Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 15)

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

Customs Appellate Authority Dismissed Appeal citing Delay: CESTAT Sets aside order finding Timely submission u/s 128 of Customs Act

Susanta Kumar Sahoo vs Commissioner of Customs (Preventive) 2025 TAXSCAN (CESTAT) 801

Susanta Kumar Sahoo, the appellant assessee has filed the appeal against the Order-in-Appeal No. KOL/CUS(CCP)/AKR/853/2020 dated 08.12.2020 wherein the Commissioner of Customs (Appeals) has dismissed the appeal filed before him by the appellant herein on the ground that the appellant had filed the said appeal after the expiry of 60 days in violation of Section 128 of the Customs Act, 1962; the appellant had not filed any request for condonation of the delay. The appeal thus has been rejected on the grounds of time-bar by the Commissioner (Appeals).

The bench set aside the impugned order and remanded the matter to the Commissioner (Appeals), for deciding the issue on merits. The appellate authority is directed to follow the principles of natural justice and arrive at a decision within a period of three months from the date of receipt of this Order.

Delay Mistakenly Counted as 31 Days Instead of 30: CESTAT Condones Delay and Remands to Commissioner (Appeals)

M/s Nav Bharat Fertilizers Ltd vs Principal Commissioner of CGST 2025 TAXSCAN (CESTAT) 803

Nav Bharat Fertilizers Ltd, appellant-assessee, submitted through counsel that the appeals were filed before the Commissioner (Appeals) within the condonable period of limitation. The adjudication order was received on 05.04.2017, and in terms of Section 9 of the General Clauses Act, 1987, the limitation period commenced from 06.04.2017. This principle was supported by the Supreme Court’s ruling in Tarun Prasad Chatterjee vs. Dinanath Sharma [2000 (8) SCC 649].

A single member bench of P.K Choudhary (Judicial Member) heard both sides and reviewed the records.It noted that the Commissioner (Appeals) had dismissed the appeals on limitation without deciding them on merits. The Order-in-Original was received by the appellant on 05.04.2017, so the 60-day period for filing the appeal ended on 05.06.2017. The appeals were filed on 05.07.2017, falling within the 30-day condonable delay period.

However, the Commissioner (Appeals) wrongly calculated a 31-day delay and refused to condone it. The tribunal found this to be an error, condoned the delay, and remanded the matter back to the Commissioner (Appeals) for a decision on merits.

Relief for Hindustan Unilever: CESTAT Allows CENVAT Credit on Job Work Related Services Based on Earlier Rulings

Hindustan Unilever Ltd vs Commissioner of GST & CentralExcise 2025 TAXSCAN (CESTAT) 804

Hindustan Unilever Ltd.,appellant-assessee, was engaged in manufacturing cosmetics under Chapters 33 and 27 of the CETA, 1985. During verification of ER-1 returns for December 2012 to June 2013, it was found that the company had availed CENVAT credit on services like godown rent, maintenance, loading/unloading, diesel for genset, DG hire charges, and electricity.

A single member bench of M.Ajit Kumar (Technical Member) reviewed the appeal and relevant documents and noted that the issue had already been decided in the assessee’s favour in earlier cases. It observed that the disputed services such as godown rent, diesel, DG hire, electricity, and loading/unloading were used by job workers for job work activities.

CESTAT Sets Aside Ex Parte Rejection of Compounding Plea, Directs Fresh Hearing Post Duty Adjudication

Dipakkumar Dharamsinbhai Kakadiya vs Chief Commissioner ofCustoms 2025 TAXSCAN (CESTAT) 805

In this case, the bench noted that the application filed by Dipakkumar Dharamsinbhai Kakadiya and others was dismissed by the Chief Commissioner of Customs, Nhava Sheva, without affording a hearing, and held it to be a clear violation of the principles of natural justice.

The Tribunal observed that the Chief Commissioner failed to comply with the procedural safeguards under Rule 4 of the Customs (Compounding of Offences) Rules, 2005, as the latter neither called for a report from the investigating authority nor provided the applicants with an opportunity to be heard, as required under the rules.

CESTAT Remands Refund Claim for Fresh Adjudication Over Violation of Natural Justice; & Sets Aside Ex-Parte Order

Shayona Pulp Conversion Mills Pvt. Ltd vs Commissioner of CGST,Central Excise 2025 TAXSCAN (CESTAT) 806

In this case, the assessee, Shayona Pulp Conversion Mills Pvt. Ltd., appealed against the order passed by the Commissioner (Appeals), GST & Central Excise, Nashik.

The tribunal observed that while the authorities claimed to have issued a hearing notice with three dates, March 26, 27, and 28, 2019, they insisted they never received any such notice. The company even wrote to the adjudicating authority in May 2019, asking for proof of delivery, but no evidence was provided.

The bench further observed that ‘Justice need not only be done but must also be seen to be done.’ The tribunal noted that neither the adjudicating authority nor the Commissioner (Appeals) could produce any record showing when or how the notice was sent to the company. With no proof of delivery, the tribunal concluded that the appellant had been denied a fair chance to defend its claim.

CESTAT Quashes Service Tax Demands on Vocational Training Services, Rules Activities Exempt and Barred by Limitation

M/s. M.M. Group vs Commissioner of C.G.S.T. and Central Excise 2025 TAXSCAN (CESTAT) 807

The assessee, M/s. M.M. Group, a Malda-based vocational training provider, had appealed before the CESTAT for relief for the demands imposed on the company for the financial years 2014–15 to 2017–18.

The tribunal observed that the appellant’s activities qualified for exemption under Notification 25/2012-ST, which covers training partners approved by the National Skill Development Corporation (NSDC) or Sector Skill Councils (SSCs).

The bench relied on the Hyderabad CESTAT ruling in SRK Innovatives School of Information Pvt. Ltd. v. Pr. Commissioner of Central Tax, Visakhapatnam, GST [2025 (5) TMI 262 – CESTAT Hyderabad], where similar skill development programs were held exempt despite lacking formal NSDC certification.

Relief for Hindustan Petroleum: CESTAT Rules Intermixing of Petroleum Products in Pipelines Is Not Manufacture, No Higher Duty Payable

Hindustan Petroleum Corporation Ltd vs Commissioner of CGST& Central Excise 2025 TAXSCAN (CESTAT) 808

Hindustan Petroleum Corporation Ltd. (HPCL), the appellant, operates a refinery at Mahul, Mumbai, and transports petroleum products such as MS, HSD, and Superior Kerosene Oil (SKO) through pipelines to various depots.

The two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) observed that SKO, MS, and HSD are separately classified under Chapter 27 of the Central Excise Tariff Act and have distinct technical standards. The tribunal found no evidence to show that the intermixed SKO met the required specifications to be reclassified as MS or HSD. It further observed that excise duty is levied at the time of removal from the factory, and HPCL had correctly paid duty based on the classification at that stage.

Setback for HCL Technologies: CESTAT Denies CENVAT Credit Refund on Gym, Yoga, Laundry, and Guest House Services

M/s HCL Technologies Limited vs Commissioner 2025 TAXSCAN (CESTAT) 809

HCL Technologies, an exporter of IT and business support services, had filed refund claims under Rule 5 of the CENVAT Credit Rules, 2004 for the quarters October to December 2015 and January to March 2016.

The tribunal found that services like GYM use, yoga sessions, laundry, and guest house arrangements were primarily for employee comfort and personal benefit, and not necessary for providing export services. The tribunal held that credit for such services was inadmissible as these did not contribute directly to service delivery.

The tribunal upheld the denial of refund on these specific services, ruling that CENVAT credit is not available for activities considered personal, even if they are part of a broader workplace environment. The appeal was partly allowed, with this portion of the claim rejected.

Relief for Hindustan Zinc: CESTAT Rules Liquidated Damages and Penalties for Contract Breach Not Taxable as Service

M/s. Hindustan Zinc Ltd. vs Commr. of CGST & Central Excise 2025 TAXSCAN (CESTAT) 810

Hindustan Zinc Limited, the appellant, is engaged in the manufacture of zinc, cadmium, and sulphuric acid and is registered for various services under service tax. During an audit, the department found that the appellant had collected amounts from contractors under the heads of liquidated damages, forfeiture of earnest money, and penalties for non-performance or delays in fulfilling contractual obligations.

The two-member bench comprising Rajeev Tandon (Technical Member) and Binu Tamta (Judicial Member) agreed with the appellant’s arguments. The tribunal explained that to fall within the scope of Section 66E(e), there must be a clear agreement to tolerate an act for a defined consideration.

The tribunal held that penalties and damages imposed for breach of contract do not amount to consideration for a service, and there was no quid pro quo. They also referred to CBIC Circular No. 214/1/2023-ST, which clarified that such payments are compensatory and not taxable.

Finalized Customs Assessments Cannot Be Reopened for Refund Claims: CESTAT

M/s Diamond Mink Blankets Ltd vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 811

Diamond Mink Blankets Ltd., the appellant, filed a Bill of Entry dated June 11, 2018, which was provisionally assessed. The final assessment was completed by order-in-original dated July 1, 2013. The appellant did not challenge the assessment order, allowing it to attain finality.

The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that the assessment of the Bill of Entry had attained finality and that refund proceedings cannot be used to bypass the appeal mechanism provided under law.

The tribunal clarified that refund claims are not a substitute for an appeal or review of an assessment order. Since the appellant had not disputed the assessment through statutory appeal, the duty was correctly collected as per the final assessment.

No Service Tax on Export Cargo Handling, Unaccompanied Baggage, and Abandoned Cargo: CESTAT

M/s. Joint Working Group vs The Commissioner of Service Tax 2025 TAXSCAN (CESTAT) 812

The appellant Joint Working Group (HAL, CONCOR & MSIL) is a provider of various services under the categories of Airport Service, Cargo Handling Service, Storage and Warehousing Service.

The Bench comprising Dr. D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) held authorities in the impugned orders blindly confirmed the demands, ignoring the exclusions in law and circulars that clearly state that services related to export cargo and unaccompanied baggage are outside the purview of service tax.

Accordingly, the impugned orders were set aside, and both appeals were allowed.

Provisions of IPC not directly applicable to Customs Act: CESTAT Drops Penalty imposed u/s 112(a) of Customs Act in absence of intention to evade tax

M/s. Meticulous Forwarders vs Commissioner of customs 2025 TAXSCAN (CESTAT) 813

Meticulous Forwarders, Masterstroke Freight Forwarders Pvt. Ltd, the assessee appellants are CHAs who were involved in the clearance of raw silk yarn valued at Rs.3,36,10,6140/- imported by M/s. Kalp Impex allegedly by misusing the Advance Authorisation Scheme, in February 2009. The appellants were alleged to have aided and abetted in the clearance of the imported goods which were cleared duty-free, into the local market.

A two member bench of M. Ajit Kumar, Member (Technical) and Ajayan T.V., Member (Judicial) observed that the act or stake was not just a violation of his obligation as a CB but was done with knowledge of the illegality. The evidence in this regard can be both / either, direct or circumstantial so long as common intent is discernable.

Services rendered by FASPL to Foreign Companies classifiable under BSS, Tax Not leviable as it is Export of Service: CESTAT

M/s. Fifth Avenue Sourcing Pvt. Ltd vs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 814

Fifth Avenue Sourcing Pvt. Ltd. (FASPL) , the assessee appellant, rendered services to foreign companies for evaluation of prospective garment manufacturers, processing purchase orders, customer management, tracking of delivery schedules, operational assistance for marketing, customer service, pricing policies, managing distribution, logistics, etc. They also rendered services to domestic vendors by procuring orders for them from foreign companies, rendered operational assistance in execution of purchase orders and ensured receipt of sale proceeds from foreign buyers.

A two member bench of M. Ajit Kumar, Member (Technical) and Ajayan T.V., Member (Judicial) observed that “the services rendered by FASPL to foreign companies are classifiable under the category of Business Support Service and these services rendered to foreign based clients for which consideration is received in convertible foreign exchange, no tax liability will arise considering the same as export of service.”

The Tribunal set aside the impugned orders and the Statement of Demand and allowed the appeals with consequential relief, if any, as per law.

CESTAT dismisses Mittal Corp’s appeal despite CIRP Proceedings, upholds Excise Duty and Penalty for Clandestine Removal of Goods

M/s Mittal Corp. Limited vs Principal Commissioner 2025 TAXSCAN (CESTAT) 815

The case arose from the investigations carried out by Central Excise officers conducted searches at the appellant’s factory. The records were seized under a panchnama, and physical stock verification revealed excess goods compared to those recorded in the statutory production register.

The Bench comprising Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) held that “Clandestine removal, by its very nature, is secretive. It can be established through indirect evidence. The appellant neither disowns the records nor explains the discrepancies. The statements by its staff were never retracted.”

The Tribunal held that the evidence from private records and consumption logs indicated suppression of production and confirmed clandestine clearance of excisable goods. The tribunal noted that Section 11A(4) was held to be rightly invoked due to suppression of facts, and the interest and penalty provisions under Sections 11AA and 11AC were applicable.

Denial of CENVAT Credit for Non-Manufacture Activity: CESTAT Sets Aside Order as Duty Was Paid on All Goods

Sai Swaroop Enterprises Pvt Ltd vs Commissioner of CentralExcise 2025 TAXSCAN (CESTAT) 816

Sai Swaroop Enterprises Pvt Ltd, appellant-assessee, had repacked and labelled goods for a principal manufacturer and paid duty on the finished products. It also claimed CENVAT credit on input goods used for this activity.

The two member bench comprising Ajay Sharma (Judicial Member) and C J Mathew (Technical Member) noted that the assessee was engaged in manufacturing both dutiable and non-dutiable goods and had paid central excise duty based on deeming provisions under the Customs Tariff Act, 1975. It observed that there was no dispute regarding the payment of duty on all final products.

The appellate tribunal found that denial of CENVAT credit on the ground that the goods were exempt, despite duty having been paid, was contrary to settled law.

Relief for SAIL: CESTAT Holds By-Products Not Liable Under Rule 6 of CCR, Accepts Proportionate Reversal

M/s. Steel Authority of India Ltd. vs Commissioner of CGST &CX 2025 TAXSCAN (CESTAT) 817

Steel Authority of India Ltd,appellant-assessee,was engaged in manufacturing iron and steel products under Chapters 72 and 73 of the Central Excise Tariff. In the process, some exempted by-products like Ammonium Sulphate, Coal Tar, Burnt Dolomite, and Molten Slag also emerged.

The two member bench comprising R.Muralidhar ( Judicial Member) and Rajeev Tandon (Technical Member) heard both sides and examined the appeal papers and submissions. The dispute related to reversal of CENVAT credit on common inputs and input services used in manufacturing both dutiable and exempted goods. The issue of demanding 5%/6%/8% of the value of exempted goods had remained contentious for years.

Referring to the Allahabad High Court ruling in Hello Minerals Water Pvt. Ltd., the tribunal noted that reversal of Modvat credit amounted to non-availment of credit. Several courts and tribunals had followed this view. Considering the heavy demands raised on manufacturers, the government brought a retrospective amendment in 2010 allowing proportionate credit reversal with interest.

Work Involving Unloading and Marking for SAIL Treated as Cargo Handling: CESTAT Limits Demand to Normal Period, Sets Aside Penalties

M/s. A.S. Transport vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 818

A.S. Transport,appellant-assessee, had carried out unloading, hand shunting, painting, and marking work for SAIL). The department treated this as cargo handling service and issued a show-cause notice for non-payment of service tax. The demand was confirmed with penalties, citing suppression. The assessee challenged this order in appeal.

The two member bench comprising P.A. Augustian (Judicial Member) and R.Bhagya Devi ( Technical Member) heard both sides and noted that the issue in the appeal was whether the appellant’s activities unloading, hand shunting, painting, and marking for identification for SAIL fell under the category of cargo handling service as defined under Section 65(23) of the Finance Act, 1994. Since these activities matched the scope of the definition, the tribunal held that service tax was payable.

However, it also observed that the appellant had carried out the work for SAIL under a bona fide belief that the services were not taxable. There was no evidence on record to show any intention to evade tax, and therefore, the charge of suppression was not sustainable.

CESTAT Lacks Jurisdiction in Gold Smuggling Case Involving Passenger Baggage

Deep Rastogi vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 819

Deep Rastogi, the appellant, along with Alok Katta and Upendra Agarwal, challenged the penalty imposed on them under Section 112(b) of the Customs Act. The penalties were imposed following an incident where one Prashant Pandey was intercepted by DRI officers after passing through the green channel at the IGI Airport on 17.06.2018. He was found carrying 667 grams of gold concealed in his baggage.

The single-member bench comprising Ashok Jindal (Judicial Member) observed that the seizure and penalty arose from a case of passenger baggage, as the gold was found in the baggage of a passenger arriving from abroad.

The tribunal held that in such circumstances, the appeal against the Commissioner (Appeals)’s order does not lie before the Tribunal. The appeals were dismissed as non-maintainable with liberty granted to the appellants to seek remedy before the appropriate forum. The appeal was dismissed for want of jurisdiction.

Cement Acted Only as Binder, Not Primary Base: CESTAT rules Sand Lime Bricks Cannot Be Classified as Cement Bricks

M/s. Renaatus Procon (P) Ltd. vs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 820

Renaatus Procon (P) Ltd., the appellant, manufactured autoclaved aerated bricks and classified them under sub-heading 6810 11 90 of the Central Excise Tariff Act as sand lime bricks, availing exemption from duty. The department issued show cause notices for the periods April 2013 to May 2014 and June 2014 to March 2015, alleging that the bricks were actually "cement bricks" classifiable under sub-heading 6810 11 10, and denied the benefit of the exemption notification.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) observed that the essential ingredients of the product were sand and lime, and cement was used only in small quantities as an additive. The tribunal also observed that the product met the HSN explanatory note for sand lime articles and was manufactured using the SLB process, including high-pressure autoclaving.

The tribunal further observed that the department failed to provide expert reports or sufficient evidence to justify reclassification. It rejected the reliance on competitor statements and noted that modern machinery used for SLB and AAC bricks could be common.

CESTAT Allows Refund of Amounts Paid Under Mistake, Even Beyond One-Year Limitation Period

M/s U.P. Purva Sainik Kalyan Nigam Ltd vs Commissioner ofCustoms & CGST, Meerut 2025 TAXSCAN (CESTAT) 821

U.P. Purva Sainik Kalyan Nigam Ltd., the appellant, is a government undertaking engaged in manpower supply services. During the first quarter of the 2017–18 financial year, the appellant mistakenly deposited Rs. 20,00,000 twice on the same day due to a clerical error.

The bench led by Judicial Member P.K. Choudhary observed that the excess amount was paid by mistake and not as tax liability, and such deposits are not governed by the limitation under Section 11B of the Central Excise Act. The tribunal explained that Section 11B only applies to tax refunds and not to mistaken or voluntary deposits.

The tribunal further observed that a mistaken payment with no underlying tax liability does not require appeal of any assessment, and refund denial solely on limitation grounds would be unjust. The appeal was allowed, and the refund claim directed to be processed.

MoU proves Taxpayer’s Active Role in Managing EOU: CESTAT upholds Penalty for Clandestine Removal of Goods

SURENDRA B VERMA vs COMMISSIONER OF CGST & CENTRAL EXCISE 2025 TAXSCAN (CESTAT) 822

Surendra B. Verma, the appellant, was penalized under Rule 26 of the Central Excise Rules, 2002, for his role in managing Karnavati Garments and Mattresses, a 100% EOU located in Umbergaon. The unit was found to have clandestinely removed finished goods without payment of duty and diverted them into the domestic market.

The single-member bench comprising Dr. Ajaya Krishna Vishvesha (Judicial Member) observed that the MoU, though submitted later, clearly showed the business understanding and shared profits between the appellant and his associates. The appellant's own statements confirmed that he and Shyamlal Bihani operated the business while the named proprietor was only for show.

The tribunal further observed that the penalty under Rule 26 was justified, as the appellant had knowingly participated in the evasion of central excise duty by diverting goods into the domestic market and fabricating export documents.

Cash Vans Provided with Drivers fall under 'Supply of Tangible Goods Service', not Deemed Sale/Transportation: CESTAT

Shree Security vs C.S.T. 2025 TAXSCAN (CESTAT) 823

Shree Security, the appellant, was engaged in providing cash vans along with drivers to various banks for transporting cash between branches. The banks paid a monthly fee based on kilometers traveled. The appellant considered this service to be non-taxable as it involved cash transportation.

The two-member bench comprising Somesh Arora (Judicial Member) and Satendra Vikram Singh (Technical Member) observed that the appellant retained ownership and control of the vans, provided alternate vehicles when required, paid drivers’ wages, and handled all maintenance and risks. The arrangement was not a transfer of right to use but a service provided for consideration.

The tribunal further observed that no VAT was paid on the activity, which contradicted the appellant’s claim of it being a deemed sale. The tribunal held that the extended period of limitation was rightly invoked as the appellant failed to disclose their activities or register on time.

S. 35C(1A) of Central Excise Act Limits Adjournments to Three: CESTAT dismisses Appeal for Non-Prosecution

M/s Alcons Infratech vs Commissioner of Central Excise &Service Tax 2025 TAXSCAN (CESTAT) 824

Alcons Infratech, the appellant, filed an appeal against the order passed by the Commissioner (Appeals), but failed to appear during multiple hearings. Despite being given over twenty hearing dates since 2018, including 26.11.2018, 20.02.2020, 13.09.2023, and 07.01.2025, the appellant repeatedly sought adjournments or failed to appear altogether.

The bench, comprising Sanjiv Srivastava (Technical Member) and Angad Prasad (Judicial Member) observed that the appellant failed to show any interest in pursuing the appeal, and the delay was not justified.

The tribunal explained that the tribunal cannot allow proceedings to be delayed indefinitely and cited the Supreme Court’s strong disapproval of repeated adjournments in the case of Ishwar Lal Mali Rathod.

CESTAT Sets Aside Penalty for Non-Membership as Customs Broker Obtained Association Membership Before SCN Was Served

M. Prabhakarkini vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 825

Prabhakarkini,appellant-assessee, was issued a Show Cause Notice dated 31.12.2018, alleging violation of the Customs Brokers Licensing Regulations, 2018, on the grounds of ceasing to be a member of the Cochin Customs Brokers Association. Upon adjudication, the Commissioner imposed a penalty of ₹50,000. Aggrieved by this, the assessee filed the present appeal.

The two member bench comprising D.M Mishra (Judicial Member) and Pullela Nageswara Rao ( Technical Member) noted, after considering submissions from both sides and examining the records, that the Commissioner had imposed the penalty solely on the basis that the appellant was not a member of the Cochin Customs Brokers Association, thereby alleging a breach of Rule 20 of the CBLR, 2018.

However, it was evident that the assessee had applied for membership on 31.12.2018 and was granted membership effective from 02.01.2019, prior to the receipt of the Show Cause Notice. Given these facts, the CESTAT found that the penalty imposed was not justified. As a result, the penalty was set aside and the appeal was allowed.

Relief for BPL Ltd: CESTAT Rules Payment Received from JVA as Pure Reimbursement for Business Transfer Delay, Not Manpower Supply

M/s. BPL Limited vs The Commissioner of Service Tax 2025 TAXSCAN (CESTAT) 826

BPL Ltd entered into a business transfer agreement with Sanyo BPL Pvt Ltd (SBPL) on 14 December 2005 for transferring its colour television business, including employees, to the joint venture. The transfer, which was supposed to happen in June 2005, was delayed until 15 December 2005 due to reasons beyond BPL’s control. During this period, BPL paid salaries and rent and raised debit notes to SBPL to recover these costs.

The tribunal observed that BPL was not engaged in manpower supply services and that genuine reimbursements are not taxable, following the Supreme Court’s ruling in Intercontinental Consultants. The tribunal further observed that the transactions were reflected in BPL’s audited accounts and there was no suppression or intent to evade tax, making the extended limitation period inapplicable.

The tribunal explained that the consideration received was for reimbursement of salaries and rent and could not be taxed under manpower supply services. The tribunal allowed BPL’s appeal and set aside the demand, interest, and penalties, granting consequential relief as per law.

Trading Not Exempted Service Before 2011: CESTAT Quashes CENVAT Credit Demand and Penalty

M/s Frigo Glass India Pvt. Ltd vs Commissioner of Central Excise 2025 TAXSCAN (CESTAT) 827

Frigo Glass India Pvt. Ltd.,appellant-assessee,was engaged in manufacturing commercial refrigerators. During an audit in July/August 2013, it was found that the company also carried out trading activities, which qualified as exempted services. Since separate records for input services were not maintained, authorities held that CENVAT credit reversal was required under Rule 6(3) of the CENVAT Credit Rules.

The two member bench comprising S.S.Garg (Judicial Member) and P.Anjani Kumar( Technical Member) observed that trading activities were treated as exempted services only from 01.04.2011, based on the amended definition under Rule 2(e) of the CENVAT Credit Rules and supported by a 2011 notification. It held that the assessee was not required to reverse CENVAT credit for the period before this date.

It further found that the extended period was wrongly invoked, as there was no evidence of fraud, suppression, or misstatement. The assessee was regularly audited and had paid taxes, and the demand was based solely on audit findings.

Relief for TTK Prestige: CESTAT Allows CENVAT Credit on ISD Invoices for Business Related Services

M/s. TTK Prestige Ltd. vs The Commissioner of GST & CentralExcise 2025 TAXSCAN (CESTAT) 828

TTK Prestige Ltd, appellant-assessee, was engaged in manufacturing stainless steel and aluminium pressure cookers and pans, and paid Central Excise Duty under Section 4A of the Central Excise Act, 1944. It availed Cenvat Credit on inputs and input services under the Cenvat Credit Rules, 2004.

A single member bench of P.Dinesha (Judicial Member) after hearing both sides and examining the records, considered whether the appellant was eligible to avail credit of the service tax paid on the impugned services. It noted that in the assessee’s own case for an earlier period, the same issue had been analysed and decided by the tribunal in Final Order No. 40331/2018 dated 19.01.2018.

In that order, the appellate tribunal had held that the main reason for denying credit was that the services were availed through ISD invoices issued by the corporate office. The Department had argued that these services were not consumed at the manufacturing unit and had no nexus with manufacturing activities. However, the bench had clarified that once the corporate office had obtained input service distributor registration, the distribution of credit through ISD invoices was in line with the law.

Rejection of SAD Refund for Missing Period in CA Certificate: CESTAT Sets Aside Order, Remands Matter to AA for Verification

M/s.N.R. Colours Ltd. vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 829

N.R. Colours Ltd.,appellant-assessee, filed an appeal challenging the rejection of its Special Additional Duty (SAD) refund claim. The refund was initially denied through Order-in-Original No. 30689/2014 dated 28.10.2014 on the ground that the CA’s certificate submitted in support of the claim did not specify the relevant period, as the space for the period was left blank. The authority noted that the assessee had failed to respond to or rectify this defect.

A single member bench of P.Dinesha (Judicial Member) observed that the refund was not rejected due to doubts over the CA's certificate but because it was incomplete as the period for which the books were verified was left blank.

It noted that the assessee did not place the certificate on record before the tribunal and relied only on verbal arguments, which could not substitute documentary evidence.

Free Material Supplied by NTPC for Maintenance Services Cannot Be Included in Gross Value for Service Tax Abatement: CESTAT

M/s Utility Powertech Ltd vs Commissioner of Central Tax 2025 TAXSCAN (CESTAT) 830

Utility Powertech Ltd, the appellant, was providing maintenance and repair services for NTPC’s thermal power stations under long-term agreements. The company paid service tax under “Construction Services” after claiming abatement on 67 percent of the value while excluding the cost of materials that NTPC supplied free of charge for the projects.

The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) agreed with the appellant’s arguments regarding the exclusion of free materials. The tribunal observed that the Supreme Court’s ruling in Bhayana Builders settled the law that free materials provided by the service recipient cannot be added to the gross value for the purpose of service tax abatement. The tribunal also observed that there was no deliberate suppression by the appellant, making penalties and the extended period demand unjustified.

The tribunal explained that while the classification under MMRS was correct, the inclusion of free material value for abatement was legally incorrect, and the penalty under Section 78 could not be imposed in the absence of willful suppression. The appeal was partly allowed, setting aside the demand related to the inclusion of free material value and the penalty, while upholding the correct service classification under MMRS.

Crude Shea Butter with High FFA Not Edible Grade: CESTAT Denies Customs Duty Exemption under Notification

M/s Foods, Fats & Fretilisers Ltd. vs Commissioner ofCustoms 2025 TAXSCAN (CESTAT) 831

Foods, Fats & Fertilisers Ltd., presently known as 3F Industries Ltd., the appellant, imported 187 metric tons of crude shea butter intended for manufacturing shea stearin, which would later be used in making food products and exported. The appellant initially classified the imports under the correct tariff heading and claimed customs duty exemption under Serial No. 33B of Notification No. 21/2002. Later, it argued that the exemption under Serial No. 33A should apply since the goods were of edible grade.

The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) observed that there were conflicting laboratory reports, but there were no specific PFA standards for shea butter at the time of import, and the Customs House Laboratory report indicating high FFA content could not be ignored.

The tribunal observed that even if the shea butter could be processed into an edible product later, the exemption eligibility must be examined in the form in which the product was imported, not based on its end use after processing. The tribunal also observed that part of the imported quantity was used for non-food purposes, indicating that the entire import could not be treated as edible grade.

CESTAT Quashes Customs Duty Demand on Re-Imported Rejected Diesel Generator Sets Citing Lack of Suppression

Sterling Generators Pvt Limited (EOU) vs Commissioner CGST &Central Excise

2025 TAXSCAN (CESTAT) 832

Sterling Generators Pvt Ltd, the appellant, is a 100% Export Oriented Unit (EOU) manufacturing diesel generator (DG) sets. They supplied five DG sets to SEZ Biotech Services Pvt Ltd, an SEZ unit, in March 2008, out of which three DG sets were rejected by the SEZ buyer.

The two-member bench comprising Dr. Ajaya Krishna Vishvesha (Judicial Member) and S.V. Singh (Technical Member) observed that the appellant had disclosed all facts at the time of re-import and in their ER-2 returns, and the SEZ Authorised Officer had cleared the goods duty-free after examining the documents. The tribunal further observed that the department issued the show cause notice in 2014, more than four years after re-import, based on CERA audit objections, and there was no suppression of facts by the appellant to justify the extended period invocation.

The tribunal explained that since the extended period could not be invoked, the customs duty demand and penalties under Sections 112 and 114A of the Customs Act were unsustainable. The tribunal also observed that procedural delays should not result in the denial of substantive benefits where goods are returned and re-engineered for customer-specific requirements within the EOU operational framework.

Jharkhand Agricultural Marketing Board Not a Service Provider but Merely Supervisory: CESTAT Quashes Service Tax Demand

M/s Jharkhand State Agricultural Marketing Board vs Commr. ofCentral Excise & Service Tax 2025 TAXSCAN (CESTAT) 833

JSAMB, the appellant, is a statutory board established by the Government of Jharkhand to oversee agricultural marketing across the state. The department issued show cause notices alleging that JSAMB had let out immovable property and collected rent between 2008–09 and 2011–12 without paying service tax under the “Renting of Immovable Property” category. A service tax demand of Rs. 64,85,298 was confirmed by the adjudicating authority, along with interest and penalties under Section 78 of the Finance Act, 1994.

The two-member bench comprising R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member) observed that rental agreements clearly identified APMCs as the lessors and the rent was deposited directly into their accounts. The board did not own or lease the properties in question and did not receive any rental income.

The tribunal further observed that the Supreme Court decision relied upon by the department applied to the APMCs themselves and not to supervisory boards like JSAMB. Since JSAMB was not the service provider, it could not be held liable for service tax under the “Renting of Immovable Property” category.

Cenvat Credit on Sales Commission to Agents Admissible: CESTAT

M/s. Tamilnadu Petroproducts Ltd vs Commissioner of GST &Central Excise 2025 TAXSCAN (CESTAT) 834

Tamilnadu Petroproducts Ltd, the appellant, is a manufacturer of chemicals, including Linear Alkyl Benzene and Epichlorohydrin. During an audit, the department found that the appellant had availed Cenvat credit on service tax paid on sales commission paid to domestic marketing agents from April 2011 to December 2014.

The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that the agreement with marketing agents clearly showed that the agents were engaged in procuring orders, coordinating with customers, displaying advertisements, and promoting sales, establishing that the services were in the nature of sales promotion covered under the inclusive definition of input service in Rule 2(l). It further observed that CBEC’s circular and subsequent clarifying amendments support the eligibility of Cenvat credit on sales commission.

The tribunal explained that the Gujarat High Court’s Cadila Healthcare decision was based on facts where the commission agents did not engage in sales promotion, unlike in the present case, where evidence of sales promotion by agents was available. It also held that since the appellant disclosed the credit availed in statutory returns and there was no evidence of suppression or intent to evade duty, the extended period invocation and penalty under Section 11AC were not sustainable.

‘Half-Hearted Investigation by DRI’: CESTAT Remands Genuineness of Manufacturing Activity Matter for Reinvestigation

M/s.Welcord Component Industries vs The Commissioner of GST& Central Excise 2025 TAXSCAN (CESTAT) 835

Welcord Component Industries, the appellant, is engaged in the manufacture of wire-insulated assemblies used in mosquito repellent devices for Godrej Consumer Products Ltd. A search was conducted at their premises by the Central Excise department on December 8, 2014, during which the statements of several employees and partners were recorded.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) observed that the department alleged the absence of manufacturing, but it did not fully deny the existence of machinery or manufacturing activity. Key evidence, including a DVD submitted by the appellant to demonstrate manufacturing operations and stock details from the mahazar, was not addressed in the adjudicating authority’s order. The tribunal also observed that no effort was made to consult an expert to assess the condition of the machinery or to verify records at Godrej’s end.

The tribunal held that the investigation was only a partial effort, and the conclusions were drawn without complete verification. It found that serious claims by the appellant had either been overlooked or ignored.

Relief to LG Electronics: CESTAT allows CENVAT Credit on Brand Shop Management Services as Advertising Services

M/s LG Electronics India Pvt. Ltd vs Commissioner of CentralExcise 2025 TAXSCAN (CESTAT) 836

LG Electronics, the appellant, is engaged in the manufacture of home appliances like washing machines, air conditioners, and refrigerators. The company availed CENVAT credit on various services used for setting up brand shops at the premises of dealers and sub-dealers across the country.

The tribunal held that the CENVAT credit on brand shop management services was admissible and allowed the CENVAT Credit Claim on this ground.

In further relief to the appellant, the tribunal set aside the penalty and disallowed the use of the extended limitation period.

CESTAT Rules Electronic Data Without S. 36B Certification and Statements Without S. 9D Compliance Cannot Be Used for Excise Duty Demand

Commissioner of Central Excise & CGST vs M/s Paradise Steels Pvt. Ltd 2025 TAXSCAN (CESTAT) 837

Paradise Steels Pvt. Ltd., the respondent, is a manufacturer of stainless steel patta and patti. The department conducted an investigation and seized a computer and certain records from the factory. Based on the data retrieved from a USB drive and the statement of the director, the department believed that Paradise Steels cleared cold rolled patta in the guise of hot rolled patta to avoid paying excise duty, reversing 6% on exempt goods instead of paying 12.36% duty.

The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that Section 36B requires certification by a responsible officer for electronic records, and a panchnama cannot replace this requirement. The tribunal also observed that Section 9D requires examination and cross-examination of the person whose statement is relied upon, and without following this procedure, the statement cannot be used as evidence.

The tribunal further observed that the department did not take statements from buyers to confirm the type of goods received, which was critical for proving clandestine removal. The tribunal explained that without following these legal requirements, the department could not rely on the electronic data or the statement of the director to demand duty or impose penalties. The appeals filed by the department were dismissed.

Transaction value cannot be rejected by invoking rule 10A of Valuation Rules in absence of evidence showing undervaluation: CESTAT

M/s. Elegant International vs Commissioner of Central Excise(Adjudication) 2025 TAXSCAN (CESTAT) 838

Elegant International, the appellant, challenged the order dated 06.02.2009 passed by the Commissioner of Central Excise (Adjudication), New Delhi, insofar as it rejects the transaction value of the imported silk fabrics from China through 37 Bills of Entry during the period from September 2003 to January 2005 under rule 10A of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, and re-determines the transaction value under rule 5 of the 1988 Valuation Rules.

A two member bench of Justice Dilip Gupta, President and Hemambika R. Priya, Member (Technical) observed that the Commissioner was not justified in rejecting the transaction value of silk fabrics in the 37 Bills of Entry during the period from September 2003 to January 2005 under rule 10A of the 1988 Valuation Rules. The issue of re-determination of the transaction value under the provisions of rule 5 of the 1988 Valuation Rules would, therefore, not arise. The imposition of redemption fine or imposition of penalty under section 114(A) of the Customs Act cannot, therefore, also be sustained.

Suppression cannot be alleged by Dept when Service Tax on GTA Service not paid on Bonafide belief: CESTAT

Rakesh Singhal vs Commissioner of Central Excise and ST 2025 TAXSCAN (CESTAT) 839

Rakesh Singhal, the appellant challenged the impugned order dated 04.03.2024 passed by the Commissioner (Appeals), whereby the Commissioner (Appeals) upheld the Order-in-Original dated 30.03.2022 passed by the Additional Commissioner, CGST, Rohtak whereby the Commissioner (Appeals) has confirmed the demand of Rs. 1,04,40,288/- under Section 73 of the Finance Act, 1944 read with Section 174 of Central Goods and Service Tax Act, 2017 along with appropriate rates of interest under Section 75 of the Finance Act and also imposed equal penalty under Section 78 of the act read with Section 174 of the CGST Act, vide the impugned order, also imposed penalty of Rs. 10,000 under Section 77(1)(c)(i) of the Act read with Section 174 of the CGST, Act.

A two member S. S. Garg, Member (Judicial) and P. Anjani Kumar, Member (Technical) held that the services rendered to other GTA are exempted from the payment of service tax as GTA are also exempted from payment of service tax as per the entry 22 of the Notification No. 25/2012-ST dated 20.06.2012 because both the conditions which are required to be satisfied are satisfied by the appellant.

Relief for Oman Air: CESTAT Rules Non-Reporting in ST-3 Returns Does Not Extinguish Validly Availed CENVAT Credit

Oman Air SAOC vs Commissioner of Service Tax – I 2025 TAXSCAN (CESTAT) 840

Oman Air SAOC, the appellant, is an international airline operating in India and registered for service tax under the Finance Act, 1994. The airline had availed CENVAT credit of Rs. 6.70 crore on input services as of 30 September 2008.

The two-member bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) observed that there was no allegation that the credit was wrongly availed or used improperly. It further observed that the non-reporting of the credit in ST-3 returns did not amount to a violation of any substantive law.

The tribunal stated that there was no legal requirement that credit must be reported within a reasonable time or else be forfeited. Since the credit remained recorded in Oman Air’s internal accounts and was accepted as partly used to settle prior liabilities, the tribunal held that it could not be denied merely due to procedural delay.

Explanation 3 of S.140 CGST Act Not Sufficient to Deny Transitional Credit Refund to Tata Sons: CESTAT

TATA SONS PVT LTD vs THE COMMISSIONER OF CGST & CENTRALEXCISE 2025 TAXSCAN (CESTAT) 841

Tata Sons Pvt. Ltd., the appellant, is a registered taxpayer that was availing CENVAT credit on cesses such as Education Cess, Secondary and Higher Education Cess, and Krishi Kalyan Cess under the earlier regime.

The single-member bench of Ajay Sharma (Judicial Member) observed that Explanation 3 relies on amended Explanations 1 and 2 to define the term “eligible duties and taxes,” and those amendments were never notified, so they have no legal effect. The tribunal explained that an amendment, even if passed, cannot be enforced unless it is officially notified. The rejection of the refund based solely on Explanation 3 was not sustainable.

The tribunal set aside the Commissioner’s order and remanded the matter to the adjudicating authority for fresh consideration of the refund claim after verifying documents and providing the appellant an opportunity to be heard.

Penalty u/s 114 Unsustainable as Goods Already Exported: CESTAT quashes Customs Order in DEPB Evasion Case

Sh. Ratinder Pal Singh Bhatia vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 842

The assessee-appellant, Ratinder Pal Singh Bhatia was involved in a case of exporting CD-ROMs and alleging the misuse of the Duty Entitlement Passbook (DEPB) and thereby evading Customs duty.

The Tribunal bench comprising Dilip Gupta (President) and P.V. Subba Rao (Technical Member) noted that except for the statements made under section 108 of the Act, there is no other evidence which has been considered by the Commissioner in the impugned order for imposing a penalty upon the appellant under section 114 of the Customs Act.

The tribunal further held that these statements could not be relied upon since they were not tested as per the procedure under section 138B of the Customs Act.

Relief for Maruti Suzuki: CESTAT Rules CENVAT Credit on Input Services Used for Business or Personal Use Valid if Availed Before April 2011 Amendment

Maruti Suzuki India Ltd vs Commissioner of Central Goods &Service Tax 2025 TAXSCAN (CESTAT) 843

Maruti Suzuki India Ltd., the appellant, is engaged in the manufacture of motor vehicles. During the period from July 2006 to March 2012, the company availed CENVAT credit worth Rs. 65,34,129 on insurance services and authorized service station services related to vehicles used in its operations.

The two-member bench comprising S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) observed that there was no evidence to show the vehicles were used solely for personal purposes, and found that the services were closely linked to the company’s business activities.

It further observed that the amendment to Rule 2(l) could not be applied retrospectively. The tribunal also noted that the appellant was a major taxpayer regularly audited by the department, and the extended limitation period and penalty were not justified. The tribunal remanded the case to the adjudicating authority to verify whether the services were availed before 1 April 2011.

Customs cannot Confiscate Already Exported CD-ROMs with Inflated Freight on Board Value: CESTAT quashes ₹25L Penalty u/s 114

Bimal Kumar Jain vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 844

The Tribunal bench comprising Dilip Gupta (President) and P.V. Subba Rao (Technical Member) noted that, except for the statements made under section 108 of the Act, there is no other evidence which has been considered by the Commissioner in the impugned order for imposing a penalty upon the appellant under section 114 of the Customs Act.

The tribunal further held that these statements could not be relied upon since they were not tested as per the procedure under section 138B of the Customs Act.

The tribunal noted that the goods had been exported. Therefore, the goods could not have been confiscated under section 113(d) of the Act. The penalty under this section can only be levied if the goods are held liable to confiscation under section 113.

Mere Purity of Gold would not make it as Foreign origin: CESTAT sets aside Confiscation of Gold Bars in absence of Corroborative Evidence

Shri Monirul Mallick vs Commissioner of Customs (Preventive) 2025 TAXSCAN (CESTAT) 845

Shri Monirul Mallick, Vill., wherein the Commissioner (Appeals), C.G.S.T., Central Excise and Customs, Guwahati has upheld the Order-in-Original dated 05.06.2020 passed by the adjudicating authority. On 02.03.2019, at around 12:30 p.m., one Sk. Amjad Ali, employee of Shri Monirul Mallick (the appellant herein) was intercepted at Platform No. 4 of Guwahati Railway Station by the personnel of Government Railway Police, Guwahati Railway Station while he was travelling from Guwahati to Howrah via Saraighat Express Train (12346 DN).

A single bench of K. Anpazhakan, Member (Technical) observed that the mere gold having 99.5% purity would not automatically make the gold as foreign origin gold. Department must establish the foreign origin of gold with corroborative evidence. It is true that as per the above provisions of Section 123 of the Customs Act, 1962 it is not required that gold should contain foreign markings and even gold in primary form or jewelry could also be covered as per the language of the provision. But the onus of Indian origin on any primary gold or jewellery bearer is cast upon the person in possession of such gold.

CESTAT allows CENVAT credit on inputs and input services utilized as output service

M/s. Golf Links Software Park Pvt. Ltd vs Commissioner ofCentral Tax 2025 TAXSCAN (CESTAT) 846

Golf Links Software Park Pvt. Ltd, the appellant is involved in various commercial and industrial construction services, renting of immovable property services etc. On verification of the ST-3 returns filed by the Appellant for the period from 01.04.2009 to 31.03.2010, it is observed that they have availed and utilized the ineligible inputs services. Accordingly, proceedings were initiated and the Adjudication authority as per the impugned order, confirmed the demand of duty and also imposed penalty under various provisions of law.

The issues involved is denial of cenvat credit on various input services namely, Architects Service, Banking service, Business support Service, Chartered Accountant service, Commercial or industrial construction service, Design service, Insurance service, Management consultant service and Real Estate Agent service., which were used for rendering service under Renting of Immovable Properties, commercial and industrial construction services, etc.

A two member bench of P.A. Augustian, Member (Judicial) and R. BhagyaDevi, Member (Technical) has held that the assessee was entitled to CENVAT credit both on inputs and input services utilized for the construction to be utilized as output service being renting of immovable property.

Delay in filing Service Tax Refund Application not Condonable in Absence of Proper Explanation: CESTAT

Commissioner, Central Tax vs M/s NSC Projects (Private) Limited 2025 TAXSCAN (CESTAT) 847

NSC Projects Pvt. Ltd, the respondent assessee are registered with Service Tax Delhi under the categories of Construction services other than residential complex including commercial/industrial buildings or civil structures, 'Construction of Residential Complex Service, 'Works Contract Services’.

A two member bench of Dr. Rachna Gupta, Member (Judicial) and P.V. Subba Rao, Member (Technical) viewed that irrespective of the delay in filing the refund claim is a procedural lapse but there is no reasonable explanation for the occurrence of said delay. A litigant is required to be diligent. The Commissioner (Appeals) has failed to follow the judicial discipline.

The tribunal set aside the order under challenge and both the appeals filed by the department are allowed.

Excess amount of service tax paid cannot be alleged to be with malafide intention in absence of Evidence: CESTAT

SHIV LOGISTICS vs COMMISSIONER OF CGST 2025 TAXSCAN (CESTAT) 848

Show Cause Notice dated 6th December, 2012 was issued to the appellant by invoking extended period. The first Adjudicating Authority / Joint Commissioner adjudicated the show cause notice and confirmed the demand after brushing aside the various submissions advanced by appellant in the course of adjudication proceedings. On appeal, the learned Commissioner (Appeals) rejected the appeal filed by the appellant.

It was observed that if adjustment of excess payment of service tax was made without intimating to the department, it is procedural lapse only. On this basis, the department cannot retain excess payment of Service Tax which was not otherwise due to be paid.

A single bench of Dr. Ajaya Krishna Vishvesha, Member ( Judicial ) held that the department cannot be allowed to invoke extended period of limitation of five years in this case because excess payment of service tax by appellant is an admitted position by the department. The issue regarding adjustment was observed by Audit. There cannot be any suppression of material facts. The department should have issued show cause notice within a normal period of 18 months as provided under section 43 (1) of Finance Act, 1994 but, the Show Cause Notice was issued in fact beyond the period of limitation which is time barred.

Reimbursed Expenses Like "Other Expenses" and "Extra Hour Service Charges" Not Taxable Under Service Tax: CESTAT

M/s. Middleton Leaseholders Pvt. Ltd vs Commissioner of ServiceTax-II 2025 TAXSCAN (CESTAT) 849

Middleton Leaseholders Pvt. Ltd., which sublet premises and collected incidental charges from tenants, was issued a demand of Rs. 41.99 lakh in service tax, interest, and penalties. The department treated the reimbursed charges as taxable under “Maintenance or Repair Services” and “Renting of Immovable Property Services.”

The tribunal explained that reimbursement of actual expenses does not attract service tax in the absence of a legal provision expressly allowing it before the 2015 amendment.

The tribunal also noted that the department failed to establish any deliberate suppression of facts. The major portion of the demand was set aside, and only a small interest amount and a Rs. 10,000/- penalty were upheld. The appeal was thus allowed in part.

Value of Clearances of Proprietorship and Pvt. Ltd. Firm cannot Be Clubbed for SSI Exemption: CESTAT

M/s. Mica Mold vs Commissioner of Central Excise and Service Tax 2025 TAXSCAN (CESTAT) 850

Mica Mold, the appellant, is a proprietorship firm engaged in manufacturing electrical components for use in railway equipment. The firm claimed SSI exemption for the relevant financial years. The Revenue alleged that Mica Mold and Mica Mold Pvt. Ltd., a separate private limited company, were essentially the same business entity operating under different legal forms to avoid excise duty.

The two-member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) observed that common family ownership or shared premises was not sufficient to establish financial interdependence or mutuality of interest.

The tribunal stated that in the absence of direct evidence showing centralized control or financial flow between the two entities, clubbing was not legally justified.

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