Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 19)

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

Accountant’s Clerical Error in ST-3 Returns: CESTAT Holds Only Two Instances of Delay Valid, Grants Partial Relief on Interest Demand

M/s AKC & SIG vs Commissioner of CGST And Central Excise

2025 TAXSCAN (CESTAT) 1001

AKC & SIG, a joint venture firm engaged in site formation, excavation, and demolition services, was subjected to audit for the financial year 2015-16. The audit revealed late filing of ST-3 returns without payment of the statutory late fee of Rs. 32,400 and an alleged delay in service tax payment resulting in an interest liability of Rs. 2,57,814.

The single-member bench of Dr. Rachna Gupta observed that Section 75 uses the word “shall,” which makes payment of interest compulsory if tax is not paid on time. The tribunal observed that there was indeed a six-day delay in January 2015 and a two-day delay in January 2016, which justified interest for those invoices.

The tribunal also observed that the other entries were wrongly recorded due to a typographical error, as the invoices and payment dates related to a later quarter and matched timely payments.

Group Insurance Covering Accidental Death and Injury During Working Hours Qualifies as Input Service, Not Personal Use: CESTAT

M/s Cabletech Services Private Limited vs Commissioner ofCentral Excise & Service Tax

2025 TAXSCAN (CESTAT) 1002

Cabletech Services Pvt. Ltd., the appellant, is a registered service provider engaged in manpower supply to clients including Hathway Cable & Datacom Ltd. The appellant availed CENVAT credit of Rs. 29,15,688 on group mediclaim, life insurance, and personal accident policies provided to its employees during 2014-15 to 2017-18.

The tribunal observed that statutory compliance through group insurance was necessary to carry on manpower supply and without such compliance, output service could not be provided. It further observed that the policies covered only accidental death and injury during working hours and did not extend extra personal benefits.

The tribunal pointed out that judicial decisions, including those of the Larger Bench, consistently held that statutory requirements are essential inputs and not personal use.

Maintenance Deposits Collected by Builders for Sinking and Development Funds Are Not Taxable as Services: CESTAT

M/s. Parvati Resource Private Limited vs Commissioner of ServiceTax

2025 TAXSCAN (CESTAT) 1003

Parvati Resource Pvt. Ltd., the appellant, was engaged in real estate and renting activities. The department demanded service tax on deposits collected from flat purchasers, treating them as consideration for management, maintenance, and repair services.

The tribunal pointed out that the nature of these deposits showed they were trust funds held for the benefit of the society, not payments for services rendered.

The tribunal explained that since there was no quid pro quo between the appellant and the flat owners in relation to these deposits, they could not be taxed. The service tax demand on maintenance deposits was set aside.

Absence of Foreign Markings and Purity Below Standard: CESTAT Quashes Penalties in Alleged Gold Smuggling Case

Shri Kailash Pareek @ Kailash Sharma Pareek vs Commissioner ofCustoms (Preventive)

2025 TAXSCAN (CESTAT) 1004

Shri Kailash Sharma Pareek, Shri Shankar Lal, and Shri Jyotish Pareek, the appellants, were penalized under Section 112(b)(i) of the Customs Act, 1962 after the DRI intercepted a truck in Guwahati carrying 40 gold bars weighing 6.6 kg.

The tribunal observed further that the seized gold had no foreign markings, and the purity did not prove foreign origin. In such circumstances, the tribunal explained that the burden under Section 123 did not shift to the appellants since they had not claimed ownership of the gold.

The tribunal pointed out that suspicion alone could not substitute for evidence of smuggling, and without proof of foreign origin, penalties under Section 112(b)(i) were not sustainable. The tribunal explained that when gold is not established as prohibited goods, the provisions of Section 112(b)(i) cannot be invoked. The appeals were allowed and the penalties set aside.

Sole Reliance on Retracted and Untested Statements Impermissible: CESTAT Sets Aside Penalty on Diamond Broker in Overvaluation Case

Shri Dulraj Uttamchand Jain vs Commissioner of Customs (Airport)

2025 TAXSCAN (CESTAT) 1005

Shri Dulraj Uttamchand Jain, the appellant, had earlier worked as an accountant and later operated as a diamond broker under the name Roop Impex. He was accused of acting as a link between two parties involved in importing diamonds, allegedly overvalued to remit excess foreign exchange.

A penalty of Rs. 2,00,000 was imposed on him under Section 112(a) of the CustomsAct, 1962, which was reduced to Rs. 1,50,000 by the Commissioner (Appeals). Aggrieved by the confirmation of the penalty, he filed an appeal before the CESTAT.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the penalty was imposed merely on the basis of statements without any independent evidence. The tribunal observed that the statements were retracted and were never tested as per Section 138B of the Act, making reliance on them impermissible.

Transportation Services from Individual Truck Owners Without Consignment Notes Not Covered Under GTA Services, Not attracts Service Tax: CESTAT

M/s Pioneer Paper & Stationary Private Limited vsCommissioner of CGST & Central Excise

2025 TAXSCAN (CESTAT) 1006

Pioneer Paper & Stationary Pvt. Ltd., the appellant, is a manufacturer of excisable goods. For transporting goods between 2012-13 and 2016-17, the appellant engaged private truck owners who did not issue any consignment notes.

The single-member bench of Ashok Jindal (Judicial Member) observed that it was a matter of record that no consignment notes were issued by the truck owners. The tribunal explained that the definition of GTA service necessarily requires issuance of consignment notes, and in their absence, the services fall outside the ambit of GTA.

The tribunal further pointed out that as the demand itself was unsustainable, the penalty and extended limitation also could not survive. The tribunal set aside the demand and penalty, and the appeal was allowed with consequential relief.

Sale of Application Forms, Tender Papers and Publicity Work by Odisha State Housing Board Not Taxable as Services: CESTAT

M/s. Odisha State Housing Board vs Commr. of CGST & CentralExcise, Bhubaneswar-I

2025 TAXSCAN (CESTAT) 1007

The appellant, Odisha State Housing Board, was constituted under the Orissa Housing Board Act, 1968 and functions directly under the Government of Odisha.

A show cause notice was issued demanding service tax under the category of “Real Estate Agency Service” for the period 2007-08 to 2011-12. The Commissioner confirmed the demand by order, which led the appellant to approach the Tribunal.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the Housing Board is not a commercial entity but a statutory body performing sovereign functions for the Government of Odisha.

Refurbishment of Used Cars Amounts to Self-Service: CESTAT Holds Maruti Suzuki’s Popular Vehicles Dealer Not Liable to Service Tax

M/s. Popular Vehicles and Services Ltd. vs Commissioner of GST& Central Excise

2025 TAXSCAN (CESTAT) 1008

The appellant, M/s. Popular Vehicles and Services Ltd., an authorized service station for Maruti Suzuki cars, was subjected to an audit by the Service Tax department. It was found that the company is engaged in buying and selling used cars after refurbishment and replacement of spares. The department alleged that the assessee had failed to pay Service Tax on refurbishment of old cars and issued a show cause notice demanding tax of ₹4,62,466 for the period 2005-06 to June 2009.

The Bench, comprising Judicial Member P. Dinesha and Technical Member M. Ajit Kumar observed that the matter was settled by judicial precedents which clarified that the sale of vehicles is governed by the Sale of Goods Act, 1930, and not dependent on registration from the Regional Transport Office.

Accordingly, the Tribunal held that refurbishment carried out while the vehicle is owned by the assessee amounts to self-service, is not a service to another person and thus falls outside the ambit of Service Tax. Accordingly, CESTAT set aside the orders of the lower authorities and allowed the appeal with consequential relief.

CESTAT Upholds ₹2.55L CENVAT Credit Demand with Interest, Sets Aside Penalty u/s. 11A(2) as Duty Paid Pre-SCN

M/s Zumax Equipments Pvt. Ltd. vs Commissioner of Central Excise& CGST

2025 TAXSCAN (CESTAT) 1009

The Appellant, M/s Zumax Equipments Pvt. Ltd., engaged in manufacturing kitchen equipment and other articles of iron and steel, was registered under the Central Excise law. During an audit covering 2014-15 to June 2017, the department discovered that the company had availed CENVAT credit of ₹2,55,917 on items like panel enclosures and motors. These goods were traded along with its own manufactured products, but no evidence was produced to show that they were used in the manufacture of dutiable goods or in taxable services.

The Bench comprising Sanjiv Srivastava, Member Technical, held that the CENVAT credit was indeed wrongly availed, as no proof was provided that the items were used in manufacture. The Tribunal rejected the appellant’s claim that interest had already been settled, since no evidence of such payment was furnished despite being given time.

However, the Tribunal agreed that the penalty under Section 11AC of the Central ExciseAct, 1944 was not sustainable. Relying on Section 11A(2), it observed that once duty and interest are deposited before notice, continuation of penalty proceedings is barred.

“User Test” Theory Classifies Cement and Steel Items Used for Own Plant Construction as Inputs: CESTAT Allows Ramco Cements to Avail CENVAT Credit

The Ramco Cements Ltd vs Commissioner of GST & CentralExcise

2025 TAXSCAN (CESTAT) 1010

The appeal was filed by The Ramco Cements Limited, Cement Grinding Unit, Kancheepuram, against the Order-in-Appeal dated May 10, 2023 delivered by the Commissioner of GST & Central Excise (Appeals–II), Chennai.

The dispute arose after a Show Cause Notice dated May 25, 2010, alleged that the company had wrongly availed CENVAT credit on cement and structural steel used for the erection of the cement grinding plant during September 2008 to August 2009.

The Bench comprising Judicial Member, P. Dinesha and Technical Member, M. Ajit Kumar, observed that the matter had already been examined by a larger bench of the Tribunal in Mangalam Cement Ltd. v. CCE, Jaipur-I (2018); further, the aforementioned precedents had already settled the issue in favour of assessees, recognizing that steel and cement used for laying foundations and supporting plant machinery are integral to capital goods, thereby entitling the assessee to CENVAT credit.

Management Consultancy and Ship Management Form Part of SEZ Unit Approval Committee’s Approved List, Refund Admissible: CESTAT

Swan Defence and Heavy Industries Ltd vs C.G.S.T. & CentralExicse-Bhavnagar

2025 TAXSCAN (CESTAT) 1011

Swan Defence and Heavy Industries Ltd., the appellant, operates from Pipavav Port in an SEZ. Refund claims they filed were partly rejected by the Commissioner (Appeals), Rajkot, on the ground that management consultancy and ship management services were not in the list of services approved by the SEZ Unit Approval Committee.

The single-member bench of Judicial Member Somesh Arora observed that the clarification issued on 11.08.2015 confirmed that the 91 approved services remained valid from 01.02.2012 onwards.

The tribunal explained that ship management service is a species of the genus “Management, Maintenance or Repair Services” which was in the approved list, and thus refunds could not be denied. The tribunal held that rejection of refunds on this ground was unsustainable and directed that the refund be sanctioned with consequential relief. The appeals were allowed.

Rejection of Settlement proposal by Bank does not meant to be principles of natural justice: Calcutta HC Dismisses Writ Petition

Dr. Tushar Kanti Karmakar vs Shilabati Hospital Private Limited& Ors

2025 TAXSCAN (CESTAT) 1012

Dr. Tushar Kanti Karmakar, the petitioner is purchaser of mortgaged property and Secured Creditor, State Bank of India assailed the impugned Judgment and Order dated 11th December, 2018 passed by Single Bench of the High Court in Shilabati Hospital Private Limited & Ors. Vs. State Bank of India & Ors.by filing two separate appeals.

The issues involved particularly arising from the sale of a mortgaged property under the provisions of The Securitisation And Reconstruction Of Financial Assets And Enforcement of Security Interest Act, 2002 ( ‘SARFAESI Act, 2002’) and The Security Interest (Enforcement) Rules, 2002 ( ‘the said Rules, 2002’) thereof.

The Writ Petitioners/Borrowers, being the Directors of M/s Shilabati Hospital Pvt. Ltd. (Private limited company within the meaning of Companies Act, 2013), approached the State Bank of India seeking a loan to facilitate medical treatment for the public through their hospital, namely, M/s Shilabati Hospital Pvt. Ltd.

Refund of Pre-Deposit Must Include Interest: CESTAT Rules in Customs Case

PARESH DAXINI & COMMISSIONER OF CUSTOMS

2025 TAXSCAN (CESTAT) 1013

The case was filed by Paresh Daxini, who had been penalized rupees five lakh for allegedly aiding an importer in the diversion of duty-free imported goods into the local market. In order to pursue his appeal before the Tribunal, he deposited rupees two lakh and fifty thousand as a statutory pre-deposit under Section 129E of the Customs Act, 1962.

The Bench of Dr. Suvendu Kumar Pati, Judicial Member, examined Section 129EE and observed that it clearly covers “any amount deposited under Section 129E,” which includes pre-deposit against penalty. The Tribunal held that interest accrues from three months after the appellate order dated 28.02.2006, and that the Department had no justification for withholding it. The appeal was accordingly allowed, and the Department was directed to pay the interest within two months.

The Tribunal relied on CBEC Circular No. 984/08/2014-CX and Circular No. 802/35/2004-CX, both of which emphasized that refunds of pre-deposit must be accompanied by interest and that delays beyond three months could attract recovery of interest from the defaulting officers responsible.

Laminating Plastic Films Qualifies as Manufacture: CESTAT Allows CENVAT Credit, Quashes ₹1.37 Crore Excise Demand

M/s Kapoor Print Pack India P Ltd vs Commissioner of CentralExcise

2025 TAXSCAN (CESTAT) 1014

Kapoor Print Pack India Pvt. Ltd., the appellant, manufactures printed plastic laminated rolls. They availed CENVATcredit on duty-paid inputs and used this credit to discharge duty on their finished products. A show cause notice was issued in December 2009 proposing to deny credit of Rs. 1.37 crore utilized between May 2007 and May 2008.

The two-member bench comprising Justice Dilip Gupta, President, and Member (Technical) observed that the department had accepted the appellant’s duty payments through ER-1 returns and never objected during the relevant period.

The tribunal explained that later rulings, unlike Metlex India, recognized lamination and metallization as manufacture, producing distinct marketable products. It pointed out that the department’s case failed to address how to treat the excise duty already paid on final products.

Commissions Paid by Indian Railways Before 1 October 2012 Not Subject to Service Tax: CESTAT Quashes Order

M/S INDIAN NORTHERN RAILWAYS vs COMMISSIONER OF SERVICETAX-DELHI

2025 TAXSCAN (CESTAT) 1015

Indian Northern Railways, appellant-assessee, disputed the service tax on commissions paid to overseas agents for selling Indrail passes to foreign tourists. Show cause notices were issued for the period 1 April 2010 to 31 March 2011.

The two member bench comprising P.Dinesha (Judicial Member) and P.Anjani Kumar (Technical Member) reviewed the case records and found that the Commissioner (Appeals) had wrongly tried to differentiate between services provided by the Railways and services received under the RCM.

The appellate tribunal observed that under RCM, the service recipient is deemed to have provided the service, making such a distinction invalid. Referring to its earlier Final Order No. 53814/2015 dated 8 December 2015, the tribunal confirmed that services provided by the Railways before 1 October 2012 were not taxable.

Setback for HDFC: CESTAT Rules Imported Rectangular Gold Pieces are Not Coins, Concessional Duty Benefit Denied

M/s HDFC Bank Ltd vs Commissioner of Customs Hyderabad – Customs

2025 TAXSCAN (CESTAT) 1016

HDFC Bank regularly imports gold, including coins, through various ports. Under the notification, gold bars with engraved serial numbers and gold coins attract concessional duty. In 2005 and 2006, HDFC imported rectangular-shaped gold pieces through Hyderabad and claimed the concessional rate.

The tribunal explained that the requirement of engraved serial numbers was mandatory for bars and the imported pieces did not meet this condition, so they fell under the higher duty category.

The tribunal pointed out that exemptions must be read strictly, and where no ambiguity exists, relief cannot be granted by stretching definitions. The appeal was dismissed.

Setback for FedEx: CESTAT upholds ₹1 Lakh Penalty for Lack of Due Diligence after Red Sandalwood Misdeclared as Copper Wire

FedEx Express Transportation and Supply Chain Services India PvtLtd vs Commissioner of Customs

2025 TAXSCAN (CESTAT) 1017

FedEx had filed two shipping bills in October 2019 declaring copper wires valued at ₹10,000 and Rs. 20,000. On x-ray screening, the consignments appeared suspicious and were later confirmed by a Wildlife Inspector to contain sandalwood logs weighing over 90 kilograms.

The single-member bench comprising Dr. Rachna Gupta (Judicial Member) observed that the consignments were collected from an address different from the exporter’s declared address, and the exporter was not found at the KYC location.

It also observed that one consignment contained no copper at all but only red sandalwood, showing lack of proper due diligence. The tribunal explained that FedEx, being the registered courier, could not shift responsibility onto its agents and remained liable for compliance under the Customs Act and CIER, 2010.

CESTAT Rules Matrimonial Services Before July 2012 Not Classifiable as OIDAR but as Composite Services Exempt from Service Tax

M/s. KM Wedding Events Management Private Limited vsCommissioner of GST and Central Excise

2025 TAXSCAN (CESTAT) 1018

KM Wedding Events Management Pvt. Ltd., formerly KM Matrimony Pvt. Ltd., offered matchmaking services through different packages, including print advertisements, web access to profiles, and personalised consultancy. The department classified the web-based components as OIDAR and demanded service tax for the period April 2009 to June 2012.

The two-member bench comprising P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that matrimonial services were composite, combining print, OIDAR, and consultancy.

They observed that vivisection of composite services was not permissible, and the essential character of the service was matrimonial. The tribunal further observed that the investigation itself was triggered by the appellant’s letters and the demand was based on their own records, showing no suppression.

Relief for Videocon D2H: CESTAT Rules Viewing Cards Are Smart Cards, Not Set-Top Box Parts, Quashes Customs Demand

M/s Videocon D2H Limited vs Additional Director General

2025 TAXSCAN (CESTAT) 1019

Videocon D2H Limited, now Dish TV Ltd., had imported viewing cards between July 2013 and March 2018 through Delhi and Mumbai Air Cargo Complexes, classifying them as smart cards under Customs Tariff Item 8523 52 90.

The Directorate of Revenue Intelligence (DRI) alleged that the goods were misclassified and should have been treated as parts of set-top boxes under CTI 8529 90 90, making them ineligible for exemption.

The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that classification is part of assessment and that acceptance by customs officers at the time of clearance could not later be treated as misdeclaration.

Interest Mandatory on Amounts Payable under Provisional Assessment but Not Paid on Due Date: CESTAT in BHEL Case

M/s. Bharat Heavy Electricals Ltd vs Principal Commissioner ofCGST

2025 TAXSCAN (CESTAT) 1020

Bharat Heavy Electricals Ltd. (BHEL) had sought a provisional assessment of excisable goods supplied to customers other than Indian Railways, since its contracts carried a price variation clause that could increase or reduce the final price. Between April 2012 and June 2017, BHEL deposited a differential duty of Rs. 22.97 crore before the final assessment was completed.

The two-member bench comprising Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) observed that the later Supreme Court ruling in SAIL was binding. They observed that because the contracts included a price variation clause, the liability for differential duty related back to the date of removal, and interest was chargeable under the law.

The tribunal explained that the argument that advance payment of duty shields the assessee from interest was not sustainable in light of the binding Supreme Court ruling. It upheld the Commissioner (Appeals)’ order and dismissed BHEL’s appeals.

Free Accommodation and Reimbursements to CISF Personnel Not Taxable as Consideration for Security Services: CESTAT

The Commandant CISF vs Commissioner of Central Excise

2025 TAXSCAN (CESTAT) 1021

The Commandant, CISF, had appealed against an order confirming a service tax demand of Rs. 1.77 crore along with interest and penalty for the period October 2011 to June 2012. The department argued that the housing facilities and other reimbursements extended by RINL to CISF personnel amounted to additional non-monetary consideration under Section 67(1)(ii) of the Finance Act, 1994, and were liable to service tax.

The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) observed that the demand arose from a periodical show cause notice following an earlier one, which had already been decided in favour of CISF in May 2024. The tribunal observed that the matter was no longer open to dispute, as the issue had already been settled.

The tribunal explained that since the earlier demand had been set aside, the subsequent demand could also not survive on similar grounds. The impugned order was quashed, and the penalty was also set aside. The appeal was allowed in favour of CISF.

Sugar Syrup Used in Biscuit Production Not Marketable, Hence Not Excisable: CESTAT

Modern Bakers (Madras) Pvt. Ltd vs Commissioner of GST &Central Excise

2025 TAXSCAN (CESTAT) 1022

Modern Bakers (Madras) Pvt. Ltd., the appellant, manufactures biscuits on job work basis. In the process of production, sugar invert syrup emerged as an intermediate product which was consumed within the factory. Biscuits were exempted from excise duty under Notification No. 3/2007-CE dated 1 March 2007.

The department issued a show cause notice demanding Rs. 4,97,455 as duty, along with interest and penalty, on the ground that sugar syrup was specified in the Central Excise Tariff and was liable to duty when captively consumed. The adjudicating authority confirmed the demand, and the Commissioner (Appeals) upheld it. Aggrieved, the appellant approached the tribunal.

The two-member bench comprising Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) observed that merely because sugar syrup is listed in the tariff does not establish its marketability.

Free Accommodation and Reimbursements to CISF Personnel Not Taxable as Consideration for Security Services: CESTAT

The Commandant CISF vs Commissioner of Central Excise &Service Tax

2025 TAXSCAN (CESTAT) 1023

The Commandant, CISF, had appealed against an order confirming a service tax demand of Rs. 1.77 crore along with interest and penalty for the period October 2011 to June 2012. The department argued that the housing facilities and other reimbursements extended by RINL to CISF personnel amounted to additional non-monetary consideration under Section 67(1)(ii) of the Finance Act, 1994, and were liable to service tax.

The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) observed that the demand arose from a periodical show cause notice following an earlier one, which had already been decided in favour of CISF in May 2024. The tribunal observed that the matter was no longer open to dispute, as the issue had already been settled.

The tribunal explained that since the earlier demand had been set aside, the subsequent demand could also not survive on similar grounds. The impugned order was quashed, and the penalty was also set aside. The appeal was allowed in favour of CISF.

Foreign Currency Different From Baggage, Tribunal Can Entertain Appeal: CESTAT Orders Release of Seized Currency, Directs to Reduce Penalties on Family Members

BHAVIKA PALA vs C.C. AHMEDABAD

2025 TAXSCAN (CESTAT) 1024

Foreign currency exceeding permissible limits was detected in possession of members of the Bhavika Pala family while traveling abroad. The customs authorities treated the case as an attempted illegal export and ordered absolute confiscation along with penalties.

On appeal, the Tribunal first addressed the preliminary objection regarding its jurisdiction to decide such matters. Referring to the Principal Bench’s decision in Pawan Munjal vs Commissioner of Customs, New Delhi, 2024, the Tribunal clarified that the term “currency” under the Baggage Rules, when read with the definition of “goods” under the Customs Act, 1962, excludes foreign currency. Accordingly, CESTAT held that it had the jurisdiction to adjudicate disputes involving foreign currency seizure.

The bench of Somesh Arora, disposed of the appeal stating that while confiscation may be justified for regulatory violations, absolute confiscation of currency is disproportionate since it is not contraband. It directed that the seized currency be released on payment of redemption fine, with the fine amount linked to the potential profit margin, generally limited to commissions charged by authorized dealers, rather than speculative gains.

Penalties under Sections 76 and 78 of Finance Act cannot be Imposed Simultaneously: CESTAT sets aside Penalty u/s 76

Khs Machinery Pvt Ltd VS Principal Commissioner, CGST &Central Excise

2025 TAXSCAN (CESTAT) 1025

M/s KHS Machinery Pvt. Ltd., the appellant is engaged in services including erection, commissioning, installation, business auxiliary, goods transport agency, and intellectual property rights.

During the audit, authorities discovered that the appellant had availed business support services from a German consultant without discharging service tax under the reverse charge mechanism. A show cause notice was issued demanding service tax of ₹32.72 lakh with interest, along with penalties under Sections 76, 77, and 78.

Noting that the appellant had already discharged service tax and interest, the bench of Ajaya Krishna Vishvesha (Judicial member) and Satendra Vikram Singh (Technical member) held that their case fell squarely within the settled jurisprudence and ordered deletion of the penalty under Section 76. However, the penalty under Section 78, being equal to the tax evaded in cases of suppression, was sustained.

Cum-Duty Benefit Dispute Rendered Infructuous: CESTAT Dismisses Departmental Appeal in Excise Duty Case

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX vs ORCHIDCHEMICALS & PHARMACEUTICALS LTD

2025 TAXSCAN (CESTAT) 1026

The Bench comprising of Dr. Suvendu Kumar Pati, Judicial Member and Anil G. Shakkarwar, Technical Member observed that the legality of the show cause notice itself had been decided in the assessee’s earlier appeal, where it was held that the purification of mixed solvents did not amount to manufacture under Section 2(f) of the Central Excise Act, 1944.

The Tribunal noted the demand itself was held to be unsustainable, the issue of extending or denying cum-duty benefit became infructuous.

Accordingly, the Bench dismissed the Department’s appeal.

Profit Margin on Land Sales Not Commission as Landowners Paid No Agency Fee: CESTAT Sets Aside Service Tax Demand

M/s. Tiwari Sons Construction Private Limited vs Commissioner ofCentral Excise and Service Tax

2025 TAXSCAN (CESTAT) 1027

Tiwari Sons Construction Pvt. Ltd., the appellant, was issued a show cause notice alleging that it acted as a real estate agent and earned commission of about Rs. 7.01 crores from land transactions. The department treated this margin as commission under “Real Estate Agent Services” and raised a service tax demand of Rs. 82,61,976 with interest and penalties.

The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that landowners were entitled only to fixed amounts under the agreements and did not share in profits. The bench observed that there was no agreement for agency commission and no consideration was paid by landowners. It explained that the appellant functioned as an independent developer taking full risk of profit or loss and not as an agent.

The tribunal set aside the service tax demand of Rs. 82,61,976 under “Real Estate Agent Services,” holding that the profit margin on land sales was not commission.

Export Duty Cannot be Levied When SEZ Unit Lawfully Exports Goods from Approved Warehouse: CESTAT

Parry Sugars Refinery India Pvt Ltd vs Commissioner of Customs

2025 TAXSCAN (CESTAT) 1028

Parry Sugars Refinery India Pvt. Ltd., the appellant, operates a unit in the Special Economic Zone (SEZ) at Kakinada and imports raw sugar duty-free for refining and export. Because of space shortages at its premises, the appellant stored consignments in a private bonded warehouse called ATR.

In 2016, Customs authorities alleged that 14,000 MT of raw sugar was exported directly from ATR instead of the SEZ unit and demanded export duty of Rs. 8.74 crores. They also alleged diversion of 1073.3 MT of sugar without proper documents and raised import duty and penalty demands.

The tribunal explained that the 14,000 MT of sugar was legitimately exported and the demand of export duty could not be sustained. With respect to the 1073.3 MT of sugar moved without documents, the tribunal observed that the lapse was procedural and not fraudulent but upheld confiscation with a reduced redemption fine.

CENVAT Credit Cannot Be Denied Merely Because Aluminium Ingots Process Is Not Manufacture If Duty Has Been Paid: CESTAT

M/s Finix Corporation vs C.C.E. & S.T

2025 TAXSCAN (CESTAT) 1029

The case arose from an appeal filed by Finix Corporation against the order of the Commissioner (Appeals), Rajkot, which had upheld the department’s demand for reversal of CENVAT credit along with interest and penalty.

The single-member bench comprising Justice Somesh Arora observed that the Commissioner (Appeals) failed to consider the binding precedent laid down in Creative Enterprises. The tribunal pointed out that the department cannot treat the process as a manufacture for collecting duty and at the same time deny the credit on the ground that no manufacture had taken place.

The tribunal explained that the issue must be re-examined in light of the Gujarat High Court’s decision to determine whether the duty payment created any distortion in the credit chain.

Sub-contractor Not Liable for Service Tax When Principal Contractor Has Already Paid on the Entire Contract Value: CESTAT

Friendship Water Proofing vs Commissioner, CGST & CentralExcise

2025 TAXSCAN (CESTAT) 1030

The case arose from an appeal filed by Friendship Waterproofing against the order of the Commissioner (Appeals), Lucknow, which had confirmed a service tax demand of Rs. 46,99,844 along with interest and penalties.

The department alleged that the appellant, acting as a sub-contractor for U.P. Rajkiya Nirman Nigam Ltd. (UPRNN), failed to pay service tax on waterproofing services rendered during the financial years 2015-16 and 2016-17.

The single-member bench comprising Judicial Member P.K. Choudhary observed that UPRNN had already discharged service tax on the entire contract value, as verified by certificates issued by its various divisions.

Redeployment of Auxiliary Equipment After Project Completion Not a Violation, Circulars Cannot Override Project Import Regulations Act: CESTAT

Ajay Garg vs Commissioner of Excise Customs

2025 TAXSCAN (CESTAT) 1031

The case arose from appeals filed by Vishesh Kumar Walia and others against the order passed by the Commissioner of Customs (Import), Mumbai, demanding customs duty, interest, and imposing penalties under the Customs Act, 1962.

The department alleged that the appellants had breached the conditions of exemption by transferring five piling rigs imported under the Project Import Scheme to another project after completion of the Indira Gandhi Super Thermal Power Project at Jhajjar.

The two-member bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) observed that Heading 9801 of the Customs Tariff and the Project Import Regulations, 1986, do not contain any restriction on the redeployment of auxiliary equipment after completion of the project.

Income from Freight Trading, Discounts, and Reimbursements Not Taxable as Service: CESTAT

SHINE TRAVELS & CARGO PVT LTD vs PRINCIPAL COMMISSIONER

2025 TAXSCAN (CESTAT) 1032

Shine Travels & Cargo Pvt. Ltd., the appellant, is engaged in facilitating export and import shipments as an agent for local exporters, importers, and international freight forwarders.

Based on an investigation, the department alleged that the appellant had failed to discharge full service tax liability on certain income components and issued five show cause notices for the financial years 2007-08 to 2015-16, demanding service tax exceeding Rs. 23 crore, along with interest and penalties under Sections 76, 77, and 78 of the Finance Act.

The bench comprising P.V. Subba Rao (Technical Member) and Binu Tamta (Judicial Member) accepted the appellant’s submissions. The tribunal observed that freight and incidental charges related to trading activity and not service provision.

Clandestine Removal Must Be Established with Clear and Corroborated Evidence: CESTAT Rules Private Records, Unverified Shortages Insufficient

M/s. Everest Aluminium Pvt. Ltd vs Commissioner of CGST AndCentral Excise

2025 TAXSCAN (CESTAT) 1033

Everest Aluminium Pvt. Ltd., the appellant, is engaged in the manufacture of aluminium circles. A search was conducted at its premises by the anti-evasion unit, which allegedly revealed shortages of inputs and finished goods, along with recovery of handwritten note pads and private records.

Based on these findings, the department issued a show cause notice alleging clandestine removal of goods without payment of duty and confirmed a demand of Rs. 1.75 crore with interest and penalty. The Commissioner (Appeals) upheld the demand, and the appellant approached the tribunal.

The tribunal set aside the demand of Rs. 1.75 crore along with interest and penalty and allowed the appeal with consequential relief, holding that mere suspicion based on untested records and statements cannot sustain a charge of clandestine removal.

Relief for Eastern Coalfields: CESTAT Rules Recovery of Liquidated Damages from Suppliers for Breach of Contract Not Declared Service

M/s Eastern Coalfields Limited vs Commr. of CGST & CentralExcise

2025 TAXSCAN (CESTAT) 1034

Eastern Coalfields Limited, the appellant, deducted liquidated damages from the invoices of suppliers who failed to meet contractual terms. The department treated such deductions as consideration for “tolerating an act” under Section 66E(e) and issued a show cause notice demanding service tax for the period 2013-14 to 2015-16.

The adjudicating authority confirmed the demand, which was later upheld by the Commissioner (Appeals). Aggrieved by the decision, the appellant approached the tribunal.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) accepted the appellant’s arguments. The tribunal observed that the issue is already settled by earlier decisions and clarified by CBIC.

Relief for Suzuki Motors: CESTAT Rules Expenses on Pre-Delivery Inspection and After-Sale Services Not Part of Assessable Value for Excise Duty

M/s Suzuki Motorcycle India Private Ltd. vs Commissioner ofCentral Goods and Service Tax

2025 TAXSCAN (CESTAT) 1035

Suzuki Motorcycle India Pvt. Ltd., the appellant, is engaged in the manufacture and sale of two-wheelers and their parts. The vehicles were sold to dealers at an ex-factory price on which excise duty was paid.

The tribunal explained that the transaction value under Section 4 of the Central Excise Act is the price paid by the dealer to the manufacturer, and no further addition can be made without proof of extra consideration.

The tribunal set aside the Commissioner’s order, holding that the reimbursements for PDI and after-sales services cannot be added to the assessable value. The appeal was allowed with consequential relief to the appellant.

Telecom Operators Entitled to CENVAT Credit on Towers and Shelters as Capital Goods/Inputs: CESTAT in Bharti Airtel Case

M/s Bharti Airtel Limited vs Commissioner of Service Tax

2025 TAXSCAN (CESTAT) 1036

Bharti Airtel Limited, the appellant, is engaged in providing telecommunication and cellular mobile network services using both active infrastructure such as Base Station Controllers and antennas, and passive infrastructure such as towers and prefabricated buildings.

The department disputed the availment of CENVAT credit on towers, shelters, and related services, alleging that they were immovable property and not eligible for credit under the CENVAT Credit Rules, 2004.

Multiple show cause notices were issued for the period from October 2003 to March 2009, and the adjudicating authority confirmed the demands with interest and equal penalties. Aggrieved, the appellant approached the tribunal.

CESTAT Remands Service Tax Dispute on Construction Services for Fresh Computation of Demand

Kantibhai Rajabhai Ukani vs Commissioner of CGST & CentralExcise-Surat-I

2025 TAXSCAN (CESTAT) 1037

The appeal was filed by Kantibhai Rajabhai Ukani, proprietor of a construction concern in Surat, against the order of the Commissioner (Appeals), Surat, which had upheld the adjudication order confirming a demand of ₹39,54,007 in service tax, interest, and penalties under Sections 77 and 78 of the Finance Act, 1994.

The case arose after the Department's investigation revealed that the appellant had provided services during 2009-10 to December 2013, as reflected in balance sheets, TDS statements (Form 26AS), and work orders, without taking service tax registration, filing returns, or paying tax.

The Bench comprising Judicial Member, Somesh Arora and Technical Member, Satendra Vikram Singh after examining submissions and records, observed that the appellant had indeed admitted to suppression of taxable value, non-registration, and non-payment of tax. The Bench noted that services provided directly to government departments and Surat Municipal Corporation had already been treated as non-taxable in the show cause notice.

Lease Rentals Not Taxable as Port Services Prior to June 2007: CESTAT Sets Aside Service Tax Demand on Kolkata Port Trust

M/s Kolkata Port Trust vs Commissioner of CGST & CentralExcise

2025 TAXSCAN (CESTAT) 1038

The Tribunal set aside the demand of service tax, interest, and penalties raised against the appellant, holding that the activity would be taxable only under the category of “Renting of Immovable Property Services,” which was introduced into the service tax net from June 1, 2007.

The appellant, M/s Kolkata Port Trust, a registered trust under the Major Port Trusts Act, 1963, had allotted vacant land parcels and sheds within the port area to stevedores on a license basis during the period April 2004 to March 2007. The licensees used these areas for storing import and export goods of their clients.

The Bench comprising of Judicial Member, R. Muralidhar and Technical Member, Rajeev Tandon observed that the activity in question was merely renting of immovable property and not the provision of storage or cargo handling services.

Penalty Quantum u/s 114A for Misdeclared Fabric Consignment: CESTAT directs Reassessment in Customs Duty Dispute

Commissioner of Customs vs M/s. Roshan Overseas

2025 TAXSCAN (CESTAT) 1039

M/s. Roshan Overseas, the importer, had filed a Bill of Entry dated 10.04.2012 for 645 bales of fabric. The Commissioner of Customs, Tuticorin, through Order-in-Original No. 27/2014 dated 28.03.2014, found that the goods were misdeclared, misclassified and undervalued, attracting confiscation under Section 111(m) of the Customs Act, 1962.

The Bench comprising Judicial Member, Ajayan T.V. and Technical Member, Vasa Seshagiri Rao, observed that the imposition of a combined penalty under Sections 112(a)(v), 114A, and 114AA by the Adjudicating Authority reflected non-application of mind, especially in view of the statutory bar on overlapping penalties.

The Bench held that penalties under these provisions are distinct and must be imposed with due regard to the facts and relevant judicial precedents.

CESTAT Upholds Service Tax Demand on Manpower Supply Services

Shanti Beem Friends Educated Unemployed Co-operative Society Ltdvs Commissioner of Central Tax

2025 TAXSCAN (CESTAT) 1040

The appeals were filed by Shanti Beem Friends Educated Unemployed Co-operative Society Ltd., Rajahmundry, against two Orders-in-Appeal dated 26 July 2012 and 30 August 2012 passed by the Commissioner of Customs, Central Excise and Service Tax (Appeals), Visakhapatnam.

The dispute arose when M/s. Oil and Natural Gas Corporation Ltd. (ONGC) informed the Department that the appellant society was engaged in supplying contract workers but was not discharging service tax on the amounts received. The Department observed that the activity fell within the scope of “Manpower Recruitment or Supply Agency Service” under Section 65(105)(k) of the Finance Act, 1994.

The bench rejected the appellant’s plea that wages and statutory contributions should be excluded, observing that ONGC’s payments were to the service provider for overall manpower services, not reimbursements. The Tribunal noted the absence of bifurcated records demonstrating separate treatment of wages and statutory dues.

CESTAT Restores Licence with Reduced Penalty in GST-linked Export Fraud

M/s. Shuvam Enterprises vs Commr. of Customs

2025 TAXSCAN (CESTAT) 1041

M/s Shuvam Enterprises, a licensed customs broker, had facilitated clearance of four consignments of vitrified tiles in April 2018 for Neeraj Marble & Tiles, Siliguri, intended for export to Bhutan. Investigations later revealed that 29 consignments declared for export were never physically exported and were instead diverted into the Indian market. Four of these consignments were handled by the appellant.

The Tribunal also observed that the case involved breach of Section 50(2) and Section 50(3) of the Customs Act, 1962, since fraudulent declarations were made in shipping bills. These findings corroborated the department’s case that the broker violated obligations under Regulation 10.

However, citing the Delhi High Court decision in Asthiana Corporation Services v. Commissioner of Customs, IGI Airport (2014), the bench emphasized that punishment must be proportionate. The Tribunal noted that since the licence had already remained revoked for more than two years, depriving the broker of livelihood, complete revocation was deemed excessive.

Confiscation of 22,120 Kgs of Smuggled Black Pepper Upheld: CESTAT Reduces Penalty under Customs Law

Shree Praveen Kasera vs Commr. of Customs (Preventive)

2025 TAXSCAN (CESTAT) 1042

The appeal was filed by Shree Praveen Kasera, proprietor of Shri Radhey Sales Corporation, Delhi, challenging Order-in-Original No. CCP/NER/21/2020 dated 19 November 2020 passed by the Commissioner of Customs (Preventive), Shillong.

The case arose from specific intelligence received by Customs authorities that two trucks were transporting black pepper of foreign origin without lawful documents. On 30 April 2019, officers intercepted two vehicles loaded with 212 and 144 HDPE/jute bags concealed under flattened cartons.

The Bench comprising of R. Muralidhar, Judicial Member and Rajeev Tandon, Technical Member, held that the smuggled nature of the black pepper was conclusively established. The bench observed that the appellant’s claim of dealing with an untraceable broker was a “clever ploy” and demonstrated mens rea, especially since he voluntarily approached Customs about the seized consignment without being formally informed of it.

Refund of Unutilized Cenvat Credit on Closure of Factory Not Permissible: CESTAT Rejects Motonic India Automotive’s Appeal in Excise Dispute

Motonic India Automotive Pvt. Ltd. vs Commissioner of GST &Central Excise

2025 TAXSCAN (CESTAT) 1043

The Appellant, Motonic India Automotive Pvt. Ltd., a manufacturer of motor vehicle parts falling under Chapter 87 of the Schedule to the Central Excise Tariff Act, 1985, had ceased its manufacturing operations from 31 January 2015. At the time of closure, the company had an accumulated Cenvat credit balance of ₹18,74,68,939 on inputs, input services and capital goods. Since there was no possibility of utilising the accumulated credit, the company filed a refund application under Section 11B of the Central Excise Act, 1944.

The Tribunal, comprising Ajayan T.V., Judicial Member and M. Ajit Kumar, Technical Member, held that neither clause (c) nor clause (d) of the proviso to Section 11B(2) of the Central Excise Act, 1944, permits refund of unutilized Cenvat credit on account of closure of manufacturing operations. It ruled that Rule 5 of the Cenvat Credit Rules, 2004 allows cash refund only in cases of export of goods or services and does not extend to closure situations.

Accordingly, CESTAT upheld the decision of appellate authority rejecting the claim.

Service Tax Paid by Mistake on Residential Construction Treated as Revenue Deposit: CESTAT Orders 12% Interest on Refund

Gajendra Singh Sankhla vs Commissioner of CGST

2025 TAXSCAN (CESTAT) 1044

There were three separate appeals filed by Gajendra Singh Sankhla, I.P. Singh Construction Co., and P.S. Builders. However, since all the appeals involved a common issue regarding refund of service tax paid on construction of individual residential units, the Tribunal consolidated them and disposed of the matters by a common order.

The appellant, Gajendra Singh Sankhla, had deposited service tax on construction of individual residential houses during the periods 2012-2013 and 2014-2015. Later, relying on Notification No. 25/2012-ST dated 20.06.2012, he claimed refund since such construction was not taxable prior to 01.07.2012 and was exempt thereafter.

The Bench comprising of Judicial Member, Ashok Jindal observed that since the service tax was paid by mistake on exempt activities, the amount was not “tax” but a revenue deposit. Therefore, Sections 11B and 11BB of the Central Excise Act, 1944, had no application.

Service Tax Demand of ₹87.76 Lakh on Mutual Fund Investments Quashed: CESTAT Rules Activity Not “Trading of Goods” under Finance Act

M/s. Career Point Limited vs Commissioner of Central Goods &Service Tax, Excise and Customs

2025 TAXSCAN (CESTAT) 1045

The appellant, M/s Career Point Limited, engaged in providing multiple taxable services such as manpower recruitment, commercial training and coaching, renting of immovable property, works contracts, and legal consultancy, was subjected to a show cause notice dated 14.09.2017.

The Bench comprising Judicial Member, Binu Tamta and Technical Member, Hemambika R. Priya held that the activity of subscription and redemption of mutual funds does not amount to trading of goods and cannot be considered an “exempted service” under Section 66D(e) of the Finance Act, 1994.

The Tribunal emphasized that for an activity to fall within “exempted service,” it must first qualify as a “service” as defined under Section 65B(44) of the Finance Act. Since investment in mutual funds does not involve the rendering of a service for consideration, it does not fall within the statutory definition.

Liquidated Damages Not Taxable as Declared Service: CESTAT Allows Gujarat Industries’s Appeal on Service Tax Demand

COMMISSIONER OF CGST & CENTRAL EXCISE, SURAT vs GujaratIndustries Power Company Ltd.

2025 TAXSCAN (CESTAT) 1046

The case arose out of investigations initiated by the Directorate General of Goods and Services Tax Intelligence (DGGI), Surat Zonal Unit, against Gujarat Industries Power Company Limited (GIPCL), covering both its Surat Lignite Power Plant and Vadodara unit. The department found that the company had recovered liquidated damages and penalty charges from contractors and suppliers for delayed or deficient performance but had not discharged service tax on such recoveries.

The bench comprising Judicial Member, Somesh Arora and Technical Member, Satendra Vikram Singh held that the issue of levy of service tax on liquidated damages is no longer res -integra. Referring to earlier rulings, including Gujarat State Electricity Corporation Ltd. (2024) and South Eastern Coalfields Ltd. (2020), the Tribunal observed that liquidated damages are in the nature of compensation for breach of contract and cannot be treated as consideration for any service under Section 66E(e). It emphasised that penalty clauses in contracts are merely safeguards for commercial interests and cannot amount to agreements to provide taxable services.

Accordingly, the Tribunal allowed the appeal filed by GIPCL, Vadodara, setting aside the demand of ₹4,28,32,174.

No Service Tax Applicable on “Cleaning Service” Provided to Railway Prior to 01.07.2012: CESTAT sets aside Demand

M/s Khagaul Labour Co Operative Society Ltd. vs Commr. ofCentral Excise & Service Tax

2025 TAXSCAN (CESTAT) 1047

The appellant, M/s Khagaul Labour Co-operative Society Ltd had undertaken mechanised and manual cleaning, sanitation, and upkeep of railway stations in the Samastipur Division under contracts with the Eastern Railways.

The Tribunal, comprising Mr. R. Muralidhar (Judicial Member) and Mr. K. Anpazhakan (Technical Member), after examining the statutory definition and precedents including R.K. Refreshments & Enterprises Pvt. Ltd. v. CCE, Raipur and P. Siva Prasad v. CCE, Hyderabad-III, held that railway stations, coaches, and platforms cannot be regarded as “commercial or industrial buildings.”

In the case of P. Siva Prasad v. CCE, Hyderabad-III, the tribunal held that “Service Tax confirmed in the impugned order for the period up to 30.06.2012 under the category of “cleaning service” is not sustainable and hence we set aside the same.”

Freight Forwarder Not Liable for Service Tax When Acting as Principal for Goods Exported Outside India: CESTAT

Shri Santosh Kumar Tiwari vs Commissioner of Central Excise& CGST

2025 TAXSCAN (CESTAT) 1048

Santosh Kumar Tiwari, appellant-assessee, received a Show Cause Notice based on third-party information from the Income Tax Department. It was noted that he declared gross receipts of Rs. 97,32,640/- for FY 2016-17 but had not registered under the Service Tax Act or filed ST-3 returns.

The Show Cause Notice (SCN) sought to recover Service Tax of Rs. 14,59,896/- with interest and proposed penalties under Sections 77 and 78 for non-registration, non-filing of returns, suppression of facts, and failure to provide documents.

It observed that the main service was transportation of goods to a foreign destination, and under Rule 10 of the Place of Provision of Services Rules, 2012, the place of service was outside India. Accordingly, Service Tax was not leviable, and the appeal was allowed with consequential relief, if any.

Electronic Download of Software Not Liable to Customs Duty: CESTAT Rules in HCL Technologies Case

HCL Technologies Ltd. vs Commissioner of Customs

2025 TAXSCAN (CESTAT) 1049

HCL Technologies Ltd., the appellant, is engaged in providing software-led IT solutions and remote infrastructure management services. To carry out these operations, HCL entered into an End-User License Agreement (EULA) with SAP India Pvt. Ltd. for a non-exclusive license to use SAP’s proprietary software.

The agreement provided for software delivery primarily through electronic download, with the option of receiving physical CDs only upon request.

The tribunal pointed out that the primary mode of software delivery in this case was electronic download, and no physical import took place.

Sand Lime Bricks is Type of Fly Ash Bricks, Eligible for Excise Exemption: CESTAT Quashes Excise Duty Demand of Rs. 2.6 crores

M/s. Omkar Infracon Private Limited vs Commissioner of CentralTax

2025 TAXSCAN (CESTAT) 1050

The Tribunal found merit in the appellant’s submissions and relied on its earlier decision in Commissioner of CGST & C. Ex., Howrah v. Aum Bricks & Pavers Pvt. Ltd., where it was held that sand lime bricks are a type of fly ash bricks and both are covered under the exemption notification.

The bench of R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical member) observed that “the appellant-company manufactures sand lime bricks, which is a type of fly ash bricks. It is seen that both sand lime bricks and fly ash bricks are classifiable under the Chapter 68 only. We find that there is no other tariff sub-heading available in the Central Excise Tariff which provides classification of sand lime bricks.”

“Accordingly, we hold that the demand of central excise duty of Rs. 2,67,83,024/- confirmed in the impugned order is not sustainable”, ruled the bench.

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