rs. 1,38,016, along with interest and penalties, for the period from 1-4-2013 to 30-09-2013. The demand was initially confirmed by the Assistant Commissioner and upheld by the Commissioner (Appeals). The tribunal noted the appellant had no direct dealings with the foreign banks.
The bench, by relying on the tribunal’s order in the assessee’s own case, noted that the foreign banks’ services were rendered to the State Bank of India (SBI), which had engaged them for collecting export proceeds, and thus reached the conclusion that the appellant could not be held liable for service tax on these transactions.
Mere suppression of facts would not result in invocation of the extended period of limitation: CESTAT
M/s. Wellworth Project Developers vs Commissioner of CGST 2025 TAXSCAN (CESTAT) 615
Coming to the facts of the case, the assessee is engaged in providing construction of commercial or industrial building services. The appellant claims that it discharged service tax liability on the advance receipts on account of construction services and on legal services under the reverse charge mechanism. During the period 2013-14 to 2017-18, the appellant also gave corporate guarantees to various banks for credit facilities sanctioned to associated enterprises.
The tribunal noted that the service tax demand of Rs. 2,24,43,944 was clearly barred by limitation, and thus, the demand of interest and penalty for the amount of service tax confirmed for the financial year 2013-14 was beyond the period of limitation.
The bench noted that the appellant did not suppress facts and did not have the intention to evade payment of service tax.
Sale of Printed Materials and Library Charges by Coaching Institutes Not Taxable Under Commercial Training Services: CESTAT
M/s. Roy’s Institute of Competitive Examination Private Limitedvs Principal Commissioner of Service Tax-I 2025 TAXSCAN (CESTAT) 616
Roy’s Institute of Competitive Examination Pvt. Ltd., the appellant, was issued a demand of Rs. 60.97 lakhs in service tax on amounts received from the sale of printed materials and collection of library-related charges. The department classified these under the taxable category of commercial training and coaching services, arguing that they were part of the overall educational service package.
The tribunal ruled that neither the sale of printed materials nor the optional library services provided by the appellant could be taxed under the category of commercial training and coaching services. The demand was set aside, and the appeal on this issue was allowed.
CESTAT held that the sale of printed materials and optional library services by coaching institutes are not taxable under commercial training and coaching services
Leasing of Oxygen Plant Equipment by Praxair India Not a Financial Lease, Not Taxable as Financial Service: CESTAT
Praxair India Private Limited vs The Commissioner of CentralExcise & Service Tax 2025 TAXSCAN (CESTAT) 617
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Bangalore, has held that the activity of leasing oxygen plant equipment by Praxair India Pvt. Ltd. does not amount to a "financial lease" and thus cannot be taxed under the category of "Banking and Other Financial Services."
The Tribunal observed that for a lease to be categorized as a financial lease, it must satisfy conditions such as transfer of ownership, a purchase option for the lessee, lease payments covering full asset cost with interest, and transfer of risks and rewards.
Referring to Indian Accounting Standards and rulings from the Supreme Court, including Asea Brown Boveri Ltd. and NOIDA v. Anand Sonabadra, the Tribunal reiterated that lease classification depends on the substance over form. In Praxair's case, none of the criteria for financial leasing were fulfilled.
Relief for Patna Municipal Corporation: CESTAT Rules Licensing Fee for Mobile Towers Not Taxable as 'Renting of Immovable Property'
M/s. Patna Municipal Corporation vs Commissioner of CentralExcise and Service Tax 2025 TAXSCAN (CESTAT) 618
Patna Municipal Corporation, the appellant, was issued a show cause notice demanding service tax of Rs. 1.5 crore under the category of "renting of immovable property" for various types of revenue collections made between 2007 and 2012. These included rent from shops and stalls, lease payments, license fees from mobile towers, and collections from the Inter-State Bus Terminal (ISBT).
The two-member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) held that lease payments were indeed covered under renting and were taxable, but no penalties could be imposed since there was no suppression of facts.
The tribunal found merit in the appellant's argument that licensing fees collected for mobile towers were not periodic rent but permission fees and thus did not fall within the scope of “renting of immovable property.” The tribunal also ruled that ISBT parking charges did not constitute rent and should not attract service tax.
Wastewater Treatment by CETP Not 'Processing of Goods', Not Taxable Under Business Auxiliary Services: CESTAT
M/s. Perundurai Leather Industries Eco Security Pvt. Ltd vsCommissioner of GST and Central Excise 2025 TAXSCAN (CESTAT) 619
Perundurai Leather Industries Eco Security Pvt. Ltd., the appellant, is a private company formed by the tanneries located at SIPCOT, Perundurai. It was established to operate a CETP with financial assistance from both the Central and State Governments. The appellant’s role was to treat industrial effluents discharged by member units and return the treated water back to them for further use, collecting charges for the service.
The two-member bench comprising Ajayan T.V. (Judicial Member) and VasaSeshagiri Rao (Technical Member) observed that the appellant was operating a CETP as a common facility created in accordance with government policy and funded by government grants. The tribunal held that such a setup qualified as a “project” under Section 145 of the Finance Act, 2012, and the retrospective exemption applied from June 2005. The tribunal also noted that the exemption continued prospectively through Notification No. 8/2017-ST.
CESTAT Rejects Dual Taxation on Transportation: Service Already Taxed Under GTA Cannot Be Taxed Again as BAS
M/S BALAJEE LOHA LTD vs COMMISSIONER OF CENTRAL EXCISE ANDSERVICE TAX-RAIPUR 2025 TAXSCAN (CESTAT) 620
In this case, the assessee, M/s. Balajee Loha Pvt. Ltd., had appealed against the order passed by the Commissioner (Appeals), which upheld the order passed by the Assistant Commissioner. In the order in the original, the Assistant Commissioner had confirmed a demand of service tax of Rs. 2,21,045 and Rs. 1,75,155 on the appellant under the proviso to section 73(1) of the Finance Act, 1994, along with interest and penalties.
The bench observed that the same activity of transportation cannot be treated as GTA service to charge service tax under reverse charge and also as BAS to charge service tax on forward charge basis.
The tribunal noted that as the appellant had paid service tax under reverse charge under GTA, no service tax on transportation can be charged, treating it as BAS (up to 1.7.2012) and as service (after 1.7.2012).
No Service Tax on Hostel Fees Received for Non-Residential Courses in Coaching Institute: CESTAT
M/s. Roy’s Institute of Competitive Examination Private Limitedvs Principal Commissioner of Service Tax-I 2025 TAXSCAN (CESTAT) 621
The assessee/appellant, Roy's Institute of Competitive Examination Private Limited, offered both residential and non-residential training options. Students who chose to enroll in "Residential Courses" were required to remain in the hostel accommodations that the assessee provided, and hostel fees were included in the course tuition.
The two-member bench consisting of Ashok Jindal, a judicial member, and K. Anpazhakan, a technical member, has noted that "the stand-alone hostel charges collected for non-residential courses, have no connection with Commercial Training and Coaching services as defined under section 65(105)(zzc) of the Finance Act, in that even if any student, who do not avail themselves of this service, would continue to avail themselves of the course offered by the assessee and there is no question of service taxpayment."
Service Tax Demand not Part of Approved Resolution Plan fails w/o a Continuance Application: CESTAT
M/s. Veesons Energy Systems Pvt. Ltd. vs Commissioner of GST andCentral Excise 2025 TAXSCAN (CESTAT) 622
The tribunal held that once a resolution plan is duly approved under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), no further proceedings can be initiated in respect to any claim not included in the approved plan.
The tribunal consisting of Vasa Seshagiri Rao (Technical Member) and Ajayan T.V., (Judicial Member) cited the case of Ghanshyam Mishra (2021) and held that once a resolution plan is duly approved by the Adjudicating Authority under Section 31(1) of IBC, the claims as provided in the resolution plan shall stand frozen and will be binding on all the stakeholders.
The Tribunal further rendered the proceedings impermissible as the tax department’s demand was not part of the approved plan.
Royalty for Exclusive 99-Year Trademark Use Qualifies as Deemed Sale, Not Taxable as Service: CESTAT
M/s. Bajaj Resources Limited vs Commissioner of Central Exciseand CGST 2025 TAXSCAN (CESTAT) 623
Bajaj Resources Private Limited, the appellant, had entered into an agreement with its wholly owned subsidiary, Bajaj Corp Limited, granting it exclusive, worldwide rights to use its registered trademarks for a period of 99 years. In return, the appellant received royalties based on a percentage of the subsidiary’s annual net sales turnover.
The two-member bench comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) examined the agreement closely and found that the transfer gave Bajaj Corp full and exclusive use of the trademarks for 99 years, with Bajaj Resources retaining no operational control.
The tribunal held that this arrangement constituted a deemed sale under Article 366(29A)(d) and did not fall within the definition of service under Section 65B(44). Therefore, the service tax demand was set aside.
Construction Involving Common Areas Still a Composite Works Contract, Not Residential Complex Service: CESTAT
M/s. Orchid Homes vs Commissioner of GST & Central Excise 2025 TAXSCAN (CESTAT) 624
Orchid Homes, the appellant, is a construction firm engaged in building residential complexes. The dispute related to two of their projects, Orchid Chengachery and Orchid Balaganapathy Enclave, both comprising more than twelve residential units. The department conducted an audit and found that the appellant had not paid service tax for the period between June 16, 2005, and September 30, 2008. A show cause notice was issued demanding service tax of Rs. 18,22,530 along with interest and penalties.
The two-member bench comprising P. Dinesha (Judicial Member) and M. Anjani Kumar (Technical Member) observed that the contracts were indeed composite and could not be separated into distinct service and goods components. It further observed that merely having common areas did not alter the composite nature of the contract.
The tribunal held that a service that aligns in description with "Residential Complex Service" does not automatically fall under that category if the consideration is indivisible and the contract is composite.
Rent Paid to Directors in Personal Capacity Not Taxable Under Reverse Charge Mechanism: CESTAT
M/s.PSV Polymers Pvt Ltd. vs Commissioner of Central GST andCentral Excise 2025 TAXSCAN (CESTAT) 625
PSV Polymers Pvt. Ltd., the appellant, is a manufacturer and exporter of guar gum powder and avails CENVAT credit on inputs and input services. During an audit, the department noticed that the appellant had paid Rs. 75.43 lakh to foreign agents between April 2010 and September 2014 for procuring export orders and had also paid Rs. 5.32 lakh as rent to one of its Directors for leasing a godown from July 2010 to August 2015.
The two-member bench comprising Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) referred to earlier rulings in Cords Cable Industries Ltd. and Varaha Infra Ltd., where it was held that rent paid to Directors in their personal capacity as owners of the premises does not attract service tax under RCM. Applying the same logic, the tribunal held that no service tax was payable on the rent in this case.
The tribunal did not examine the issue of limitation but noted that in revenue-neutral situations, the extended period of limitation is generally not applicable. The impugned order was set aside, and the appeal was allowed.
Club Services to Members Not Taxable as One Cannot Render Services to Oneself: CESTAT Applies Mutuality Principle
M/s. Umed Club vs Commissioner (Appeals), Central Excise &Central Goods & Service Tax 2025 TAXSCAN (CESTAT) 626
Umed Cub, the appellant, is a registered society engaged in offering restaurant, accommodation, and other services to its members in Jodhpur. The appellant had mistakenly paid service tax on these services under the category of “club or association service” and subsequently filed a refund claim of ₹21,04,836, contending that such tax was not payable based on the principle of mutuality.
The two-member bench comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) observed that the decision of the Supreme Court in Calcutta Club clearly laid down that mutuality applies even under the post-2012 service tax regime. It held that a club cannot render services to itself and thus such services are not taxable.
The tribunal also observed that the decisions of the Authority for Advance Rulings relied upon by the Commissioner (Appeals) stood overridden by the Supreme Court judgment. It found that the Assistant Commissioner had raised the issue of unjust enrichment without giving any reasoning, and held that the principle did not apply when services are provided to oneself.
Entire Liability Computed from Taxpayer's Records and Returns Filed Before SCN: CESTAT Rules Service Tax Penalty Unjustified
M/s. Nine Stars Information Technologies Ltd. vs Commissioner ofGST and Central Excise 2025 TAXSCAN (CESTAT) 627
Nine Stars Information Technologies Ltd., the appellant, is a company based in Chennai engaged in providing software development and digitization services to domestic and international clients. During the period from April 2008 to March 2011, the appellant collected service tax from customers but failed to deposit the full amount with the government. They also did not file their ST-3 returns for the relevant period on time.
The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that the tax liability was calculated based on the appellant’s own records and that most of the tax, along with interest, had been paid before the notice was issued.
It further observed that there was no evidence of fraud or intent to evade tax. The tribunal held that the requirements for invoking the extended period and imposing a penalty under Section 78 were not satisfied.
Wax, Gums, and Fatty Acids from Vegetable Oil Refining Treated as “Waste”: CESTAT Allows Exemption
M/s Raj Agro Mills Ltd vs Commissioner of Central Excise andService Tax 2025 TAXSCAN (CESTAT) 628
Raj Agro Mills Ltd, appellant-assessee,, was engaged in manufacturing refined oil, vanaspati ghee, and fatty acid. During the process, by-products like waxes, gums, and soap stocks were generated and cleared at Nil duty, claiming them as ‘waste’ under Notification No. 89/95-CE dated 18.05.1995.
The two member bench comprising S.S.Garg (Judicial Member) and P.Anjani Kumar (Technical Member) found that the issue was already settled by the Larger Bench in the Ricela Health Foods Ltd. case, which held that gum, wax, and fatty acids generated during the refining of vegetable oils were waste and qualified for exemption under Notification No. 89/1995-CE.
It also noted that the Chandigarh Bench, in the Dhillon Oil and Fats Pvt. Ltd. case, had followed the same view and allowed the exemption.
Refund of Rs.25 Lakh Deposited During Investigation: CESTAT Remands Matter to Commissioner (Appeals) for Decision on Unjust Enrichment
M/s. GSEC Limited vs Commissioner of Customs Mangalore 2025 TAXSCAN (CESTAT) 629
GSEC Limited,appellant-assessee,had challenged Order-in-Appeal No. 04/2022 dated 18.01.2022 passed by the Commissioner of Customs (Appeals), Bangalore. The matter pertained to the refund of Rs.25,00,000 deposited during the investigation.
A single member bench of D.M.Misra (Judicial Member) found that the Commissioner (Appeals) had not decided the refund claim on its merits, especially about unjust enrichment.
Since the issue was not addressed, the tribunal sent the case back to the Commissioner (Appeals) to decide if the refund amount had been passed on to the consumer or not, following the rules of unjust enrichment.
CESTAT Upholds Penalty for Misdeclaration and Undervaluation in Import of Glass Chatons, against Importer and Alleged Mastermind
Shri S. Iqbal vs The Commissioner of Customs (Air) 2025 TAXSCAN (CESTAT) 630
The dispute originated from a consignment imported through the Air Cargo Complex in Chennai, declared as “China Glass Imitation Stone” and weighing 1,239 kg, with a total value of USD 14,868. However, acting on specific intelligence, the Directorate of Revenue Intelligence (DRI) examined the cargo and found it consisted of branded "888" glass chatons, items known to have a significantly higher market value. The Bill of Entry in question was filed under the name of M/s Royal Traders, a proprietorship firm run by G. James. But during the investigation, James admitted that the firm and the IEC code were created at the behest of S. Iqbal, who also financed the business and orchestrated the import transaction.
The Bench, comprising Judicial Member P. Dinesha and Technical Member M. Ajit Kumar, took note of the admissions made by both parties during the investigation. The Tribunal asserted that Iqbal, in his own recorded statement, had neither retracted his admission nor denied involvement in the undervaluation scheme. It was held that had there been any contradiction between his statement and those of others, cross-examination could have been meaningful and dismissed the argument of denial of natural justice.
Furthermore, the Tribunal noted that the Revenue had relied not only on the NIDB database but also on several import data sources to determine undervaluation, thereby satisfying the evidentiary requirements under the Customs Valuation Rules. About Iqbal’s alleged masterminding of the operation, the Tribunal observed that:
“His statement explaining the modus operandi is glaringly against him. There has been no denial either during investigation or adjudication proceedings. This lends credibility to the Revenue’s case and justifies the penalty imposed.”
CESTAT Rejects Appeal by Assessee over Refund of Additional Duty: Cites Missing Mandatory Documents and Lack of Diligence
M/s. Amicus Communications vs Commissioner of Custom 2025 TAXSCAN (CESTAT) 631
The dispute arose from a refund claim filed by the appellant under Notification No. 102/2007-Cus, regarding the additional customs duty paid on imports of Panasonic products. The refund was rejected by the original adjudicating authority on the grounds of non-submission of essential documents, including VAT/Sales Tax returns, Chartered Accountant certificates, sales invoices with CENVAT declarations, and other compliance proofs.
The Tribunal emphasised that, as per Circular 16/2008-Cus, dated 13.10.2008, the submission of specific documents, such as VAT challans, sales invoices, and Chartered Accountant certifications, was not a mere procedural formality but a mandatory requirement to establish entitlement under the exemption notification. The tribunal further observed that while an indemnity bond may be acceptable in cases involving minor procedural gaps, it cannot substitute for the core documentary compliance required for refund eligibility. It added that permitting such a substitution would risk misuse and lead to leakage in government revenue.
No Interest on Timely Refund of Pre-Deposit, Rules CESTAT: Assessee’s Appeal Rejected
M/s Crystal Crop Protection Ltd vs Commissioner of Central Goods& Service Tax 2025 TAXSCAN (CESTAT) 632
The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has dismissed the appeal filed by Crystal Crop Protection Ltd., seeking interest on a pre-deposit refunded by the Department. The Tribunal held that, since the refund was processed within three months of the application date, no interest was payable under the law.
The Bench, comprising Hon’ble Mr. S.S. Garg (Judicial Member) and Hon’ble Mr. P. Anjani Kumar (Technical Member), examined the facts and the evolving jurisprudence. The Tribunal acknowledged the confusion surrounding interest on refunds, especially concerning deposits made during investigations or litigation. However, it noted that the law had now been clarified by the Delhi High Court in Goldy Engineering Works, a ruling subsequently affirmed by the Supreme Court.
Contradictions Surface in Document Submission Claims Regarding Export Exemptions: CESTAT remands Case
Deekay Trexim India Private Limited vs Commissioner of CentralGoods 2025 TAXSCAN (CESTAT) 633
Deekay Trexim, a manufacturer and exporter of man-made fabrics, had availed exemption under Notification No. 18/2009-ST for services related to exports specifically, Goods Transport Agency (GTA) services for transporting goods from the factory to the port, and services received from foreign commission agents.
The Tribunal noted that Notification No. 18/2009-ST allows submission of consignment notes or similar documents issued in the name of the exporter, and that procedural lapses, like failure to submit originals when certified copies were available, should not defeat substantive benefits if core conditions were met. It also stated that exemptions intended to promote exports should not be denied due to minor technical non-compliances, especially when the actual export of goods was undisputed.
The bench of Dr. Rachna Gupta and Hemambika R Priya concluded that a fresh evaluation of records was necessary. The Tribunal directed the original authority to re-examine all submissions and provide the appellant an adequate opportunity to present the documents and be heard afresh before issuing any revised order.
Fabric Rolls Missing from Taxpayer’s Custody After Legal Seizure: CESTAT Upholds Redemption Fine
COMMISSIONER OF CUSTOMS (PREVENTIVE) vs M/S AKAY CONES PVT. LTD. 2025 TAXSCAN (CESTAT) 634
The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that goods seized by customs authorities but later found missing from the taxpayer’s custody remain liable for confiscation, and a redemption fine can still be imposed.
The tribunal held that legal confiscation under Section 111 of the Customs Act, 1962, remains valid even if the goods are not physically present. It further held that under Section 125 of the Customs Act, a redemption fine can be imposed in lieu of confiscation, regardless of whether the goods are still available at the time of adjudication.
The tribunal allowed the Revenue’s appeal and held that the missing goods were liable for confiscation and that a redemption fine should be imposed. The case was remanded to the adjudicating authority to determine the appropriate quantum of redemption fine and penalties on the missing goods.
CESTAT: License Fee in Brewery Contract Not Taxable as Part of Immovable Property Rent
Tripti Alcobrew Private Limited vs Commissioner of CentralExcise Customs 2025 TAXSCAN (CESTAT) 635
Tripti Alcobrew Pvt. Ltd., the appellant, entered into two separate agreements with SKOL Breweries Ltd., one was a Lease Deed for land, building, and machinery, and the other was a License Agreement for the transfer of rights to use its brewery license and production capacity.
The two-member bench comprising Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) examined the agreements and found that the license to use the brewery was transferred exclusively, leaving no control or right with the appellant during the agreement period.
The tribunal observed that this fulfilled the legal requirement of a transfer of right to use goods and therefore amounted to a deemed sale under constitutional provisions. The tribunal held that the license agreement could not be combined with the lease deed for service tax purposes and that the consideration received under it was not liable to service tax.
€1 Million Cancelled Invoice for Post-Contract Services Not Dutiable as Additional Consideration for Imports: CESTAT
M/s Edag Technologies India Pvt. Ltd vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 636
Edag Technologies India Pvt. Ltd., the appellant, had entered into a turnkey project contract with Ford India Ltd. for the establishment of a manufacturing facility. Under the contract, Edag India was responsible for both imported and indigenous components, with about 49% of the project involving imports. These goods were sourced from its parent company, Edag Germany, and were duly declared with appropriate customs duties paid at the time of import.
The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that there was no evidence that the €1 million was ever paid or linked to the value of the imported goods. It further held that services, even if rendered, were post-contract in nature and could not be considered as part of the import transaction.
The tribunal also observed that the department failed to follow the proper procedure under Section 138B to admit the statements recorded during the investigation, making them inadmissible. It also held that penalties on foreign entities were without jurisdiction as the law at the time did not allow for such extra-territorial application.
Notional Interest on Security Deposits for Locker Rentals Not Taxable as Service Value: CESTAT
M/s. Ratna Sagar Safe Deposit Vaults Pvt. Ltd. vs Commissionerof CGST & Central Excise 2025 TAXSCAN (CESTAT) 637
Ratna Sagar Safe Deposit Vaults Pvt. Ltd., the appellant, provides locker services and collects two separate amounts from its customers: a fixed rental charge and a refundable, interest-free security deposit.
The two-member bench comprising Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) referred to its earlier order and the decision in Murli Realtors. The tribunal observed that there was no evidence that the security deposit had any impact on the rent charged or was part of the service consideration. It explained that Section 67 allows taxation only on amounts actually received for services.
Since the security deposit was refundable and no real income or interest was earned from it, notional interest could not be added to the value of the taxable service. The tribunal set aside the impugned order and allowed the appeal. It ruled that service tax cannot be levied on notional interest attributed to interest-free security deposits collected for locker rentals.
Service Tax under RCM not Leviable on Bank Charges Paid to Foreign Banks: CESTAT
M/s. Artifacts India vs Commissioner of Central Excise (Appeals) 2025 TAXSCAN (CESTAT) 638
The assessee/appellant, Artifacts India, is a sole proprietorship organization that produces a range of paper goods and handicrafts. The assessee received payment from buyers in foreign currency for exporting goods that he had created. The assessee had not applied for service tax registration since they were solely involved in exporting commodities.
The two-member bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has decided that "there is direct nexus of the buyer with the Foreign Bank, and it is held that when the service provider, 'the Foreign Bank,' and the recipient, 'the Buyer,' are both located outside India, there is no question of taxing such service in India as the said service has been provided outside the taxable territory and outside the purview of Section 66B, the charging section for levy of service tax."
Intention Must be Proven for Imposing Penalty u/s 114AA of Customs Act for Obtaining Undue Export Advantage: CESTAT
Evergreen Shippng Agency India Pvt Ltd. vs Commissioner ofCustoms (Export) 2025 TAXSCAN (CESTAT) 639
The assessee/appellant, Evergreen Shipping Agency India Pvt Ltd, manufactures and exports ready-made clothing. It signed agreements with Lagoon Trading LLC, Lagcy Trading LLC, and Royal Readymade Garments, all based in the United Arab Emirates, to supply ready-made garments. Only five of the 211 shipping bills' worth of items were transported by the assessee. According to the assessee, no changes were made to TR-1/TR-2.
The bench observed that the assessee was penalized for failing to comply with the details specified in the Export General Manifest, specifically that the commodities were delivered to Jebel Ali rather than Panama.
The Tribunal noted that the assessee also submitted the container tracking report and email correspondence to demonstrate that the assessee had negotiated and generated invoices for the cost of transporting the shipment to Jebel Ali after it had landed in Panama.
Co-Noticees Cannot Be Penalized Independently Once Main Noticee Settles Dispute Under SVLDRS Scheme: CESTAT
Shri Rajnesh Kumar Jain vs Commissioner of CGST & CentralExcise 2025 TAXSCAN (CESTAT) 640
Shri Rajnesh Kumar Jain, the appellant, was a director of Ved Jyoti Alloys Pvt. Ltd. A show cause notice was issued on November 7, 2017, proposing a penalty under Rule 15 of the CENVAT Credit Rules, 2004. The adjudicating authority dropped the penalty against the appellant, who was only a co-noticee.
The single-member bench comprising S.S. Garg (Judicial Member) considered the submissions and reviewed the case records. The tribunal found that the main noticee had settled the matter in full and final terms under SVLDRS and was issued a discharge certificate. It referred to its earlier rulings, particularly in Auto Ignition Ltd., where it was clearly held that once the main noticee has resolved the dispute under the SVLDRS Scheme, penalties on co-noticees cannot be sustained.
The tribunal held that the penalty imposed on the co-noticee was not legally tenable and set aside the impugned order. The appeal was allowed with consequential relief, if any, as per law.
Excise Dept Fails to Probe 90 of 160 Transactions, Vendor Not Made Co-Noticee: CESTAT Upholds Cenvat Credit Claim
M/s. OM Shakti Smelters Pvt. Ltd. vs Commissioner of CentralExcise
2025 TAXSCAN (CESTAT) 641
The department issued a show cause notice alleging that goods were not physically received and that the appellant had taken credit without the actual receipt of inputs. The adjudicating authority confirmed the demand with interest and imposed penalties. Aggrieved by the order, the appellant filed an appeal before the CESTAT.
The tribunal held that the appellant had produced valid documentation, paid through proper channels, and complied with all procedural requirements. It also observed that no alternative source of raw material had been established by the department, nor was any evidence of suppression presented to justify invoking the extended period for demand.
The tribunal allowed the appeal both on merits and on the ground of limitation. It also set aside the penalty imposed on the company’s director, ruling that it could not stand once the main demand was dismissed.
No Service Tax on Commission Deducted by Foreign Buyers in Export Transactions Lacking Agent Relationship: CESTAT
Akshita Exports vs Commissioner of C.E. & S.T.-Surat-i 2025 TAXSCAN (CESTAT) 642
Akshita Exports, the appellant, is engaged in the export of goods. The department alleged that the appellant paid commission to foreign buyers from 2008-09 to 2011-12, and that this amounted to a taxable service under the category of "Business Auxiliary Service" under Section 65(105)(zzb) of the Finance Act, 1994.
The two-member bench comprising Somesh Arora (Judicial Member) and Satendra Vikram Singh (Technical Member) observed that the commission was not paid to any agent by the appellant but was deducted by the foreign buyer, and there was no agreement or evidence of a service relationship between the appellant and any commission agent. It further observed that in the absence of a third-party service provider, no taxable service could be said to exist.
The tribunal also observed that the issue had been settled in a series of earlier decisions where it was held that deductions shown as commission in export invoices, when no service is rendered by an agent, are in fact trade discounts and not subject to service tax. The tribunal set aside the demand and allowed the appeal, granting consequential relief to the appellant.
Incorrect Fabric Label on Reimported Goods: CESTAT Finds No Misdeclaration as Composition Remains Same and Customs Duty Drawback Is Returned
M/s.PGC Corporation Limited vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 643
PGC Corporation Limited,appellant-assessee, had imported goods into India, some of which were later exported with labels as required by the foreign buyer. After a few items were rejected, they were reimported with the same labels. While the fabric composition remained the same, the labels mentioned a different composition as per the buyer's requirement.
The appellate tribunal observed that the assessee had voluntarily requested provisional release of the reimported goods and surrendered the duty drawback through a letter dated 19.05.2010. The reimport took place in July 2009, and the show cause notice was issued three years later, which indicated good faith.
Since the drawback was already returned with interest, the CESTAT found no case of willful misdeclaration. It held that the demand could not be sustained as it would amount to collecting duty twice. The penalty was also not justified, and the impugned order was set aside.
Penalty on CHA for Not Verifying Export Credentials: CESTAT Sets Aside Penalty, Says CHALR Rules Apply
Shri E. Joseph John vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 644
E. Joseph John,appellant-assessee,worked for a Custom House Agent and filed shipping bills for M/s. S.K. Enterprises, Tirupur. Based on specific intelligence, DRI officers intercepted a truck at Tuticorin Sea Port carrying a container declared to contain 1000 bags of dehusked coconut, as per Shipping Bill dated 2.4.2013.
A single member bench M.Ajit Kumar ( Technical Member) reviewed the case records and submissions from both sides. It found that the charges against the appellant related to his failure, as a CHA employee, to verify the exporter’s credentials and get proper authorization before filing the shipping bill that led to the attempted export of red sanders.
The appellate tribunal noted that although the assessee received unusually high fees, there was no evidence of collusion or illegal gain. It held that suspicion or negligence alone was not enough to impose penalties under Section 114 of the Customs Act, as there was no act that made the goods liable for confiscation.
Registration of Premises Not Mandatory to Claim Refund of Unutilized CENVAT Credit on Input Services: CESTAT
M/s. Cargotec India Pvt. Ltd. bs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 645
Cargotec India Pvt. Ltd, appellant-assessee, was a 100% Export Oriented Unit under the Software Technology Park Scheme providing IT software services. It filed refund claims for unutilized CENVAT credit on exports from April to June 2011 and July to September 2011.
The appellate tribunal referred to court rulings that said registration of premises was not mandatory to claim a refund of unutilized CENVAT credit on input services. These rulings allowed refunds even if the premises were unregistered.
The CESTAT found the original order unclear and wrong to reject the claim just because the service tax credit came from unregistered premises. It noted the assessee was registered properly and had maintained records. Since the assessee cooperated by providing data, the tribunal set aside the rejection.
No Service Tax Payable on Foreign Bank Charges as No Direct Service Rendered to Exporter: CESTAT
M/s. Cotton Blossom India (P) Ltd vs Commissioner of GST 2025 TAXSCAN (CESTAT) 646
Cotton Blossom India (P) Ltd.,appellant-assessee,manufactured and exported knitted garments. One of its customers, C & A Buying GMBH & Co., Germany, placed orders through the appellant’s agent, Mondial Services. The customer outsourced export document verification and payment processing to Amsco Finance Limited (AFL), Hong Kong, which informed the assessee by email. AFL used Deutsche Bank, Singapore, to send export payments to the appellant.
The bench noted that foreign banks deducted charges when transferring export sale proceeds to Indian banks, but these foreign banks were chosen by the overseas buyers, not the exporters. Exporters usually did not have any agreement with these foreign banks and often did not know their identities or the amount charged. The foreign banks’ service was actually to the Indian banks, not directly to the exporters.
Previous tribunal decisions confirmed that such charges were bank-to-bank transactions and did not attract service tax from exporters. The CESTAT also highlighted that from July 1, 2012, exporters receiving banking and financial services through intermediaries were liable for service tax only if those services were received by them, not if the intermediary acted on behalf of the overseas buyer.
Self-Certification by Exporter or CA Enough to Prove Nexus for Refund on Export Services: CESTAT
M/s. Cargotec India Pvt. Ltd vs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 647
Cargotec India Pvt. Ltd, appellant-assessee, was a 100% Export Oriented Unit under the Software Technology Park Scheme providing IT software services. It filed refund claims for unutilized CENVAT credit on exports from April to June 2011 and July to September 2011.
A single member bench of M.Ajit Kumar ( Technical Member) examined the assessee’s claim regarding the nexus between input and output services in respect of a refund of ₹1,19,828. It noted that the appellant relied on Circular No. 120/01/2010-ST, which introduced a self-certification mechanism, allowing exporters or their Chartered Accountants to certify the correlation between input services and exports.
The appellate tribunal also referred to the CESTAT ruling in Infosys Ltd. v. Commissioner of Service Tax, Bangalore, which supported acceptance of such certification.
Relief for Hindustan Unilever: CESTAT Rules Skin Care Petroleum Jelly Variants as “Cosmetics”, Sets Aside Excise Duty Demand
M/s. Hindustan Unilever Ltd. vs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 648
Hindustan Unilever Ltd,appellant-assessee,was engaged in manufacturing skin care preparations under Chapter 33 and pure petroleum jelly under Chapter 27 of the Central Excise Tariff Act. The petroleum jelly, sold under the brand name "Vaseline," was classified under Tariff Item 2712 10 90, and duty was paid accordingly.
The two member bench comprising P.Dinesha (Judicial Member) and M.Ajit Kumar (Technical Member) heard both sides and examined the records and judicial pronouncements cited during the arguments. It noted that the classification issue regarding Petroleum Jelly Aloe Vera and Petroleum Jelly Baby had already been decided in the assessee’s own case for an earlier period, vide Final Order No. 40856/2024 dated 15.07.2024.
The appellate tribunal observed that Heading 3304 covers cosmetic or toilet preparations, while Heading 2712 under the HSN includes petroleum jelly but specifically excludes variants meant for skin care. It held that if the product’s primary function is “care” rather than “cure,” it should be treated as a cosmetic and not as a medicament.
Refund Claim Filed Under Regular Notification Instead of SEZ One Treated as Procedural Lapse: CESTAT Allows ₹2.92 Cr Refund
M/s Guardian India Operations Pvt Ltd vs Commissioner of CentralGoods & Service Tax 2025 TAXSCAN (CESTAT) 649
Guardian India Operations Pvt Ltd, appellant-assessee, was a 100% EOU providing IT Software Services and Business Auxiliary Services to clients outside India. While offering these services from its Gurugram office, it received various input services like property rent, manpower supply, telecom, repair, and facility management, on which it paid service tax.
The two member bench comprising S.S Garg (Judicial Member) and P.Anjani Kumar( Technical Member) observed that the refund claim of ₹2.92 crore was rejected only because it was filed under the regular notification instead of the SEZ-specific one. It held that this was a procedural lapse and that the benefit could not be denied on technical grounds.
The appellate tribunal referred to a past ruling in the Lupin Ltd. case, which clarified that SEZ-related benefits should be interpreted in a liberal manner, as they are meant to support tax-free operations. Since the assessee met all eligibility conditions, the CESTAT found no reason to deny the refund and set aside the order.
Fulfilment of Conditions of Customs Notification Not Applicable When goods imported were destroyed in fire: CESTAT Allows Customs Duty Redemption to Piramal Enterprises
M/s.Piramal Enterprises Limited vs The Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 650
M/s.Piramal Enterprises Limited, the appellant is a 100 % EOU engaged in the manufacture of organic compounds. They were availing the benefits of Notification No.52/2003-Cus. dated 31.03.2003 and Notification No.22/2003-C.Ex dated 31.03.2003 for procurement of raw materials and capital goods.
The Ammonium Persulphate imported by the Appellant vide two Bills of Entry dated 18.01.2010 and 21.06.2010 was destroyed in a fire accident that occurred in the Appellant’s Export Oriented Unit (EOU) on 09.07.2010.
A two member bench of P. Dinesha,Member (Judicial) and M. Ajit Kumar, Member (Technical) has observed that the Notification No.96/2007 CUS dated 29.08.2007, which imposes the levy of anti-dumping duty on the goods does not make any mention that it is specifically made applicable to EOU/SEZ. The second condition is that the goods imported are either cleared as such into DTA or used in the manufacture of any goods that are cleared into the DTA. The goods having been destroyed in fire, there is no occasion of the goods cleared as such into DTA or used in the manufacture of finished products for clearance into DTA.
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