Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 13)

No Proceedings Allowable on Claims Excluded from Approved Resolution Plan u/s 31(1) of IBC: CESTAT

M/s.Dishnet Wireless Limited vs The Commissioner of GST & Central Excise 2025 TAXSCAN (CESTAT) 701

Dishnet Wireless Limited,appellant-assessee, had approached the National Company Law Tribunal (NCLT) for liquidation, and the Resolution Plan was approved. The counsel argued that since the plan was accepted, the demands in the impugned order could not survive, and the appeal should be treated as abated.

The two member bench comprising P.Dinesha(Judicial Member) and Vasa Seshagiri Rao (Technical Member) considered the submissions from both sides and examined the NCLT order. Since the Resolution Plan had been approved, an undisputed fact, the tribunal held that the appeal could not survive.

This view aligned with the Supreme Court’s ruling in Ghanashyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. (Civil Appeal No. 8129 of 2019), decided on 13 April 2021, which had been consistently followed by various CESTAT Benches.

Declared Import Value of Melamine from China Not Fraudulent: CESTAT Quashes ₹64 Lakh Anti-Dumping Duty Demand

M/s Goldstar Glasswares Pvt. Ltd. vs Principal Commissioner of Customs 2025 TAXSCAN (CESTAT) 702

Goldstar Glasswares Pvt. Ltd., the appellant, imported melamine from China for manufacturing tableware. The company declared a Free on Board (FOB) price of USD 1475 per metric ton, which when including freight and other charges, brought the total landed price above the anti-dumping duty threshold of USD 1681.49 per metric ton.

The single-member bench comprising Sanjiv Srivastava (Technical Member) observed that the customs officers had physically examined the imported goods, verified the documents, and cleared the consignments without any objection. It found that the anti-dumping notification had been cited on each bill of entry, indicating that there was no concealment or misrepresentation. The tribunal further observed that the department did not conduct any investigation after the seizure and issued the show cause notice only after a significant delay.

Extended Limitation Not Applicable in Matter Involving Legal Interpretation: CESTAT Allows Appeal as Demand Time-Barred

Richardson And Cruddas 1972 Ltd vs COMMISSIONER OF C.E.-Ahmedabad-II 2025 TAXSCAN (CESTAT) 703

Richardson And Cruddas,appellant-assessee,did not dispute the matter on merits, as it had already been decided in favour of the department by the tribunal in Final Order No. A/2551/WZB/AHD/2011 dated 21.12.2011, which they accepted. However, they challenged the invocation of the extended period of limitation.

The two member bench comprising Somesh Arora(Judicial Member) and R.Bhagya Devi (Technical Member) found merit in the assessee’s argument on limitation. It noted that the Supreme Court, in cases like Padmini Products and Baidyanath Ayurved Bhavan Ltd., had held that the extended period could not be invoked when the issue involved legal interpretation, and there was no clear intent to evade duty.

The appellate tribunal observed that there were differing legal views on the matter, and the assessee had reasons to doubt the department’s interpretation. Even though the case was decided against them on merits, the extended period was held to be wrongly invoked.

CESTAT Upholds Service Tax Demand Citing Backdated Agreement as Suppression; Limits Second SCN to Normal Period

Mechanical Packing Industries Pvt Ltd vs COMMISSIONER OF C.E. 2025 TAXSCAN (CESTAT) 704

Mechanical Packing Industries Pvt Ltd,appellant-assessee, was engaged in manufacturing textile articles and fabricating asbestos. During audit, it was found that the assessee had not paid service tax as a recipient under Notification No. 30/2012-ST. Two show cause notices were issued for the periods July 2012 to November 2014 and December 2014 to March 2015.

The tribunal held that altering the agreement date showed clear intent to evade tax, justifying the charge of suppression. On revenue neutrality, the tribunal referred to earlier rulings and held that it could not be used as a defence when fraud or suppression was involved.

CESTAT Finds No Evidence of F-Card Misuse After CHA Suspension; Sets Aside Revocation and Penalty

Shyamal Kumar Ghosh vs Principal Commissioner of Customs (Airport & ACC Commissionerate) 2025 TAXSCAN (CESTAT) 705

Shyamal Kumar Ghosh,appellant-assessee,was an F-Card holder working with the CHA firm M/s. S.K. Acharya in Kolkata since 2007. The firm handled customs clearance for importers like M/s. New Heera Sales Corporation and M/s. Ashok Trading Company. Its CHA licence, valid till November 2026, was suspended in June 2022 due to past irregularities, which also rendered the appellant’s F-Card non-functional.

The two member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) heard both sides and reviewed the records. It noted that the assessee was working with M/s. S.K. Acharya held an F-Card linked to the firm’s CHA licence. When the firm’s licence was suspended in June 2022, the assessee’s F-Card also became inoperative.

After that, the assessee started working independently based on his experience. He helped with customs clearance by sharing duty details and payment links but did so in his personal capacity, not as a valid F-Card holder.

The appellate tribunal observed that the imports in question were handled by M/s. P.R. Logistics, and the assessee played only a minor role. The allegations against him were based only on a statement from an importer, and no solid evidence was presented.

Trucks Used to Smuggle Vietnamese Pepper via Nepal Without Owner’s Knowledge: CESTAT Quashes Redemption Fine

Vinod Kumar Agarwal vs Commissioner of Customs (Preventive) 2025 TAXSCAN (CESTAT) 706

Vinod Kumar Agarwal, the appellant, was the registered owner of a truck intercepted by the Directorate of Revenue Intelligence (DRI) near Bettiah, Bihar. The truck was found to be carrying 3,975 kilograms of Vietnamese black pepper and 17,021 kilograms of arhar dal. The DRI alleged that the goods were smuggled from Nepal into India and issued a show cause notice proposing confiscation of the goods and the vehicle, along with a personal penalty on the owner under Section 112 of the Customs Act, 1962.

The single-member bench comprising K. Anpazhakan (Technical Member) found that the revenue had not submitted any evidence to prove that the appellant had knowledge of the illegal nature of the goods or had any role in the smuggling. It held that the mere use of the vehicle in smuggling, without proof of the owner's involvement or intent, was not sufficient to justify confiscation or penalty.

Works Contract Not Taxable Under Commercial or Industrial Construction Services :CESTAT

M/s Srishti Interiors vs Commissioner of Service Tax 2025 TAXSCAN (CESTAT) 707

Srishti Interiors,appellant-assessee, had provided construction services to various government and private entities, including Airport Authority of India (Amritsar and Jaipur), Municipal bodies, Punjab Police Housing Corporation, Punjabi University, and others. However, service tax was not paid on these services under the category of Commercial or Industrial Construction Services as defined in Section 65(105)(zzq) of the Finance Act, 1994.

The two member bench comprising S.S Garg (Judicial Member) and P.Anjani Kumar( Technical Member) noted that the assessee had delayed payment of service tax due to a serious accident but later paid the full amount along with interest before the show cause notice was issued. It found that the contracts with Power Grid Corporation and others were works contracts, but the Department had wrongly treated them as commercial or industrial construction services.

PVC Regrind Not Restricted Waste: CESTAT Classifies It as Freely Importable

M/s. Akshaya Steels vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 708

Akshaya Steels, the appellant, imported consignments declared as PVC Regrind from Malaysia under two Bills of Entry. During inspection, officers of the Special Intelligence and Investigation Branch (SIIB) found that one consignment also contained undeclared poppy seeds concealed behind bags of PVC Regrind. The second consignment contained only PVC Regrind.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) held that the PVC Regrind was properly declared and that the test report from CIPET confirmed it was not waste or scrap. The tribunal criticized the department for disregarding its own expert report and relying on visual appearance to override scientific analysis. It observed that the goods were not liable to restriction and upheld their classification under Heading 3904 as freely importable.

14-Year-Old Service Tax SCN yet to be Adjudicated: CESTAT Quashes Subsequent Statements of Demand

Kiran Gems Pvt. Ltd vs Commissioner of Service Tax-IV 2025 TAXSCAN (CESTAT) 709

Kiran Gems, an entity engaged in the manufacture and sale of Cut and Polished Diamond filed three appeals against an Order-in-Original dated March 22, 2016 passed by the Commissioner, Service Tax-IV, Mumbai, which had upheld the subsequent demand notices issued under Section 73(1A) of the Finance Act, 1994 for periods extending up to October 2013.

The Tribunal alluded to its own decision in the case of Shairu Gems Diamond Pvt. Ltd. vs. Commissioner of Service Tax-IV, Mumbai (2023 TAXSCAN (CESTAT) 362), where the Tribunal remanded the matter back to the original authority with the direction to consider the first SCN and thereafter to adjudicate the remaining SCNs issued by the department.

On this basis, CESTAT set aside the impugned order of March 22, 2016 while directing the original authority to adjudicate the March 28, 2011 SCN together with the subsequent SCNs of November 19, 2011, October 12, 2012 and October 28, 2013, all after providing Kiran Gems a reasonable opportunity of personal hearing.

Call Centers Providing Direct Services Are Not Intermediaries Under Service Tax: CESTAT

Teleperformance Global Services Pvt Ltd vs Commissioner of Central Goods & Service 2025 TAXSCAN (CESTAT) 710

Teleperformance Global Services Pvt. Ltd., the appellant, is engaged in providing call center and business process outsourcing (BPO) services to overseas clients. The company classified its services as exports and filed rebate claims for Swachh Bharat Cess paid on input services used for such exports. The original authority sanctioned most of the rebate and confirmed the services as exports under Rule 6A of the Service Tax Rules.

The single-member bench comprising Sanjiv Srivastava (Technical Member) rejected the department’s claim. The tribunal observed that the appellant provided services independently to foreign clients and received consideration in convertible foreign exchange. It held that such services fulfilled the conditions for exports under Rule 6A and were not intermediary in nature. The tribunal found no basis to disturb the settled classification of the services as exports and stated that re-examining the issue without new facts or legal grounds was unwarranted.

The tribunal ruled that call centers acting on their own account are not intermediaries and set aside the remand order, allowing the appeal with consequential relief.

Appellant not expected to Correlate Imports-Exports with whom License was Originally Issued: CESTAT in Relief to Volvo India

M/s.Volvo India Private Ltd. vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 711

Volvo India had imported internal combustion engines under a transferrable DFIA license originally issued to M/s. International Tractors Ltd. for parts of agricultural tractors under SION (Standard Input Output Norms) category C969. The license was subsequently transferred through an intermediary to Volvo India, which used it to import the engines for manufacturing medium and heavy commercial vehicles products falling under a different SION category, C1059.

The customs authorities, however, rejected Volvo India’s exemption claim under Notification No. 98/2009-Cus dated September 11, 2009. They contended that the license could only be used to import parts for agricultural tractors, not for commercial vehicle engines. This stand was upheld in the initial adjudication as well as by the Commissioner (Appeals), prompting Volvo India to approach the CESTAT.

Accordingly, the CESTAT set aside the impugned order, ruling that Volvo India was entitled to the customs duty exemption. “The Appellant cannot be expected to correlate its imports with the exports of the person to whom the license was originally issued,” the order concluded.

CESTAT says Income Tax Data Alone Insufficient, Excludes Value of Goods from Taxable Service while quashing Service Tax Demand, Penalties

M/s S. I. Enterprises vs Commissioner of Central Excise & CGST 2025 TAXSCAN (CESTAT) 712

M/s S.I. Enterprises, a registered service provider under the erstwhile service tax regime, was engaged in works contract services, particularly in the erection, commissioning and installation of industrial equipment such as boilers and electrostatic precipitators.

The Tribunal, presided over by Judicial Member Mr. P.K. Choudhary, observed that the reliance placed by the Department on the 26AS statement and the income tax filings was misplaced and insufficient. The Tribunal held that for purposes of service tax, the Department must clearly identify the nature of services rendered and determine the value of the service component as per the specific valuation rules. Referring to precedents such as Kush Construction, Arpit Advertising, and M. Sugandhi, the Tribunal reaffirmed that no tax can be levied in the absence of specific findings regarding the taxable nature of a transaction, and that financial data alone cannot suffice.

Penalty u/s 11AC(1)(c) Not Invokable in Absence of substantive evidence to Prove Deliberate Non-payment of Excise duty: CESTAT

M/s Singareni Collieries Company Ltd. vs Commissioner of Central Tax 2025 TAXSCAN (CESTAT) 713

M/s Singareni Collieries Company Ltd.,the appellant are in appeal against the order of the Commissioner dated 31.01.2019 (impugned order). The Adjudicating Authority decided the show cause notice issued by the Department, interalia, demanding Clean Environment Cess (Cess) of Rs. 2,35,29,71,776/- in respect of the closing stock of coal lying with them as on 30.06.2017 i.e. 5882429.44 MT. This demand was based on certain investigation wherein it was noticed that they had not paid Cess in respect of the stock lying with them as on 30.06.2017.

A two member bench A.K. Jyotishi, Member (Technical) and Angad Prasad, Member (Judicial) observed that it was a bonafide belief and the fact there was no positive or substantive evidence was brought out by the Department that said non-payment was deliberate or with an intent to evade payment of duty.

CESTAT upholds order denying condonation of Excise Appeal preferred after One Year

Mr. Sanjay Kumar Gupta vs Commissioner of Central Excise & Service Tax 2025 TAXSCAN (CESTAT) 714

The tribunal found that the issue involved in the present appeal is with respect to the condonation of delay in filing the appeal by the Commissioner (Appeal). The appeal has been filed as observed by the Commissioner (Appeal) after more than expiry of a period of 90 days after the receipt of the order of original authority.

It is to be noted that the periods “sixty days” and “thirty days” have been substituted for “within three months” and “three months” by Act 14 of 2001, with effect from 11-5-2001.

The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of Statute are vested with jurisdiction to condone the delay beyond the permissible period provided under the Statute. The period up to which the prayer for condonation can be accepted is statutorily provided. It was submitted that the logic of Section 5 of the Indian Limitation Act, 1963 (in short the „Limitation Act‟) can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order.

Relief to Taj SATS Air Catering, No Service Tax Leviable When VAT was paid on sale of food & beverages: CESTAT

Taj Sats Air Catering Limited vs Principal Commissioner of Central Goods, Service Tax and Central Excise, Delhi South 2025 TAXSCAN (CESTAT) 715

The show cause notice has given any explanation as to how the Appellant had collected service tax from the airlines, in absence of any such charges or tax mentioned in the invoice raised by the Appellant on the Airlines with respect to food items and beverages. Learned counsel further submitted that demand of service tax under Section 73 and demand of an 'amount' under Section 73A are completely different and distinct proceedings.

A two-member bench of Dr. Rachna Gupta, Member (Judicial) and Hemambika R. Priya, Member (Technical) observed that payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract.

While allowing the appeal, the Tribunal held that the said demand has been raised on the transactions where VAT was paid by the appellant on sale of food and beverage.

No Service Tax on License Fee /spectrum charges which are service tax w.e.f. 01.04.2016: CESTAT

Sistema Smart Technologies Limited vs Commissioner of Central Goods & Service 2025 TAXSCAN (CESTAT) 716

The assessee/appellant, Sistema Smart Technologies Limited, was involved in the provision of taxable services, specifically telecommunication services by the Telegraph Authority, as specified by the Finance Act of 1994. In regards to the assessee's failure to pay service tax on government dues on a reverse charge basis, an investigation was started.

The bench pointed out that the Supreme Court's AGR Judgment served as the foundation for the entire demand. Additionally, the telecom operators were obliged to pay the Additional License Fee in the aforementioned AGR Judgment. However, in the case of Association of Unified Service Providers of India & Others vs. Union of India , it was decided that telecom operators are not liable to pay additional amounts of license fee or spectrum charges to the DOT prior to the AGR Judgment of the Apex Court.

The two member bench consists of S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has held that the demand of service tax on addition license fee/spectrum charges in the case pertains to the period FY 2008-09 to 2013-14 which is also clear from the CA Certificate and during that period, service tax was not leviable on the license fee/spectrum charges and the same become chargeable to service tax w.e.f. 01.04.2016.

No Service Tax Payable on affiliation fees collected from Affiliated colleges: CESTAT

Principal Commissioner vs M/s. Makhanlal Chaturvedi 2025 TAXSCAN (CESTAT) 717

The revenue has challenged the Order-in-Appeal, setting aside the demand of service tax on affiliation fees charged from educational institutions/colleges. M/s. Makhanlal Chaturvedi National University of Journalism & Communication, the respondent, is a University established under the Madhya Pradesh Makhanlal Chaturvedi Rashtriya Patrakarita Avam Sanchar Vishwavidyalaya Adhiniyam, 1990. The university offers education in journalism, mass communication, public relations, and related fields through its own institution as well as through various affiliated colleges. The university grants affiliation to these colleges, and in return, it collects affiliation fees.

The Tribunal has relied on the decision of the Karnataka High Court in Rajiv Gandhi University of Health Sciences, Karnataka where it has been held that the act of University in granting affiliation to a private college has to be considered as a service in furtherance of providing education and the decision of the department to consider otherwise is erroneous. The view expressed by the Single Judge has been affirmed by the Division Bench of the High Court.

A two member bench of Binu Tamta, Member (Judicial) and Hemambika R. Priya, Member (Technical) found that the Commissioner (Appeals) after considering the provisions in the post negative era, analysed the nature of affiliation fees paid by the educational institutions to the appellant and also the nature of activity involved in the process of receiving affiliation fees, concluded that the same is not chargeable to service tax.

Royalty and Dead Rent Collected by State for Mining Rights Not Taxable as Services Under Finance Act: CESTAT

The Director vs Commissioner of Central GST 2025 TAXSCAN (CESTAT) 718

The appellant, the Directorate of Petroleum, Government of Rajasthan, was involved in issuing petroleum exploration and mining licenses. For the period from April 1, 2013, to March 31, 2016, the department received a service tax demand of Rs. 1,657.71 crore, which included interest and penalties. The demand was raised on the ground that royalty and dead rent collected from licensees were taxable under the category of “Renting of Immovable Property Services” and “Support Services” provided by the government to business entities.’

The two-member bench comprising Justice Dilip Gupta, President (Judicial Member), and P. V. Subba Rao, Technical Member (Central Excise), agreed with the appellant’s position. It observed that the royalty and dead rent collected by the State were part of the statutory framework and stemmed from sovereign powers under the Mines and Minerals (Development and Regulation) Act, 1957.

The tribunal explained that such collections could not be equated with renting land or providing support services. It also highlighted that the CBEC’s own circulars supported the appellant’s view and that the revenue had failed to conduct proper verification or issue summons before confirming such a massive demand.

CESTAT sets aside Excise Duty Demand based on Private Diaries and Loose Sheets

M/s. Akshaya Steel Works Pvt. Ltd. vs Commr. of Central Excise & Service Tax 2025 TAXSCAN (CESTAT) 719

The appellant manufactures Rolled products like Angles and Channels. They also undertake the job-work for other manufacturers like Tata Steel, SAIL and Adhunik Alloys Ltd, etc. For manufacture of their final product they use M.S. Ingots, M.S. Billets (Concast Billets) as their raw materials. They purchase M.S. Billets (Concast Billets) of 05 meters to 06 meters length weighing approximately 470 Kg per piece. They also purchase M.S.Ingots of size 1.2 meters to 1.4 meters length weighing approximately 102 kg per piece.

A two member bench R. Muralidhar, Member (Judicial) and Rajeev Tandon, Member (Technical) found that all the documentary evidence used for quantifying the demand was very much available with the Revenue latest by 2010. But still they have waited till 20.12.2012 to issue the Show Cause Notice. Nothing is coming up in the SCN was what kind of investigation and follow up verification was being undertaken by the Revenue during the intervening period.

Service Tax Not Payable on Delayed Payment Charges Recovered from Clients: CESTAT

M/S. SMC GLOBAL SECURITIES LIMITED vs ADDITIONAL DIRECTORATE GENERAL 2025 TAXSCAN (CESTAT) 720

SMC Global Securities Limited,appellant-assessee,acted as a stock broker facilitating trades between clients and stock exchanges. When clients failed to pay on time, the appellant settled the dues with the exchange and later recovered the amount from clients with 18% interest, termed as DPC.

The two member bench comprising Binu Tamta (Judicial Member) and Hemambika R.Priya (Technical Member) heard both sides and examined the records. The issue in question was whether service tax could be levied on DPC under the category of 'Stock Broker Services'.

The Authorised Representative agreed with the assessee’s counsel that this issue was already settled by several decisions of the tribunal, affirmed by the Supreme Court.

Gold Biscuit Smuggle Worth Rs. 31 Lakh: CESTAT Reduces Penalty Treating Assessee as Mere Carrier

Shri Nirbhay Kumar Upadhyay vs Commissioner of Customs (Preventive) 2025 TAXSCAN (CESTAT) 721

Shri Nirbhay Kumar Upadhyay,appellant-assessee,was intercepted by Customs officers at Imphal on 19.04.2019 based on specific intelligence. On search, six foreign-marked gold biscuits weighing 996 grams were recovered from his body cavity. He failed to produce any valid documents to prove legal ownership.

A single member bench comprising K.Anpazhakan (Technical Member) considered both sides and reviewed the records. It noted that the assessee was caught with six gold biscuits weighing 996 grams and valued at ₹31.34 lakh, hidden in his body. He admitted to carrying the gold and claimed he did so for a small amount due to financial hardship, acting only as a carrier and not as the owner.

The appellate tribunal observed that there was no evidence to show he was the actual beneficiary. Since he did not challenge the confiscation and only sought a reduction in penalty, the tribunal found it appropriate to take a lenient view.

Service Tax Not Payable on Equipment Supply Treated as Deemed Sale with VAT Already Paid: CESTAT

M/s. Mithun Samanta vs Commissioner of C.G.S.T. and Central Excise 2025 TAXSCAN (CESTAT) 722

Mithun Samanta,appellant-assessee,was engaged in supplying machines like JCB, Hydra, and Excavators to various clients. He transferred both possession and control of the machines and charged VAT, treating the activity as a ‘deemed sale’ under Article 366(29A) of the Constitution. As a result, he did not pay Service Tax.

A single member bench comprising K.Anpazhakan (Technical Member) noted that the assessee had supplied equipment like JCB, Hydra, and Excavator to clients, and the West Bengal State Tax Department had already treated this as a ‘deemed sale’ and collected VAT. It held that since VAT had been paid, no Service Tax was payable on the same activity.

Admitted Service Tax Liability Incorrectly Recorded as ₹6.06 Lakh Instead of ₹4.53 Lakh: CESTAT Remands Matter for Re-verification

M/s. Manaksia Limited vs Commissioner of C.G.S.T 2025 TAXSCAN (CESTAT) 723

Manaksia Limited ,appellant-assessee, pointed out an error in the Order-in-Appeal dated 26.10.2018 passed by the Commissioner (Appeals), CGST and Central Excise.The counsel stated that while the original order had confirmed a demand of ₹20.46 lakh and adjusted ₹4.53 lakh already paid, the appellate authority wrongly treated ₹6.06 lakh as admitted liability.

A single member bench of K.Anpazhakan (Technical Member) observed that the assessee had disputed the Service Tax calculation in the appellate order. It noted that the original order had accepted ₹4.53 lakh as admitted liability, but the appellate authority wrongly treated it as ₹6.06 lakh.

The appellate tribunal found this needed re-verification, set aside the order, and remanded the matter to the Commissioner (Appeals) to review the admitted amount after giving the assessee a fair hearing. The appeal was disposed of by remand.

CESTAT says Income Tax Data Alone Insufficient, Excludes Value of Goods from Taxable Service while quashing Service Tax Demand, Penalties

M/s S. I. Enterprises vs Commissioner of Central Excise & CGST 2025 TAXSCAN (CESTAT) 724

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, has held that income declared in income tax returns or reflected in TDS statements cannot, by itself, form the basis for levying service tax without proper investigation into the actual nature of the transaction. The Tribunal has set aside a service tax demand of ₹7,12,979 raised against M/s S.I. Enterprises, along with related penalties and late fees, on the grounds that the Department had erroneously treated the entire value declared in the income tax filings as consideration for taxable services.

Since there was no short payment of service tax, the Tribunal held that no penalty under Section 78 could be imposed, as the provision applies only in cases where tax has not been levied, paid, or has been short-paid. Likewise, the Tribunal found no justification for penalty under Section 77(2), as the order lacked any discussion or findings on the necessity of invoking this residual penalty clause.

In conclusion, the Tribunal allowed the appeal in full, set aside the Order-in-Appeal dated 31.01.2023, and quashed the service tax demand along with all associated penalties and late fees.

Concrete Pumps at Client’s Disposal Attract Supply of Tangible Goods, Not GTA: CESTAT

M/s. Namakkal South India Transports vs Commissioner of GST and Central Excise 2025 TAXSCAN (CESTAT) 725

The appellant, Namakkal South India Transports, had entered into contracts with companies like Lafarge to provide and operate high-capacity concrete pumps at various construction sites. These pumps, along with drivers, operators, and other support staff, were kept at the disposal of the client throughout the contract period. The department issued a show cause notice alleging that this arrangement fell under the taxable category of “Supply of Tangible Goods Service” and raised a demand for service tax under Section 65(105)(zzzzj) of the Finance Act, 1994.

The two-member bench comprisingAjayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that although the concrete pumps were operated and maintained by the appellant, they were kept entirely at the disposal of the client and used according to the client's instructions. The tribunal further observed that the contracts clearly distinguished these services from transportation and that the nature of the work did not fall under GTA services. The tribunal held that such an arrangement satisfied the conditions of Supply of Tangible Goods Service.

CESTAT Classifies RMC Transportation as GTA Service, Rejects Supply of Tangible Goods Tax Demand

M/s. Namakkal South India Transports vs Commissioner of GST and Central Excise 2025 TAXSCAN (CESTAT) 726

Namakkal South India Transports, the appellant, is a transportation company engaged in supplying RMC vehicles to clients such as Larsen & Toubro and Lafarge. The department alleged that these services involved the supply of tangible goods without transferring ownership and raised a demand of over Rs. 1.68 crore in service tax for the period from May 2008 to March 2012, along with interest and penalties. The department treated the activity as taxable under STGS and invoked the extended period of limitation to support the demand.

The two-member bench comprising Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao observed that the core purpose of the contracts was the transportation of RMC and not the supply of equipment. The vehicles remained under the operational control of the appellant, and the agreements did not transfer possession or effective control to the clients. The tribunal pointed out that the contracts clearly indicated that the service tax liability was on the consignors and that the appellants had issued consignment notes, even if not per consignment, which supported their claim under GTA.

Denial of CENVAT Credit for Lack of Documents on Input Services: CESTAT Remands Matter for Fresh Verification

M/s. GET & D India Pvt. Ltd. vs Commissioner of GST & Central Excise 2025 TAXSCAN (CESTAT) 727

GET & D India Pvt. Ltd.,appellant-assessee, had availed Cenvat credit between FY 2010–11 and 2012–13 on services like construction, rent-a-cab, gardening, canteen, guest house, golf club membership, and payment collection services. During the audit, the department found that these services did not qualify as 'input services' under Rule 2(l) of the Cenvat Credit Rules, 2004, and noted that supporting documents were not provided.

The two member bench comprising Ajayan T.V (Judicial Member) and Vasa Seshagiri Rao(Technical Member) heard both sides and reviewed the records and case law. Since both parties agreed that the matter needed fresh examination, the tribunal decided to remand the case to the AA.

It held that the assessee should be given a chance to submit the necessary documents to support its claim for Cenvat credit. The CESTAT set aside the disallowed credit, along with the related interest, penalty, and appropriation, without disturbing the credit already allowed.

Foreclosure Charges Not Taxable as Liquidated Damages Under Service Tax: CESTAT Allows Refund for Sundaram Finance

M/s.Sundaram Finance Ltd vs The Commissioner of GST & Central Excise 2025 TAXSCAN (CESTAT) 728

Sundaram Finance Ltd., appellant- assessee, was engaged in vehicle and property financing, along with services like software solutions, BPO, hire-purchase, and equipment leasing. When customers opted for loan pre-closure or foreclosure, they were charged additional fees as per the agreement.

In the present case, the department had treated the foreclosure charges as liquidated damages and denied the refund. However, the tribunal held that even if considered liquidated damages, such amounts were not taxable.

It referred to earlierM/s.Sundaram Finance Ltd vs The Commissioner of GST & Central Excise rulings, including the South Eastern Coalfields Ltd. and Neyveli Lignite Corporation Ltd. cases, which clarified that liquidated damages or penalties were not payments for any service and did not attract service tax.

Taxpayer’s Voluntary Confession Makes Cross-Examination Unnecessary: CESTAT Upholds Smuggled Foreign Origin Cigarettes Confiscation

HIRA SINGH,S/o RAMDHARI SINGH vs COMMISSIONER OF CUSTOMS 2025 TAXSCAN (CESTAT) 729

Hira Singh, the appellant, was the proprietor of Star Express Enterprises, a transport company operating from Delhi. Acting on specific intelligence, DRI officers intercepted a mini truck outside the appellant’s godown on 21.12.2018. The truck was officially carrying metal planters, but upon inspection, 21.6 lakh sticks of foreign-origin cigarettes were recovered from the truck, and another 3.41 lakh sticks from the godown premises. Foreign-origin cigarettes were also found at the appellant’s residence. No valid import or transport documents were produced for any of these goods.

A show cause notice was issued proposing confiscation and penalties. The adjudicating authority confirmed the proposals, confiscated the goods under Section 111(d) of the Customs Act, and imposed a penalty of Rs. 25,00,000 on the appellant under Section 112(b)(i). The Commissioner (Appeals) upheld the order. Aggrieved, the appellant approached the CESTAT.

The single-member bench comprising Binu Tamta (Judicial Member) held that the appellant’s confession was voluntary and could serve as the sole basis for confirming the charges. The tribunal ruled that cigarettes, being notified goods under Section 123, placed the burden of proof on the appellant, who failed to produce any import documents. It also upheld the valuation based on market inquiry. The tribunal found no merit in the appeal and dismissed it, upholding both the confiscation of goods and the penalty.

Customs Broker Not Liable for Verifying Importer's Document Correctness: CESTAT

M/s HIM Logistics Pvt. Ltd vs Commissioner of Central Excise & CGST 2025 TAXSCAN (CESTAT) 730

The case arose from a consignment imported by M/s Shiv Shakti Enterprises, wherein customs authorities found that the declared value of goods was lower than the previously accepted value for similar goods by the same importer. The customs broker, Him Logistics Pvt. Ltd., had filed bills of entry based on the documents provided by the importer, including invoices reflecting the transaction value. The importer later accepted that the goods had been undervalued and paid the differential duty, interest, and penalties.

The tribunal clarified that assessment under Section 14 of the Customs Act is based on the transaction value reflected in the importer’s invoices. Any suppression of value by the importer is a matter for customs investigation, not for brokers to detect. The tribunal also dismissed arguments about violations of the Customs Broker Licensing Regulations (CBLR), stating that any such contraventions should be addressed through proceedings under the CBLR, not via penalties under Section 112(a).

Setting aside the penalties, the tribunal concluded that the customs broker had acted in accordance with the law and could not be faulted for the importer’s mis-declaration.

Rectification Applications u/s 74 of Finance Act Can Extend Appeal Limitation Period If Disposed of Properly: CESTAT

The Executive Officer vs The Commissioner of GST & Central Excise 2025 TAXSCAN (CESTAT) 731

The Executive Officer, Tharamangalam Selection Grade Town Panchayat, the appellant, received an Order-in-Original on 09.09.2014 under the service tax provisions. Instead of filing an appeal immediately, the appellant filed a rectification application under Section 74 of the Finance Act, arguing that there was a risk of double taxation and that the application was within the two-year statutory period allowed for rectification.

The two-member bench comprising P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that the First Appellate Authority should have examined whether the rectification application was filed and disposed of under law before dismissing the appeal as time-barred. The tribunal observed that since the rectification application was lawfully disposed of, the date of the rectification order should be treated as the start date for calculating the appeal limitation period.

The tribunal clarified that the appellant could not re-agitate issues that were not raised in the rectification application when the appeal is heard again. The tribunal directed the Commissioner (Appeals) to hear the appeal on merits within 90 days, limited to the issues raised in the rectification application, while following principles of natural justice. The appellant’s appeal was allowed and remanded for disposal on the merits.

Land and Material Costs Must Be Excluded When Calculating Service Tax on Works Contracts: CESTAT

M/s Vishal Projects Ltd. vs Commissioner of Central Tax 2025 TAXSCAN (CESTAT) 732

Vishal Projects Ltd, the appellant, is a builder engaged in constructing residential and commercial projects in Hyderabad, including a project named Srinivasa Krupa. The department issued show cause notices demanding service tax under “Works Contract Service” on the total value of the agreements, including the cost of land and materials, for the period after July 2010.

The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) observed that while service tax is leviable on the service component of works contracts, the value of land and materials must be excluded while calculating the tax. The tribunal referred to the judgments of the Supreme Court and High Courts, which held that the central government could levy service tax only on the service portion of a works contract, not on the value of land and materials involved.

CESTAT quashes Service Tax Penalties, upholds Admitted Demands

M/s. Anand Motor Agencies Ltd. vs Commissioner, Central Excise & Service Tax 2025 TAXSCAN (CESTAT) 733

Anand Motor Agencies challenged the order before the Tribunal. Initially, in 2022, the Tribunal set aside the entire demand and penalties, citing procedural lapses and the principles of judicial discipline. However, the Revenue department successfully appealed to the Allahabad High Court, which remanded the matter to the Tribunal for fresh consideration, directing that the issues be examined in conjunction with related pending appeals.

In its order pronounced on January 10, 2025, the Tribunal modified its earlier decision, confirming the admitted service tax demands and ordering appropriation of the amounts already paid by the appellant. However, it quashed the penalties imposed under the Finance Act, 1994, recognizing that the tax dues had been paid prior to the issuance of the show cause notice. CESTAT emphasized that in such circumstances, penalties were not warranted.

Commissioner Excise (Appeals) could not condone Delay in filing Appeal beyond 30 days: CESTAT

M/s Style Digital Color Lab vs Commissioner of Central Excise & Service Tax 2025 TAXSCAN (CESTAT) 734

M/s Style Digital Color Lab, the appellant challenged the order-in-Appeal No.10/ST/Alld/2024 dated 08/01/2024 passed by Commissioner (Appeals) Central Excise & Service Tax, Allahabad.

A single bench of Sanjiv Srivastava, Member (Technical) considered the impugned order along with the submissions made in appeal and during the course of arguments. The issue involved in the present appeal is with respect of condonation of delay in filing the appeal by the Commissioner (Appeal).

The appeal has been filed as observed by the Commissioner (Appeal) after more than expiry of period of 90 days after the receipt of the order of original authority.

CESTAT Directs to decide Services Tax Appeal Filed with due Compliance of Pre Deposit

M/s Royal Construction and Mining Works vs Commissioner of Central Excise & CGST 2025 TAXSCAN (CESTAT) 735

Royal Construction and Mining Works, the appellant challenged the Order-in-Appeal passed by Commissioner (Appeals) Central Goods & Services Tax, Allahabad. By the impugned order Commissioner (Appeals) has rejected the appeal of the appellant by observing “ since the instant appeals have been filed on 25.05.2023, after 06.08.2014, 1.е., the date from which the amended Section 35F of the Act came into effect, without complying with the statutory requirement of predeposit, when the Commissioner (Appeals) had no jurisdiction to entertain or admit the appeals, I, therefore, find that this appeal is not maintainable in terms of Section 35F of the Act and in the light of the aforementioned judicial pronouncements.”

Further held that since the appeal has been quite old, the Commissioner (Appeal) is directed to decide the appeal on merits of the case by following the principles of natural justice within three months.

Sub-Contractors Liable to Pay Service Tax Even if Main Contractor Has Already Paid: CESTAT

M/s. United Fabricators and Technical Services Pvt Ltd. vs The Commissioner, Central Tax 2025 TAXSCAN (CESTAT) 736

United Fabricators and Technical Services Pvt Ltd, the appellant, was registered for “Erection, Commissioning or Installation Services” and was audited by the department for 2006–2011. The department found that the appellant was claiming abatement under Notification No. 1/2006-ST and paying service tax on 33% of the taxable value but had not properly shown this in its ST-3 returns. The department issued two show cause notices demanding a total of approximately Rs. 5 crore in service tax, interest, and penalties.

The two-member bench comprising Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that, as per the Larger Bench decision in the Melange Developers case, a subcontractor is liable to pay service tax even if the main contractor has discharged service tax liability. The tribunal further observed that the CENVAT credit mechanism ensures there is no double taxation, as the main contractor can claim credit for the tax paid by the sub-contractor.

Removal of PPCP to Moulders for Making Battery Parts Not Trading: CESTAT Rules Rule 6 Cenvat Credit Reversal Inapplicable

M/s. Exide Industries Limited vs Commissioner of GST and Central Excise 2025 TAXSCAN (CESTAT) 737

Exide Industries Ltd, the appellant, is a manufacturer of electric storage batteries, using PPCP as an input to produce battery containers and lids. Due to infrastructure constraints, the appellant cleared PPCP to moulders who converted it into containers and lids, which were then returned and used in battery manufacturing. Exide reversed the credit on PPCP under Rule 3(5) of CCR at the time of removal to moulders.

The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that PPCP was cleared to moulders for manufacturing battery parts exclusively for Exide and returned for further use, making it an integral part of the manufacturing process. It was further observed that prior orders, including one by the same adjudicating authority, had accepted PPCP as input under Rule 2(k) and its clearance under Rule 3(5) as valid.

Affiliation Fees Collected by Universities Not Taxable Under Service Tax, Rental Income Exempt if Within Threshold: CESTAT

Rajeev Gandhi Proudyogiki Vishwavidyalay vs The Principal Commissioner 2025 TAXSCAN (CESTAT) 738

Rajiv Gandhi Proudyogiki Vishwavidyalaya, the appellant, is a state university in Bhopal engaged in providing higher education. The department issued a showcause notice demanding service tax of Rs. 6,07,01,622 along with interest and penalties on amounts collected by the university as affiliation fees, inspection fees, no-objection fees from affiliated colleges, and a small portion of rental income from letting out premises to banks, post offices, canteens, and shops inside the campus.

The two-member bench comprising Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that the issue was already decided by the Karnataka High Court in the Rajiv Gandhi University of Health Sciences case, which held that affiliation granted by a university to colleges is part of its statutory duty, lacking commercial character and contractual consideration, and not a taxable service under service tax law. The tribunal further observed that the Supreme Court dismissed the revenue’s appeal against this judgment, confirming its correctness.

Security services qualify as input service u/r 2(l) of CCR, as service utilized for manufacture of dutiable final products: CESTAT

M/s Grasim Industries Limited vs Commissioner, CGST 2025 TAXSCAN (CESTAT) 739

Grasim Industries Limited (earlier known as Aditya Birla Chemical (India) Ltd.) has filed the appeal against Order passed by the Commissioner (Appeals), CGST, Allahabad. The Appellant is engaged in the manufacture of Caustic Soda lay & Products, CP, HM HDPE, Metal Container and Fly Ash Bricks falling under Chapter Heading 28, 29, 39, 68 and 73 of the Central Excise Tariff Act, 1985 and was availing Cenvat credit on inputs, capital goods and input services under provisions of the Credit Rules.

A single bench of Mr. P.K. Choudhary, Member (Judicial) observed that the residential colony/township is located at a remote place, where no municipal services are available. Further, it is an admitted fact that an industrial township is set up by the Appellant/Assessee so that trained manpower is available to run their plant for production of dutiable output.

Industrial gases in VITT transported by carrier agency upon issue of Consignment Note qualify as GTA service and not renting and leasing: CESTAT

M/s. Reehal Roadlines vs Commissioner of CGST & Central Excise 2025 TAXSCAN (CESTAT) 740

A two member bench of Dr. Suvendu Kumar Pati, Member (Judicial) and Anil G. Shakkarwar, Member (Technical) viewed that nature of service can easily be identified from the terms of agreement executed between the Appellant and its customer M/s. INOXAP. Invariably throughout the agreement, reference is made to provisions for transportation of goods on payment with different conditions but nowhere there is any reference to any fixed collection of lease-rental by the Appellant from its customer M/s INOXAP.

Further, invoice and Consignment note being two separate kinds of documents, there is no requirement that full description including address, lorry numbers etc. should be available in the invoice, when content of Consignment note is itself referred in the statute.

Demand of Service Tax cannot be Solely based on Income Tax Data in Form 26AS: CESTAT Quashes Demand

M/s Shree Ganesh Telecom Pvt. Ltd vs Commissioner (Appeals) 2025 TAXSCAN (CESTAT) 741

M/s Shree Ganesh Telecom Pvt. Ltd., the petitioner, challenged the Order-in-Appeal. The appellant is engaged in providing Erection, Commissioning and Installation Service and Maintenance or Repair Service to various telephone service providers. During the course of audit of the appellant record for the period from April 2016 to March 2017 the difference in the taxable value shown in ST-3 returns from the income booked in the statutory record like balance sheet vis-à-vis job work receipt for the said period was observed by the department and the appellant was found to have not paid service tax on the amount of the said difference.

The two member bench of Dr. Rachna Gupta (Judicial Member) found that the only document based whereupon the demand has been confirmed is from 26AS from Income Tax Department. But the law is settled that Revenue cannot raise the demand on the basis of difference in the figures reflected in the ST3 returns and those reflected in Form 26AS without examining the reasons for said difference and without establishing that the entire amount received by the appellant as reflected in the Form 26AS is the consideration for services provided and without examining whether the difference was because of any exemption or abatement.

Declaration of Value of Goods Cannot be Treated as Suppression Merely Being Incorrect: CESTAT quashes Penalty under Customs Act

M/s Goldstar Glasswares Pvt. Ltd. vs Principal Commissioner of Customs 2025 TAXSCAN (CESTAT) 742

Goldstar Glasswares Pvt. Ltd., the appellant challenged the part of the order passed by the Principal Commissioner of Customs, ICD, TKD, New Delhi that rejects the assessable value of goods declared by the appellant under rule 12 of the Customs Valuation (Determination of the Value of Imported Goods) Rules 2007 and re-determines the same under rule 5 of the Valuation Rules read with section 14 of the Customs Act, 19624.

The two member bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that merely because the value declared by the appellant has not been found to be correct, it cannot be said that the appellant had suppressed material facts from the department. It cannot, therefore, be alleged that the appellant had suppressed the value of the goods, much less suppressed it with an intention to evade payment of customs duty.

The Tribunal held that the penalty had been imposed upon Arjinder Singh Gulati for making incorrect declaration of value of the goods in import clearance.

CENVAT Credit Cannot Be Denied If Service Tax Is Paid and Accepted: CESTAT Remands All Nippon Airways’s Case for Verification

M/s. All Nippon Airways Co Ltd. vs Commissioner Service Tax-IV 2025 TAXSCAN (CESTAT) 743

The appellant, a Japanese airline operating passenger flights between India and Japan, was issued multiple show cause notices between 2013 and 2017. These notices proposed the denial of CENVAT credit availed on service tax paid on input services associated with Passenger Service Fee (PSF), Development Fee (DF), and User Development Fee (UDF), collected from passengers.

The Tribunal, comprising Suvendu Kumar Pati (Judicial Member) and Anil G. Shakkarwar (Technical Member), held that even if an activity does not amount to the provision of service, CENVAT credit on input services cannot be denied if service tax paid on the activity is accepted by the Revenue.

However, the Tribunal observed that the records before it did not contain sufficient details to verify whether the service tax paid by the airline during the relevant period was equal to or more than the CENVAT credit claimed. Accordingly, the matter was remanded to the original adjudicating authority with directions to verify the tax payment details and decide the matter afresh.

CESTAT Quashes Provisional Release Order of Seized Goods based on Furnishing Bank Guarantee as Circular not require furnishing same for Star Export Houses

M/s B P Wire Industry vs Commissioner, Customs (Preventive), Lucknow 2025 TAXSCAN (CESTAT) 744

M/s B.P. Wire Industry, the appellant challenged the Provisional Release Order passed by the Commissioner, Customs (Preventive), Commissionerate Lucknow. On the grounds, interalia, the Commissioner has vide his order for provisional release of the seized goods i.e imported Betel Nuts and Betel Nuts Power to be exported has imposed a condition of furnishing Bank Guarantee.

A single bench of P.K. Choudhary, Member (Judicial) found that these two provisions operate into two different fields inasmuch as Section 110 mandates seizure of the goods for the reason that the goods are liable for confiscation. Section 110A mandates provisional release of the seized goods pending adjudication.

Penalty on Co noticee is invalid when main case is settled under SVLDRS: CESTAT

SHRI RAJENDRA PYARELAL AGRAWAL vs COMMISSIONER CENTRAL GST & CENTRAL EXCISE 2025 TAXSCAN (CESTAT) 745

The appellants, Shri Rajendra Pyarelal Agrawal,Bhagyalaxmi Steel Industries challenged the impugned Order-in-Appeal passed by the learned Principal Commissioner (Appeals) Rajkot dated 14th February, 2019 through which the learned Principal Commissioner upheld the Order-in-Original passed by the Assistant Commissioner Central Goods and Service Tax Division Bhavnagar dated 22nd December, 2017 and rejected the appeals.

A single bench of Dr. Ajaya Krishna Vishvesha, Member ( Judicial ) viewed that when appeal of the main appellant – Bhagyalaxmi Steel Industries has been allowed and the order regarding demand of Central Excise Duty and penalty imposed by the lower Adjudicating Authority and the Commissioner have been set aside, it appears just and proper that penalty imposed on co-noticee Shri Rajendra P. Agrawal should also be set aside.

The appeal filed was allowed and the impugned order passed by the Principal Commissioner (Appeals) passed by the first Adjudicating Authority are set aside.

CESTAT Allows Customs Duty Exemption on HIV Test Kits Which Qualify as Life-Saving Diagnostic Kits

M/s Cepheid India Private Limited vs The Principal Commissioner of Customs 2025 TAXSCAN (CESTAT) 746

The assessee, Cepheid India Private Limited, is a member of the California-based Cepheid Group, a corporation. Its primary activity is trading test cartridges, re-agents, and molecular diagnostic testing equipment, which are used for disease diagnosis and sampling.

The bench noted that these kits are used for routine monitoring of the spread of HIV infection in the body since they are more sensitive and accurate than other methods of detecting the existence of HIV infection. Therefore, these kits are necessary for determining the HIV treatment plan and combating the HIV epidemic, which is the only reason for granting exemptions for life-saving medications and HIV diagnostic kits.

CESTAT Holds Reimbursed Diesel Expenses on Actuals Non-Taxable Under Service Tax, Reduces Penalty to 25%

M/s TICS Project Consultancy Pvt. Ltd vs Commissioner of Central Excise and Service Tax 2025 TAXSCAN (CESTAT) 747

The appellant, TICS Projects Consultancy Pvt Ltd, is engaged in the provision of Consulting Engineering Services and had not discharged its applicable tax for the period of 1 April 2009 to 31 March 2010.

The bench comprising S. S. Garg (Member Judicial) and P. Anjani Kumar (Member Technical) found from the agreement that no advance for diesel or consumables was to be paid to the service provider. Bills for the same would be reimbursed on actual basis within 72 hours subject to verification and approval by the head of the Network O&M Department. Therefore, the cost of the same could not be included in the assessable value for payment of service tax.

In view of the facts the tribunal partly allowed the appeal, restricting the penalty under Section 78 to 25% of the amount specified in the order. The bench noted the appellants had already deposited duty and interest along with 25% of the penalty as per the earlier Miscellaneous Order.

FOB Value Agreed Between Buyer and Seller Cannot Be Changed by Customs Authorities: CESTAT

M/S JAYANTAH TRADING CO vs COMMISSIONER OF CUSTOMS(APPEALS) 2025 TAXSCAN (CESTAT) 748

Jayantah Trading Co., the appellant, is an exporter of readymade garments. The Directorate of Revenue Intelligence investigated the appellant on suspicion of exporting substandard garments and overvaluing them to claim excess duty drawback and export incentives.

The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that Customs authorities can re-determine assessable value for the purpose of duty calculation under the Customs Valuation Rules and Section 14 but they do not have the power to alter the transaction value agreed between the buyer and the seller.

The tribunal explained that the transaction value remains valid for calculating duty drawback and export incentives, and Customs officers cannot substitute it with a value determined by them. The tribunal held that since Jayantah Trading Co. had received full remittance at the declared FOB value, the re-determination of the FOB value and the subsequent penalties and adjustments were unsustainable.

Relief to Hindustan Petroleum: CESTAT Holds Modernization Services within Refinery are 'Input Service’ and Eligible for CENVAT Credit

Hindustan Petroleum Corporation Ltd. vs Commissioner of CGST & Central Excise 2025 TAXSCAN (CESTAT) 749

Hindustan Petroleum Corporation Limited is a leading petroleum products manufacturer in India. HPCL carried out various modernization, renovation, and repair work at its refinery located in Mumbai. HPCL availed services from contractors such as M/s Linde Engineering, M/s Thermax Ltd., and M/s Thermax Babcock & Wilcox. related to modernization services.

The Tribunal, comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member), examined a press bulletin issued by the Ministry of Petroleum and Natural Gas. The press bulletin mentioned various refinery modernization initiatives undertaken by Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., and HPCL.

Setback for Vedanta: CESTAT Denies Interest on Customs Refund, Says Claims Were Settled Within Statutory Timeframe

Vedanta Limited vs Commissioner of Customs (Import) 2025 TAXSCAN (CESTAT) 750

Vedanta Limited,appellant-assessee, had filed 67 refund claims between August and November 2013, seeking Rs. 7.61 crore as excess duty paid after finalization of provisional assessments. The adjudicating authority issued individual orders confirming the refund amount and eligibility.

The tribunal relied on the Karnataka High Court’s decision in Commissioner of Customs, Mangaluru vs. JSW Steel Ltd. [2022 (379) ELT 451 (Kar.)], which was later upheld by the Supreme Court. The High Court had held that interest was not payable if the refund was granted within three months from the date of submission of all requisite documents, even if the original claim was filed earlier.

Applying the same principle, the CESTAT found that the assessee’s delay in furnishing complete documents had caused the initial deficiency. Since the refund was sanctioned within three months from the date of final reply, no interest was payable.

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