Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 12)

This article summarises all CESTAT orders published in the Taxscan.in.

CESTAT Rules Service Tax Payable on Printing Charge: Exemption Under S.No. 30 of Notification 25/2012-ST Not Applicable

M/S CHHATTISGARH SAMVAD vs PRINCIPAL COMMISSIONER 2025 TAXSCAN (CESTAT) 651

In this case, the assessee M/s. Chhattisgarh Samvad had appealed against the order passed by the Principal Commissioner, in which he confirmed the demand of service tax of Rs. 11,93,60,235/- on the appellant, along with interest under Section 75 of the Finance Act, 1994, and imposed an equal amount as penalty under Section 78 of the Act.

The bench noted that under this notification, the intermediate production process as job work concerning printing was exempted. The tribunal further observed that the appellant was not a job worker but had contracts to get materials printed using its content, outsourcing only the printing. The printer was its subcontractor, so the exemption does not apply.

The CESTAT held that the appellant was liable to pay service tax on the service charges which it had collected from the client departments towards printing work, but only within the normal period of limitation.

No Penalty or Redemption Fine if Confiscation of Goods is Set Aside by Customs Tribunal: CESTAT

Commissioner of Customs vs M/s. SAFT India Pvt. Ltd. 2025 TAXSCAN (CESTAT) 652

The Commissioner of Customs had filed an appeal against M/s SAFT India Private Limited, a company engaged in manufacturing and importing industrial batteries and related components, challenging the earlier decision of the adjudicating authority which ruled that no redemption fine and penalty may be imposed on the respondent.

After hearing both parties, the Tribunal observed that the bench had given a categorical finding by rejecting the confiscation of the goods in question and imposition of penalty and hence, the original authority was very much correct in not imposing any redemption fine, and further held that the revenue’s appeal lacked any merit.

The bench comprising M. Ajit Kumar (Member Technical) and P. Dinesha (Member Judicial) concluded by allowing the miscellaneous petition to be heard and dismissed the Revenue’s main appeal.

CENVAT Credit Allowed on Dealer-Issued Invoices: CESTAT Clarifies Importer Registration Not Mandatory

M/s. Dow Chemical International Pvt. Ltd. vs Commissioner of GSTand Central Excise 2025 TAXSCAN (CESTAT) 653

Dow Chemical International Pvt. Ltd., a manufacturer of Styrene and Acrylic Polymers, filed an appeal against a tax demand of Rs. 6.87 crores issued by the Commissioner of GST and Central Excise, Chennai.

The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that Rule 9 did not require a person already registered as a dealer to obtain a second registration as an importer. The tribunal stated that the notification and circular issued in 2016 were meant to remove confusion and should apply retrospectively.

It further observed that the invoices in question were valid under Rule 11, and the credit could not be denied when the goods were duty-paid, received, and used in the manufacturing process. The tribunal allowed the appeal, set aside the demand in full, and granted consequential relief. It emphasized that unnecessary litigation could be avoided if authorities respected legal precedents and departmental clarifications.

Reliance Jio's Pre-Deposit via Credit Ledger u/s 35F Prior to 28.10.2022 is Valid: CESTAT

Reliance Jio Messaging Services Ltd. vs Commissioner of C.Ex.& Service Tax 2025 TAXSCAN (CESTAT) 654

The case arose when Reliance Jio filed an appeal against an order dated 25.03.2021, which disallowed CENVAT credit of ₹6.28 lakh with an equal penalty. To comply with Section 35F, the company debited ₹47,102 via DRC-03 from its electronic credit ledger on 04.06.2021. However, the Commissioner (Appeals) rejected the appeal on the ground that the DRC-03 route is not valid for pre-deposit, thereby rendering the appeal non-maintainable.

The Tribunal, presided over by Anil G. Shakkarwar (Technical Member), held that since Reliance Jio’s DRC-03 debit was made on 04.06.2021 well before the cutoff date of 28.10.2022 it satisfies the requirements of Section 35F.

Service Tax Demand Can Be Based on Broadcaster Data If Cable Operator Suppresses Facts: CESTAT

S.C.V. Cable Net vs Commissioner of Central Tax 2025 TAXSCAN (CESTAT) 655

S.C.V. Cable Net, a Multi System Operator (MSO) based in Tirupati, had entered into agreements with various TV broadcasters for the supply of encrypted signals, which were decoded and distributed to cable operators. The department initiated an investigation and issued a show cause notice in October 2009 after the assessee failed to respond to multiple summons or submit proper records. The department calculated the number of subscribers based on data obtained from broadcasters and raised a tax demand accordingly.

The single-member bench comprising Anil G. Shakkarwar (Technical Member) observed that the appellant did not produce any reliable documentation to support its claims, despite ample opportunity. It also held that reliance on subscription agreements and data from broadcasters was a reasonable basis for estimating the number of cable connections and corresponding tax liability.

The tribunal rejected the cum-tax argument, stating that the declared income figures were inconsistent with the department’s findings. It also denied the claim for CENVAT credit as no proper invoices or supporting evidence had been furnished.

CESTAT prohibit re-determining value of CDs imported by HP India without rejecting transaction value Customs Valuation Rules

M/s Hewlett Packard Sales Pvt. Limited vs Principal Commissionerof Customs ACC (Import) Commissionerate 2025 TAXSCAN (CESTAT) 656

The Microsoft OS and additional drivers were included on QR CDs that HP India, the assessee, imported from Mentor of Singapore. It stated that the amount it had paid Mentor for the blank CD and the software copying was less than $1 USD per CD.

The two member bench of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that “the responsibility of the importer is confined to truthfully declaring the transaction value in the Bill of Entry. If the transaction value is not indicated correctly, the goods will be liable for confiscation under section 111(m) and NOT if the value declared in the Bill of Entry do not match with some value determined later by the proper officer during re-assessment or in any investigation or adjudication proceedings.”

CESTAT Holds Assessee must Pay Redemption Fine for Seized Goods Missing from their custody

COMMISSIONER OF CUSTOMS vs M/S AKAY CONES PVT. LTD 2025 TAXSCAN (CESTAT) 657

The respondents in this matter, M/s Akay Cones Pvt Ltd. and M/s Intrade Impex Pvt Ltd., who are owned and controlled by Sh. H.M. Prabhakar, were engaging in widespread customs duty evasion, according to information that was provided to the Directorate of Revenue Intelligence. Following their seizure during the investigation, the goods were given to the respondent for safekeeping under a super daginama.

The Tribunal noted that the Commissioner did not seize the items on the grounds that they were unavailable. The items may be released or confiscated if they are found to be in possession. The Commissioner acknowledges that the items may have been seized. He did not merely seize the items because they were misplaced while in the respondent's care. This is not an instance in which the things were not available for seizure or were not seized at all.

The two member bench of Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) observed that the Commissioner determined that the confiscated commodities were subject to confiscation. After the goods were seized, they were given to the respondents for safekeeping prior to the adjudication process. The commodities disappeared from their custody. The mere fact that the respondents altered the commodities, stole them, or allowed them to disappear from their possession does not absolve them of responsibility for confiscation.

Royalty on Net Sales for Manufacturing Know-How by Owens Corning Not Addable to Customs Value of Imports u/r 10(1)(c) of CVR: CESTAT

M/s.Owens Corning Industries (India) Pvt. Ltd. vs TheCommissioner of Customs (Seaport) 2025 TAXSCAN (CESTAT) 658

The appellant, Owens Corning Industries Pvt Ltd, previously known as OCV Reinforcements Manufacturing Ltd, is engaged in the business of manufacturing reinforcement glass fiber products and composite products.

The bench comprising Vasa Seshagiri Rao (Member Technical) and P. Dinesha (Member Judicial) found merit in the appellant's arguments and observed that as long as the royalty is not paid or payable on the imported goods and as long as there is no condition as to ‘sale of goods’ being valued, the same is not includable in the price.

The tribunal further held that the explanation to Rule 10(1)(c) applies only when the imported goods undergo the process for which royalty is paid, which was not the case here.

Freight Forwarder's Profit from Space Trading Not a Taxable Service: CESTAT

M/s. Seagull Maritime Agencies Pvt.Ltd vs Commissioner ofCentral Goods & Service Tax 2025 TAXSCAN (CESTAT) 659

Seagull Maritime Agencies Pvt. Ltd., the appellant, is a freight forwarder engaged in booking cargo space for importers and exporters and reselling it at a margin. The company is registered under the category of “Business Support Services” and was issued a show-cause notice for non-payment of service tax on the markup earned from freight charges during the period from 2010-11 to 2014-15 and from April 2015 to June 2017.

The two-member bench comprising Binu Tamta (Judicial Member) and Rajeev Tandon (Technical Member) observed that the appellant was operating on a principal-to-principal basis and was not acting as an intermediary. The tribunal referred to the CBEC circular and past tribunal decisions, noting that when a freight forwarder purchases and sells cargo space independently and bears all commercial risks, the activity is in the nature of trade, not service.

The tribunal explained that the appellant Shri P.K.Sahu, Advocate did not receive any commission or act on behalf of the shipping lines or exporters. So, the profit earned from space trading could not be taxed as a service. The tribunal set aside the tax demand, penalties, and interest. The appellant’s appeal was allowed with consequential relief.

Royalty Can’t Be Added to Import Value Without Proven Nexus and Sale Condition: CESTAT

M/s. Kamaz Motors Ltd. vs The Principal Commissioner of Customs 2025 TAXSCAN (CESTAT) 660

Kamaz Motors Limited, formerly known as Kamaz Vectra Motors Ltd., had imported CKD (Completely Knocked Down) kits between September 2011 and February 2014 for the manufacture of KAMAZ trucks. The company paid a royalty of USD 450 per kit to OJSC Kamaz Inc., the brand owner, under a technology licence agreement allowing it to use the KAMAZ trademark and manufacturing know-how.

The two-member bench comprising Judicial Member P. Dinesha and Technical Member M. Ajit Kumar observed that the royalty was paid for using the brand and technology after import, not as part of the import transaction. They observed that the supplier of the goods was not even a party to the royalty agreement. The tribunal further observed that the department failed to prove that royalty payment was a precondition for importing the goods or that it influenced the price.

The tribunal referred to multiple Supreme Court and CESTAT rulings, including Ferodo India Pvt. Ltd. and Toyota Kirloskar Motors Ltd., to support the view that both a connection between the royalty and imported goods and a condition of sale must be clearly proven for such payments to be included in customs value.

CESTAT denies Service Tax Exemption for Mandi Constructions as Market Structures Fall Under 'Business or Commerce'

RAJASTHAN STATE AGRICULTURE MARKETING BOARD VS COMMISSIONER CGST& CENTRAL EXCISE 2025 TAXSCAN (CESTAT) 661

Club Providing Ad Display Space Doesn’t Qualify as Advertising Agency, May Attract BAS: CESTAT

M/s. Calcutta Club Ltd. vs Commr. of Service Tax-II, Kolkata 2025 TAXSCAN (CESTAT) 662

Calcutta Club Ltd., the appellant, is a members-only club incorporated as a public limited company. During the financial years 2008-09 to 2012-13, the club earned advertisement income from businesses that displayed banners during events or in club publications. A show cause notice was issued, and the adjudicating authority confirmed a demand of Rs. 2,49,342 under the category of “Advertising Agency Service,” holding that the club was liable to pay service tax on this income.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that to be classified as an advertising agency, a person must be involved in the making, preparation, display, or exhibition of advertisements. Since the club did not perform these functions and only allowed advertisers to place ads during member events, it did not fall under the definition of an advertising agency.

The tribunal also referred to the CBIC circular, which supported the appellant’s position. The tribunal explained that such activities do not attract tax under “Advertising Agency Services” and any potential liability would arise, if at all, under Business Auxiliary Services, a category not invoked in the show cause notice. The tribunal set aside the demand of Rs. 2,49,342 under advertising agency service.

Mere wrong availment of Cenvat Credit cannot be equated with suppression of fact, fraud intent to evade duty: CESTAT

M/s RPK India Pvt. Ltd. vs Commissioner of CGST 2025 TAXSCAN (CESTAT) 663

The issue involved herein pertains to the alleged wrong availment of Cenvat Credit by the appellant of Service Tax paid on ‘outdoor catering services’ provided to its employees during the period January, 2015 to June, 2017 which, according to the department, do not qualify as an input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004 post amendment effective from 01.04.2011. Accordingly a show-cause notice dated 22.01.2020 was issued proposing recovery of the inadmissible Cenvat Credit availed by the appellant culminating in the Order-in-Original dated 15.12.2020. The appeal filed by the appellant against the said Order-in-Original was rejected vide impugned order dated 31.08.2021.

A single bench of Ajay Sharma, Member (Judicial) found that issue relating to eligibility of availing Cenvat Credit on ‘outdoor catering service’ was subject to divergent views and was finally settled by the Supreme Court only the year 2021 in the matter of Toyota Kirloskar Motor Pvt. Ltd. and also by the Larger Bench of the Tribunal in Wipro Ltd. As the show-cause notice has been issued by invoking the extended period of limitation, the same is not sustainable. Accordingly, the impugned order is set aside and appeal is allowed.

26 pieces of Gold Biscuit Smuggling: CESTAT Sets aside Penalty imposed under Customs Act In Absence of Documentary Evidence Showing Involvement

Smt. Hanjabam Memtombi Devi vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 664

Customs House Agent Cannot Be Penalized Without Direct Evidence or Involvement in Alleged Undervaluation: CESTAT

S A DALAL AND CO 277 vs COMMISSIONER OF CUSTOMS(IMPORT) 2025 TAXSCAN (CESTAT) 665

S A Dalal and Co., the appellant, is a licensed CHA based in Mumbai. A penalty of Rs. 10 lakhs was imposed on them under Section 112A of the Customs Act, 1962, in connection with a case involving alleged undervaluation and misdeclaration of imported mobile accessories by other parties. The customs department issued a show cause notice to the appellant and proceeded to penalize them, even though no investigation had been conducted against the CHA, no documents were recovered from their premises, and their statement was never recorded.

The single-member bench comprising Dr. Suvendu Kumar Pati (Judicial Member) observed that no investigation was conducted against the appellant, and they were not given an opportunity to defend themselves during the inquiry. It further held that under Section 114 of the Indian Evidence Act, the statements of co-accused are not sufficient unless corroborated by independent evidence. Since there was no material on record linking the CHA to the alleged undervaluation, the tribunal held that the penalty could not be sustained.

The tribunal allowed the appeal and set aside the penalty of Rs. 10 lakhs imposed on S A Dalal and Co., ruling that a CHA cannot be penalized without direct involvement or evidence.

Use of Imported Raw Materials Does Not Disqualify Customs Exemption If DTA Goods Are Made from Indigenous Inputs: CESTAT

M/s Bharat Resins Ltd. vs C.G.S.T. & Central Excise-Surat 2025 TAXSCAN (CESTAT) 666

Bharat Resins Ltd., the appellant, is a 100% EOU engaged in manufacturing goods from both imported and indigenous raw materials. For the period from August 2015 to March 2016, the appellant cleared certain finished goods to the DTA and claimed exemption from duty under Serial No. 3 of Notification No. 23/2003-CE. The department issued a show cause notice on 17.05.2017 alleging that since imported raw materials were used in manufacturing, the appellant was not eligible for the exemption. The show cause notice proposed recovery of duty and imposition of penalties.

The single-member bench comprising Somesh Arora (Judicial Member) observed that the Eurotex Industries decision correctly clarified that the use of imported materials in general does not disqualify a unit from exemption, as long as goods cleared into the DTA are made wholly from indigenous raw materials. The tribunal also found merit in the limitation argument.

The tribunal allowed the appeal on the ground of limitation and did not go into the merits further. The show cause notice and consequent demand were set aside, and the appellant was granted consequential relief.

WAPs with MIMO but Without LTE Standards Eligible for Customs Duty Exemption: CESTAT Overrules Dept's Interpretation

M/s.Inflow Technologies Private Ltd vs The Commissioner ofCustoms 2025 TAXSCAN (CESTAT) 667

Inflow Technologies Pvt. Ltd., the appellant, had imported WAPs between July 2014 and June 2017 and classified them under Customs Tariff Item 8517 6990. The appellant claimed exemption under Serial No. 13 of Notification No. 24/2005, which provides a nil rate of duty for all goods except a few, including "MIMO and LTE products."

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) observed that the use of the word “and” in the phrase “MIMO and LTE products” must be read conjunctively, and not as “MIMO or LTE.” It explained that if the intention was to exclude products with either of the technologies, the notification would have used the word “or” or separated the terms using punctuation.

The tribunal referred to the 2021 amendment in the notification that replaced “MIMO and LTE products” with “(i) MIMO products; (ii) LTE products.” It observed that this amendment was clarificatory and applicable only prospectively from February 2, 2021. The earlier version of the notification must be interpreted as excluding only products that feature both technologies together.

Win for Hindustan Unilever: CESTAT Confirms Classification of Petroleum Jelly Products like Aloe Vera and Baby Variants as Skincare Preparations

M/s. Hindustan Unilever Limited vs The Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 668

HUL, the appellant, manufactures personal care products at its Skin Care Unit in Puducherry. The dispute arose over the classification of two of its products: Petroleum Jelly - Aloe Vera and Petroleum Jelly - Baby.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) referred to its own earlier decision in HUL’s case and explained that the classification of the products as skincare preparations was appropriate. The tribunal also cited the Supreme Court’s ruling in the Jindal Drugs case, which supported the interpretation that cosmetic relabelling or packaging can fall under manufacture for classification purposes.

The tribunal set aside the Commissioner’s order and allowed the appeal, confirming that Petroleum Jelly - Aloe Vera and Petroleum Jelly - Baby are rightly classified under CETH 33049990. The appellant was granted consequential benefits, if any, as per law.

Commissioner (Appeals) Failed to Address Allegations and Defence: CESTAT Orders Re-examination in Import Misdeclaration

Ketan Sood vs Principal Commissioner 2025 TAXSCAN (CESTAT) 669

Ketan Sood, the appellant and proprietor of Venus Enterprises, along with co-appellants Vineet Goyal and Ravinder Puri, faced proceedings initiated by the Directorate of Revenue Intelligence (DRI). The DRI examined three containers and found that one container held fewer cartons of footwear than declared, while two others contained foreign cigarettes instead of the declared disposable cups. A show cause notice was issued proposing confiscation of the goods and imposition of penalties.

The two-member bench comprising Justice Dilip Gupta (President) and P. Anjani Kumar (Technical Member) found that the Commissioner (Appeals) did not examine the case on the merits and failed to explain why the defence raised by the appellants was rejected. The tribunal held that such a non-speaking order violated the principles of natural justice and could not be sustained.

The tribunal remanded the matter back to the Commissioner (Appeals) for fresh adjudication, directing that a reasoned, speaking order be passed after considering all allegations, the adjudication findings, and the appellants' defence. The appeal was allowed by way of remand.

No Service Tax Payable on Amount Collected as Liquidated Damages: CESTAT

Bharat Dynamics Ltd vs Commissioner of Central Tax Hyderabad 2025 TAXSCAN (CESTAT) 670

Bharat Dynamics Limited, the appellant, is a public sector enterprise under the Ministry of Defence. The company had collected liquidated damages (LD) from vendors and contractors for delays or non-compliance with contract terms. The department issued a show cause notice demanding service tax on these amounts, treating the collection of LD as a declared service under Section 66E(e) of the Finance Act, 1994, which relates to obligations refrained from or tolerated under a contractual arrangement.

The Principal Commissioner of Central Tax, Hyderabad, confirmed the demand in an order. Aggrieved by this, Bharat Dynamics Ltd filed an appeal before the CESTAT.

The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) explained that liquidated damages are not collected in exchange for a service but are meant to compensate for a contractual breach. So, such payments do not fall within the scope of taxable services under Section 66E(e) of the Finance Act. The tribunal set aside the order confirming the service tax demand and allowed the appeal, granting Bharat Dynamics Ltd relief from the tax liability on liquidated damages.

No Extended Limitation or Penalty Where Clearance Details Were Disclosed in ER-1 Returns: CESTAT

Commissioner of Central Excise & Service Tax, Guntur vs SafeParentals Ltd 2025 TAXSCAN (CESTAT) 671

The case arose from two orders passed by the Commissioner of Central Excise, Guntur, partially confirming duty demands against Safe Parentals Ltd and Safe Formulations Ltd. The department filed appeals before the Tribunal seeking to reinstate the full demand on the ground that the companies had not included certain clearances made under third-party brand names while calculating their total value of clearances under Notification No. 08/2003-CE.

The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) observed that the legal position had already been settled in the earlier Tribunal order, which was not appealed by either party. It further observed that the companies had disclosed the disputed clearances in their ER-1 returns, and hence, the extended limitation period could not apply. The tribunal also clarified that penalties were not warranted in such a situation where all facts had been disclosed.

CESTAT Quashes Penalty on Diamond Firm Director: No Proof of Misdeclaration or Overvaluation in Exports

Shri Prakash Goti vs Commissioner of Customs (Airport & ACC) 2025 TAXSCAN (CESTAT) 672

Shri Prakash Goti, the appellant, is the Director of Dharmanandan Diamonds Private Limited, a company engaged in importing rough diamonds, polishing them, and exporting the finished product to countries like the USA, Israel, and Belgium.

The two-member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) observed that no evidence had been brought on record to show that the appellant was involved in any misdeclaration or overvaluation of exported diamonds. The tribunal observed that the investigation primarily targeted the importing companies, and there was no direct link proving the appellant's involvement in any illegal activity.

The tribunal explained that imposing a penalty without even confiscating the goods is contrary to the legal framework under Section 114. It further observed that the entire case was based on assumptions and that no specific findings had been made against the appellant. The tribunal set aside the penalty and allowed the appeal.

Win for Shipping Line: CESTAT Rules SCMTR Does Not Require Waiver of Detention Charges Beyond 60 Days

ASR INDIA PVT LTD vs COMMISSIONER OF CUSTOMS-MUNDRA 2025 TAXSCAN (CESTAT) 673

ASR India Pvt. Ltd., the appellant, is a registered shipping line and authorised carrier under SCMTR. The company filed an appeal against the order passed by the Principal Commissioner of Customs, Mundra, which revoked its carrier registration and imposed a penalty of Rs. 50,000. The order alleged that ASR India failed to waive detention charges for containers that were held up by Customs for inspection, thus violating Regulations 10(1)(l) and 10(1)(m) of SCMTR.

The two-member bench comprising Ramesh Nair (Judicial Member) and Raju (Technical Member) observed that Regulation 10(1)(l) requires waiver of detention charges only for the period of Customs hold, and even that is limited to 60 days. It clarified that the proviso to the regulation allows shipping lines to impose charges beyond 60 days at their discretion. The tribunal also found that ASR India had not deliberately violated any rule and that the directions given by Customs to waive all charges beyond the mandated period were not legally enforceable.

CESTAT Directs Assessee to Submit Work Order Issued to Main Contractor as Activity Undertaken was Similar, Remands Matter

M/s. Poonam Construction & Co. vs The Commissioner ofCentral Excise & Service Tax 2025 TAXSCAN (CESTAT) 674

M/s. Poonam Construction & Co. , the appellant challenged the impugned order demanding Service Tax for the period 2015-16 to 2016-17 on the basis of information received from Income Tax Department that appellant has shown a income of Rs. 2,24,01,689/- against the provision of service during the impugned period. Therefore, the Show Cause Notice dated 08.10.2020 was issued to the appellant to demand Service Tax from the appellant.

A two member bench of Shri Ashok Jindal, Member (Judicial) And Shri K.Anpazhakan, Member (Technical) observed that as the activity undertaken by the appellant with regard to construction do not clearly showing that it is in regard to railways which can be evident from the work order assigned to the main contractor, therefore, the work order assigned to the main contractor is essential to ascertain the fact that the activity undertaken by the appellant is in regard to railways. Therefore, we direct the appellant to produce the work orders issued to the main contractor to ascertain the true facts.

Penalty u/s 114AB of Customs Act not imposable in any instrument by fraud, collusion, wilful mis-statement or suppression of fact: CESTAT

New Era Trading Pvt. Ltd. vs Principal Commissioner of Customs 2025 TAXSCAN (CESTAT) 675

New Era Trading Pvt. Ltd. has filed this appeal to assail the order dated 27.04.2023 passed by the Principal Commissioner of Customs, ICD-Export, TKD, New Delhi , confiscating the goods exported under section 113(d), (g) and (i) of the Customs Act, 1962 but as the goods had been exported and were not available for confiscation nor cleared under a bond, redemption fine in lieu of confiscation has not been imposed.

A two member bench of Justice Dilip Gupta, President and P. V. Subba Rao, Member (Technical) has held that penalty under section 114AB of the Customs Act could not have been imposed upon the appellant as the appellant had not obtained any instrument by fraud, collusion, wilful mis-statement or suppression of fact. Such allegations have been made in the impugned order based on statements of persons who were not examined by the Adjudicating Authority in accordance with the procedure prescribed under section 138B of the Customs Act. The statements, therefore, could not have been considered.

No Service Tax on Reimbursements Received as Pure Agent: CESTAT

M/s. Seamax Shipping India Pvt. Ltd. vs Commissioner of GST& Central Excise 2025 TAXSCAN (CESTAT) 676

M/s. Seamax Shipping India Pvt. Ltd., the appellants are engaged in providing clearing and forwarding agency service. On scrutiny of the financial records of the appellants for the period 2007 – 08 to 2010 – 11, Revenue noticed that they have not included certain incomes relating to service charges receipts, drawback commission, exchange rate fluctuation income and brokerage in the value of their taxable service; an investigation was initiated and statements of different persons were recorded.

A two member bench of Shri P. Dinesha, Member (Judicial) and Shri M. Anjani Kumar, Member (Technical) held that the reimbursements received by the appellant from their customers is not in respect of any service rendered by them but it is the reimbursements given to them as a pure agent and therefore such reimbursements are not taxable service as by no way of imagination they can be linked to any conservation for such service rendered. The tribunal set aside the impugned order and allowed the appeal.

Products Generated During Rice Bran Oil Refining Treated as “Waste”, Exempt from Excise Duty: CESTAT

M/s Godavari Edible Bran Oil Pvt Ltd. vs Commissioner of CentralTax Visakhapatnam– GST 2025 TAXSCAN (CESTAT) 677

Godavari Edible Bran Oil Pvt Ltd,appellant-assessee,was engaged in manufacturing refined rice bran oil. In the process, R.B. Fatty Acid, R.B. Wax, and R.B. Gums were generated. The appellant treated these as waste and claimed exemption under Notification No. 89/95-CE dated 18.05.1995. The department treated them as by-products and denied the exemption. The demand was confirmed, and a penalty was imposed. On appeal, the penalty was set aside, but the demand was upheld.

The two member bench comprising Angad Prasad ( Judicial Member) and A.K.Jyotishi (Technical Member) considered submissions from both sides and reviewed the records. It noted that the issue was limited to whether the products generated during the refining of rice bran oil qualified as waste or by-products, and whether they were eligible for exemption under Notification No. 89/95-CE dated 18.05.1995.

Based on earlier decisions, the appellate tribunal found that such products had been treated as waste and were eligible for the exemption. It, therefore, held that the order passed by the Commissioner (Appeals) was not justified and accordingly set it aside.

No Denial of Accumulated CENVAT Credit Refund even if Exported Service is Non-Taxable: CESTAT directs ₹61.12L Refund

M/s. Symphony Marketing Solutions India Pvt. Ltd vs TheCommissioner of Central Excise 2025 TAXSCAN (CESTAT) 678

The appellant Symphony Marketing Solutions India Pvt. Ltd., is engaged in providing IT Enabled Services to overseas clients. The company had filed a refund claim for ₹61,12,804 for CENVAT credit under Rule 5 of the CENVAT Credit Rules (CCR) 2004, read with Notification No. 5/2006-Central Excise (Non-Tariff) dated 14 March 2006.

The bench comprising D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) found merits in the appellant's contention and concluded that the appellant was eligible for refund of accumulated credit.

The Tribunal further by relying on the mPortal India Wireless Solutions observed that the department’s inconsistent conduct in allowing refund claims for earlier and later periods without raising any dispute about the nature of exported services further supported the appellant’s claim.

CESTAT Sets Aside ₹55 Cr Penalty: No Customs Violation as Overvaluation Led to Higher Duty

Shri Saravanan Palaniappan vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 679

The appellant Sindhu Lakshmi Impex, a partnership firm along with its partners Saravanan Palaniappan and Malav Rajen Shah engaged in the import of Black Pepper from Sri Lanka, challenged a notice issued by the Commissioner of Customs.

Through the notice in question the department had rejected the declared transaction value of the black pepper imports and imposed substantial penalties under Rule 3(1) and Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962.

The Tribunal emphasized that the Commissioner failed to proceed sequentially in accordance with Rules 4 to 9 of the Customs Valuation Rules, as required when rejecting the declared value and that the DGFT Notification imposed only a conditional and not an absolute prohibition. Since the imports met the CIF value threshold, the goods could not be considered “prohibited”.

CESTAT sets aside Demand in respect of Cargo Handling Services and GTA Services in respect of Raw Sugar

M/s. Aspinwall & Co. Ltd. vs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 680

The appellant, M/s. Aspinwall & Co. Ltd. are engaged in the provision of service related to import and export of goods at Chennai Port. A Show Cause Notice dated 12.4.2007 was issued to the appellants demanding service tax on services rendered viz. port service, cargo handling service and GTA service along with interest and penalties.

The two-member bench Shri P. Dinesha, Member (Judicial) and Shri M. Anjani Kumar, Member (Technical) held that the authorities below should have refrained from passing an order in the remand proceedings when the issue was under consideration by the Tribunal.

The appellants have been subjected to repeated proceedings on the same issue which is decided by the Tribunal in the appellant’s own case and in respect of the very same proceedings. The Bench takes serious note of the same and cautions the authorities against any recurrence in this regard.

CESTAT Sets aside Penalty under Customs Act for Assissiting Illegal Export when Confiscation of Exported Consignment Already set aside

M/s Safewater Lines (I) Pvt Ltd. vs Commissioner of Customs(Export)

2025 TAXSCAN (CESTAT) 681

M/s Colour Cottex Pvt Ltd. is engaged in the manufacture and export of Ready Made Garments. It entered into contracts for supplying Ready Made Garments with Lagoon Trading LLC, Lagcy Trading LLC, and Royal Readymade Garments based in U.A.E. To encourage exports to remote markets, the Government introduced the Focus Market Scheme, designed to offset higher freight costs borne by buyers. Under the FMS, exporters often offer reduced prices to customers in designated countries like Panama.

The Commissioner confiscated the goods under section 113 of the Customs Act. A two member bench of Justice Dilip Gupta, President and P. V. Subba Rao, Member (Technical) held that the confiscation of goods has been set aside by order of date in Customs Appeal No. 55760 of 2023 filed by Color Cottex. Consequently, penalty under section 114(iii) of the Customs Act cannot be levied upon the appellant.

CESTAT Remands Transocean Offshore’s Appeals for De Novo Hearing as CIT(A) Rejected Appeal on Limitation w/o Adjudicating on Merits

Transocean Offshore Deepwater Drilling Inc vs Commissioner ofService Tax-II, Mumbai 2025 TAXSCAN (CESTAT) 682

The appellant Transocean Offshore Deepwater Drilling Inc., challenged two orders passed by the Commissioner of Income Tax (Appeals) ( CIT(A) ) that were dismissed on the ground that they were filed beyond the maximum period allowed and were thereby time-barred.

The bench comprising Dr. Suvendu Kumar Pati (Judicial Member) and Anil G. Shakkarwar (Technical Member) observed that there was no delay in filing the appeal before the CIT(A).

The Tribunal further held that the CIT(A) should have decided the appeal on merit and as required by Section 35A(4) of the Central Excise Act, 1944, should have stated in writing the points for determination, the decision thereon, and the reasons for the decision which was not done in this case.Transocean Offshore Deepwater Drilling Inc vs Commissioner of Service Tax-II, Mumbai.

No Prohibition on Lending IEC: CESTAT Sets aside Penalty imposed u/s 114AA of Customs Act for accepting IEC of an Import Firm

M/s. GND Cargo Movers vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 683

M/s. GND Cargo Movers has sought quashing of the order dated 31.05.2019 passed by the Commissioner of Customs (Appeals), New Customs House, New Delhi by which the order dated 18.05.2016 passed by the Additional Commissioner of Customs, ACC Import (Adjudication), New Delhi , imposing penalty of Rs. 50,00,000/- upon the appellant under sections 112 and 114AA Customs Act, 19624 has been upheld and the appeal has been dismissed.

It has been observed that the statements recorded during inquiry/investigation by officers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statements of the witnesses have to be recorded before the adjudicating authority, after which such statements can be admitted in evidence.

The tribunal set aside the impugned order passed by the Commissioner (Appeals) and allowed the appeal.

Statement recorded u/s 108 of Customs Act not a Valid evidence u/s 138B: CESTAT

M/s Colour Cottex Pvt. Ltd. vs Commissioner of Customs (Export) 2025 TAXSCAN (CESTAT) 684

M/s Colour Cottex Pvt. Ltd., the appellant has filed the appeal to challenge the order passed by the Commissioner of Customs, ICD-Export, Tughlakabad confiscating the goods exported through 211 Shipping Bills under section 113 (d), (g) and (i) of the Customs Act, 19623 but as the goods were not physically available for confiscation nor cleared under a bond, redemption fine in lieu of the confiscation has not been imposed.

A two member bench of Justice Dilip Gupta, President and P. V. Subba Rao, Member (Technical) found that the Commissioner has confiscated the goods under section 113 of the Customs Act for the reason that the appellant and Imran Mirza colluded. This finding is again based on the statement made by Imran Mirza under section 108 of the Customs Act, which statement cannot be relied.

The Tribunal while allowing the appeal set aside the confiscation of goods and consequently, the penalty under section 114(iii) of the Customs Act could not have been levied upon the appellant.

Co-operative Society eligible for Abatement/exemption of 75% of Service Tax liability: CESTAT

Kailashpati Ex-Servicemen Welfare Co-Operative Society Limitedvs Commissioner of Central Goods,Service Tax & Central Excise-Jaipur-I 2025 TAXSCAN (CESTAT) 685

M/s Kailashpati Ex Servicemen Welfare Society Limited, the appellant challenged the Order-in-Appeal No wherein the Commissioner (Appeals) confirmed the demand of Rs. 19,35,929/- along with interest and appropriate penalty. The appellant was registered with the department under the category of “Security Agency services” and availing the benefit of notification 30/2012-ST dated 20.6.2012. During the period 2012 to 2015, the appellant had provided security services to various organizations and collected charges for the security services provided by them.

A two-member bench of Dr. Rachna Gupta, Member (Judicial) and Hemambika R. Priya, Member (Technical) held that the appellant being a co-operative society was very much eligible for the abatement/exemption of 75% of the tax liability. The Order-in-Original has denied the said exemption holding the appellant is not the “Association of Person”.

It is an admitted fact that 25% of tax liability has been discharged by the appellant, and the confirmation of the remaining 75% of the gross value as service tax from the appellant is not sustainable.

Mere booking of income as service charge in their balance sheet would not Transfer entire amount to a single activity under ‘Business Auxiliary Services’: CESTAT

Madhya Pradesh Laghu Udyog NigamLimited vs Commissioner ofCentral Goods, And Service Tax, Excise and Customs, Bhopal 2025 TAXSCAN (CESTAT) 686

Mere bald allegations in a notice are not enough to sustain the demand against the appellant. The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that mere booking of income as a service charge in their balance sheet would not transfer the entire amount to a single activity under ‘Business Auxiliary Services’.

A two-member bench of Dr. Rachna Gupta, Member (Judicial) and Hemambika R. Priya, Member (Technical) viewed that the non-payment of tax was detected during the audit of the records of the appellant. This evidences the fact that the appellant was registered and was filing his returns with the department. We note that the impugned order has held that as the appellant did not inform the department regarding the correct amount of consideration received in their ST-3 returns, as compared to the amount reflected in their Books of Accounts, and had suppressed the correct value of the taxable service provided by them with an intent to evade payment of service tax.

Setback to Aircel Ltd: CESTAT Rules Refund Appeals Non-Maintainable After IBC Resolution Plan Approval

M/s.Aircel Limited vs The Commissioner of GST & CentralExcise 2025 TAXSCAN (CESTAT) 687

Aircel Ltd., the appellant, had filed multiple appeals challenging service tax demands and one appeal seeking a refund. While these appeals were pending, the appellant underwent insolvency proceedings. The National Company Law Tribunal (NCLT) approved a Resolution Plan on June 9, 2020, placing the company under the management of a Monitoring Committee.

The two-member bench comprising P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that even claims that might enhance the assets of the corporate debtor could not be pursued if they were not part of the approved Resolution Plan.

The tribunal explained that after the approval of the Resolution Plan, the original identity of the corporate debtor ceases to exist, and it cannot continue litigation merely to recover earlier claims. The tribunal held that the IBC provides a clean break for the corporate debtor and its successor, and such refund claims cannot survive unless explicitly preserved in the Resolution Plan.

Setback to CEAT: CESTAT Denies CENVAT Credit Utilisation of AED(GSI) for Pre-2000 Liabilities

CEAT Limited vs Commissioner of Central Excise 2025 TAXSCAN (CESTAT) 688

CEAT Limited, the appellant, is a manufacturer of tyres. The company used Dipped Nylon Tyre Cord Fabrics (DNTCF) as an input and did not pay AED(GSI) on it during the period from March 16, 1995, to June 2, 1998, as it had classified the product differently. This classification was later rejected by the Supreme Court, which ruled in favour of the revenue, confirming that AED(GSI) was payable on the input.

The tribunal explained that once Parliament enacts a retrospective restriction, it becomes binding unless set aside by a competent court. It also rejected CEAT’s reliance on Rule 3(7)(b) of the 2004 Rules, stating that the relevant provision in this case was Rule 3(6)(b) of the 2002 Rules, as modified by the Finance Acts. The tribunal held that the explanation to the rule, as amended, must be read to mean that the duty must have been “leviable and paid” on or after April 1, 2000. The tribunal ruled that CEAT had wrongly utilised the CENVAT credit and upheld the demand of Rs. 6,59,36,795 along with interest and penalty. The appeal was dismissed.

Relief to ITC Limited: CESTAT Rules Quicklime with 92% Purity is Classifiable as Quicklime, Not as Other Inorganic Chemicals

M/s. ITC Limited vs Principal Commissioner of Customs 2025 TAXSCAN (CESTAT) 689

ITC Limited, the appellant, had imported quicklime for use in its Paperboards and Specialty Papers Division. The company declared the product under tariff heading 2522 10 00, which specifically covers quicklime. The Customs Department reclassified the goods under tariff heading 2825 90 90, a residuary category under inorganic chemicals, on the basis of lab test results showing that the imported product was chemically processed and contained around 92% calcium oxide.

CESTAT Rules Stationary Engines Sold in DTA Qualify as “Similar Goods” Under FTP 2009-14, Concessional Duty Allowed

M/s. Same Deutz-Fahr India Pvt. Ltd. vs Commissioner of GST& Central Excise 2025 TAXSCAN (CESTAT) 690

Same Deutz-Fahr India Pvt. Ltd., the appellant, is a 100% Export Oriented Unit engaged in the manufacture of tractors, engines, and parts. The company was permitted under the FTP to sell “similar goods” in the domestic market at a concessional duty rate as per Notification No. 23/2003-CE.

The two-member bench comprising M. Ajit Kumar (Technical Member) and P. Dinesha (Judicial Member) held that the term “similar goods” used in the FTP must be interpreted in the context of trade facilitation and not strictly through tax valuation rules.

CESTAT Sets Aside Service Tax Demand Based on Form 26AS as Recipient Pays Tax Under RCM

Maninder Singh vs Commissioner of C.G.S.T. and Central Excise 2025 TAXSCAN (CESTAT) 691

Maninder Singh, appellant-assessee,provided transportation services from April 2016 to June 2017. Based on information from Tata Motors Limited and the Income Tax Department, it was alleged that he received payments for these services but did not pay Service Tax.

The two member bench comprising Ashok Jindal (Judicial Member) and K.Anpazhakan ( Technical Member) found that the Service Tax demand was raised based only on Form 26AS from the Income Tax Department, showing receipt of payments by the assessee for services during April 2016 to June 2017.

In view of this, the appellate tribunal held that the demand and penalties were not justified, set aside the impugned order, and allowed the appeal.

CESTAT Rebukes Appellant for using Language Casting Aspersions on Customs Commissioner in Grounds of Appeal

M/s. Raj Brothers Shipping Pvt. Ltd. vs Commissioner of Customs(Import) 2025 TAXSCAN (CESTAT) 692

The appellant, Raj Brothers Shipping Pvt. Ltd., was the holder of CB License issued by Chennai Customs. They filed an appeal before the CESTAT challenging the penalty of Rs. 50,000 imposed under Regulation 18 of the Customs Brokers Licensing Regulations (CBLR) 2013.

While examining the appeal, the tribunal noted that the appeal memorandum contained language casting aspersions on the Commissioner and showing disrespect towards him.

The tribunal further observed that it fervently hopes not to find such disrespectful language being used in future appeals. Accordingly, the appeal was disposed of.

Relief for Air India: CESTAT Rules CRS Services Not Taxable Under OIDAR Due to Data Ownership

Air India Ltd vs Commissioner (Adjudication) Service Tax 2025 TAXSCAN (CESTAT) 693

Air India, the appellant, had entered into agreements with foreign-based CRS providers like Abacus, Amadeus, and Galileo, allowing them to disseminate Air India's flight information to global travel agents. These CRS platforms charged Air India a fee per booking and shared a portion of it with travel agents. The department issued a show cause notice alleging that Air India had failed to pay service tax on a reverse charge basis for the services provided by the foreign entities under the category of OIDAR services, covering the period from October 2003 to December 2008.

The Larger Bench comprising Dilip Gupta (President), P. V. Subba Rao (Technical Member), and Anil Choudhary (Judicial Member) agreed with Air India’s submissions. The tribunal observed that the essence of OIDAR lies in the provision of data or access to a database that the service provider owns or controls. In this case, it was clear that the data originated from Air India and was not owned or supplied by the CRS companies. The tribunal found that the real intent of the agreements was to increase Air India’s ticket sales through broader access to its own flight information, not to procure information from a third-party database.

The tribunal distinguished the earlier decisions relied on by the department, stating that those cases did not adequately consider the ownership of the data or the true nature of the service. The tribunal agreed with the ruling in United Telecom Ltd., where it was held that the ownership of data is a key factor in determining whether a service falls under OIDAR.

No Service Tax on Fabrication of Windmill Parts Covered Under Excise Exemption: CESTAT

R & S Fabrication Works vs Commissioner of C.E. & S.T 2025 TAXSCAN (CESTAT) 694

R & S Fabrication Works,appellant-assessee,carried out fabrication work from 2014-15 to 30th June 2017, making large windmill parts that were sold to M/s. Fedders Lloyds Corporation Ltd. The charges received were only for fabrication, as materials were supplied by the buyer.

The assessee argued that the items were excisable goods and exempt from service tax under Notification No. 12/2012-CX, which covered components and parts of wind-operated electricity generators, including towers, rotors, and turbine controllers.

The two member bench comprising Somesh Arora (Judicial Member) and R.Bhagya Devi (Technical Member) examined the arguments from both sides and concluded that the fabricated goods were, at the relevant time, excisable in nature but were treated as exempt under Notification No. 12/2012-CX. Since they qualified as exempt excisable goods, the tribunal held that they could not be taxed under service tax. As a result, the appeals were allowed.

Win for Samsung: CESTAT Classifies Lithium-Ion Batteries Used in Mobile Phones as 'Parts', Attracting 12% GST instead of 28%

M/s Samsung India Electronics Pvt. Ltd. vs PrincipalCommissioner of Customs 2025 TAXSCAN (CESTAT) 695

Samsung India Electronics Pvt. Ltd., the appellant, is engaged in the manufacture of mobile phones in India. For this purpose, it imported lithium-ion batteries, classifying them under Customs Tariff Item 8507 60 00 and paid IGST at the rate of 12% under Entry No. 203 of Schedule II to the IGST Rate Notification.

The two-member bench comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) observed that the IGST Rate Notification is a taxing notification and must be interpreted strictly. It observed that Entry 203 of Schedule II applied to goods under Chapter 85 that are parts used for manufacturing telephones. Since lithium-ion batteries are classified under Chapter 85 and used in the manufacture of mobile phones, they fall within the scope of the entry.

The tribunal further observed that the Customs Tariff and the IGST Rate Notification are not fully aligned, and rules of interpretation under the Customs law apply only “so far as may be.” It also referred to GST Council clarifications and an Advance Ruling in the case of Epcos India, both of which supported the view that lithium-ion batteries used in mobile phone manufacturing attract 12% GST.

Penalty u/s 114(iii) of Customs Act Could not impose based on Statement Recorded u/s 108 of Customs Act: CESTAT

Shanti Swaroop Sharma vs The Principal Commissioner of Customs 2025 TAXSCAN (CESTAT) 696

Shanti Swaroop Sharma and Sangeet Tuteja, the Directors of New Era Trading Pvt. Ltd., an exporter of readymade garments, to assail the order dated 27.04.2023 passed by the Principal Commissioner of Customs, ICD (Exports) Tughlakabad, New Delhi , imposing penalties on them under section 114(iii) and section 114AA of the Customs Act, 19622 for the reason that they had connived with Imran Mirza, Proprietor of M/s Concorde Shipping and Logistics India and instead of exporting the goods to countries listed in the Focus Market Scheme, diverted them to Dubai to enable the exporter to avail undue benefits under the said Focus Market Scheme.

The two member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that the statement of Shanti Swaroop Sharma made under section 108 of the Customs Act would not be relevant. The bench found that Shanti Swaroop Sharma and Sangeeta Tuteja knowingly prepared and gave false or indirect information regarding the country of export destination is not based of any evidence but is based on mere statements recorded under section 108 of the Customs Act. These statements cannot be relied upon.

Revenue Proceedings not Possible After Issuance of Discharge Certificate Under SVLDRS Scheme: CESTAT

Commissioner of Central Goods vs M/s. Akansha Sales Promoters 2025 TAXSCAN (CESTAT) 697

Packing/repacking of parts of a device is not manufacturing u/s 2(f)(iii) of Central Excise Act: CESTAT sets aside Excise Duty Demand

M/s Case New Holland Construction vs Commissioner of CentralExcise 2025 TAXSCAN (CESTAT) 698

Case New Holland Construction Equipment (India) Private Limited, the assessee/appellant, is engaged in the manufacture of earth moving construction equipment: Wheeled Tractor Loader Backhoe and Vibratory Compactor. These two shall be collectively referred to as construction equipment. They were classifiable under Excise Tariff Item 7 8430 50 90 of the First Schedule to the Central Excise Tariff, 1985.

The appeal was for setting aside that part of the order dated 27.02.2012 passed by the Commissioner, that while adjudicating four show cause notices confirms the central excise duty demand against the appellant and also orders for recovery of interest and also imposes penalty. The order also confiscates the seized goods under the provision of rule 25 of the Central Excise Rules, 2002 , but, as the goods were provisionally released, redemption fine has been imposed upon the appellant. The order also confiscates the goods manufactured and cleared by the appellant without payment of duty but as the goods were cleared redemption fine has been imposed.

The Tribunal, while allowing the appeal, observed that the period involved in all the three appeals is from 01.06.2006 to 30.06.2011. No excise duty would be levied on the packing/repacking of the parts of the two construction equipment prior to 29.04.2010 and set aside the impugned order passed by the Commissioner.

Relief for Goodyear India: CESTAT Rules Services Rendered Outside India by Foreign Agents Not Taxable Under Reverse Charge

M/s Goodyear India Limited vs Commissioner of Central Excise andService Tax 2025 TAXSCAN (CESTAT) 699

Goodyear India Ltd., the appellant, had engaged foreign commission agents to procure export orders from overseas buyers. These agents operated entirely outside India, and the company paid them commission for services related to overseas sales. The department issued two show cause notices, alleging that Goodyear was liable to pay service tax under reverse charge for the “Business Auxiliary Services” received from these foreign agents.

The single-member bench comprising Sanjiv Srivastava (Technical Member) observed that both the service and its use took place outside India, and there was no legal basis for invoking reverse charge. It held that Rule 3(iii) clearly applies only when services are received in India, which was not the case here. The tribunal also referred to the CBEC Circular and the judgment in Orient Crafts Ltd. to support its conclusion that such services are not taxable.

The tribunal found that the demand was not only incorrect on merits but also time-barred. It held that there was no suppression or willful misstatement by the appellant, as the department was already aware of the commission payments through correspondence. The invocation of the extended limitation period and imposition of penalties was unjustified. The tribunal set aside the service tax demand, interest, and penalties, and allowed the appeal filed by Goodyear India Ltd. along with connected appeals.

Customs Broker Suspension Over Delayed SCN: CESTAT Quashes Suspension Treating SCN as Time-Barred and Without Jurisdiction

M/s. Kailash Shipping Services Pvt. Ltd. vs The PrincipalCommissioner of Customs 2025 TAXSCAN (CESTAT) 700

Kailash Shipping Services Pvt. Ltd., appellant-assessee held a valid Customs Broker License up to 07.01.2026. The license was suspended based on an offence report dated 05.12.2024, which alleged that a tampered and fake self-sealing permission letter dated 04.08.2023 was used by the appellant while clearing three export containers at the DPE facility in Thiruvottiyur, Chennai on 14.11.2024.

The two member bench comprising Ajayan T.V (Judicial Member) and Vasa Seshagiri Rao (Technical Member) noted that the issuance of SCN No. 09/2025 dated 17.03.2025 (issued on 18.03.2025) under Regulation 17(1) of the CBLR, 2018, was an undisputed fact. The matter was taken up for out-of-turn hearing considering its impact on the livelihood of the assessee.

Relying on this judgment, the tribunal held that the delayed issuance of the show cause notice rendered it without jurisdiction and non-est in law. Consequently, the continued suspension of the customs broker license under the impugned order, which was dependent on the validity of the show cause notice, could not be sustained.

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