Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 24)

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

CESTAT Rules Excavation and Manpower Services for Dam Construction Exempted from Service Tax

M/s Austees Hydro Power & Construction Co Pvt Ltd vsCommissioner of Central Excise and Central Goods & Service Tax, Shimla 2025 TAXSCAN (CESTAT) 1251

The appellant, Austees Hydro Power & Construction Co. Pvt. Ltd., a subcontractor to Italian Thai Development Public Company Ltd. (ITD), carried out excavation of clay, loading, transportation, unloading and spreading of material at the Koldam Hydroelectric Project, along with cleaning and caulking work at the dam, spillway and galleries.

ITD was the main contractor of National Thermal Power Corporation Limited (NTPC) for the construction of the Koldam Hydro Electric Power Project on the Satluj River.

The Bench comprising S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) found that the activities of excavation, loading, transportation, unloading and cleaning work at the Koldam dam were specifically exempted under Notification No. 17/2005-ST and continued to remain exempt under the later Negative List regime.

BIS Mark Not Mandatory for Imports Shipped Before QCO Effective Date: CESTAT Sets Aside Penalty

MA Trading Company vs Commissioner of Customs, Ahmedabad 2025 TAXSCAN (CESTAT) 1252

The Tribunal consequently set aside the confiscation under Section 111(d) and penalty under Section 112(a) of the Customs Act, 1962.

The appellant, M A Trading Company, imported Stainless Steel Cold Rolled Coils (Grade-201) under Bill of Entry dated 16.02.2017. The Department insisted on BIS certification as per Steel Order SO 2061(E) dated 10.06.2016, as amended by SO 2903(E) and SO 3649(E), which collectively brought the Quality Control Order into force from 07.02.2017.

Since the consignment lacked BIS marking, the Department treated the goods as prohibited, initiated adjudication, and ordered confiscation under Section 111(d), redemption fine of ₹8,43,000 along with a penalty of ₹4,45,000 under Section 112(a). The Commissioner (Appeals) upheld the order, leading to the present appeal.

POPS Rules Cannot Extend Finance Act to J&K: CESTAT Quashes Service Tax Demand on Telecom Infrastructure Services

Tower Vision India Private Limited vs Commissioner of CentralExcise, Goods & Service Tax - Gurugram 2025 TAXSCAN (CESTAT) 1253

The Bench set aside the service tax demand, interest, and penalties confirmed against appellant, a telecom infrastructure company operating tower sites in J&K.

The appellant, Tower Vision India Pvt. Ltd., provides Passive Infrastructure Support Services to telecom operators, including through its Jammu & Kashmir branch. The Department alleged that the company was liable to pay service tax under multiple taxable categories such as Business Support Service, Management & Consultancy Service, and Manpower/Security Services.

The Tribunal comprising S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) accepted the appellant’s position and held that it was an undisputed fact that the services and input services were both provided and consumed within J&K. The Bench observed that Chapter V of the Finance Act does not extend to J&K, therefore no service tax can be levied for activities occurring within the State.

No Service Tax on Offshore Seismic Surveys Conducted Beyond 12 Nautical Miles of Indian Waters: CESTAT

M/s Western Geco International Ltd vs The Commissioner,ServiceTax Commissionerate 2025 TAXSCAN (CESTAT) 1254

The assessee, M/s Western Geco International Ltd. (Geco), is a company incorporated in the British Virgin Islands with project offices in Gurugram and Mumbai, having centralised registration with the Service Tax Department in Gurugram.

A Bench comprising Dr. Rachna Gupta, Member (Judicial) and P.V. Subba Rao, Member (Technical), examined the contractual arrangements, which reflected a single consolidated engagement covering both offshore data acquisition and subsequent processing in the Mumbai project office.

The Tribunal also noted that the contracts were entered into exclusively with the foreign entity and all consideration was paid to its overseas bank account. The Indian project offices, though registered, neither rendered the contracted service nor received any consideration. Under Section 66A of the Finance Act, where the service provider is located outside India, service tax liability would rest on the service recipient under the reverse charge mechanism.

Business Auxiliary and Business Support Services Rendered to Foreign Entities Qualify as Export of Services: CESTAT Allows Appeal

YKK India Private Limited vs Commissioner of Central Excise,Goods & Service Tax, Rohtak 2025 TAXSCAN (CESTAT) 1255

The bench observed that the Commissioner had erred in interpreting the export provisions and relied upon interim orders that stood superseded by Larger Bench and Supreme Court decisions.

The appellant, YKK India Private Limited, engaged in the manufacture and sale of zippers and parts thereof, had been issued two show-cause notices for the periods 2006-07 to 2010-11 and 2011-12, demanding service tax of ₹68,59,980 and recovery of Cenvat Credit of ₹13,08,503 with interest and penalties.

The demands arose on four counts: classification of Business Auxiliary and Business Support services as non-export, levy on reimbursement of expenses, and denial of Cenvat Credit on input services used in trading activity.

CESTAT Dismisses Department’s Appeal Challenging Revocation of Customs Broker Licence Suspension as Infructuous

Commissioner of Customs vs M/s. OPMS Clearing and ForwardingAgencies Pvt. Ltd 2025 TAXSCAN (CESTAT) 1256

The Bench delivered the ruling while deciding Customs Appeal No. 41907 of 2017 arising out of Order-in-Original dated 25 May 2017 passed by the Commissioner of Customs, Chennai.

The Respondent, M/s. OPMS Clearing and Forwarding Agencies Pvt. Ltd., held Customs Broker Licence No. R-288/CHA, valid up to 14 March 2025. Based on intelligence received by the Directorate of Revenue Intelligence (DRI), it was alleged that certain importers were clearing multifunctional audio systems by mis-declaring them as computer peripherals and undervaluing goods to evade countervailing duty (CVD).

Investigations revealed that one Shri Govindasamy, Proprietor of M/s. Pranav Exim, was using the licence of the respondent Customs Broker for clearance of goods belonging to several importers, including M/s. V.M. Electronics and M/s. Goodwill Enterprises. The Customs Department held that such conduct amounted to a violation of Regulations 10, 11(a), 11(d), 11(e), and 11(n) of the CustomsBroker Licensing Regulations (CBLR), 2013, as the respondent had allegedly failed to verify importer credentials and had permitted an unauthorized person to act on its behalf.

Oppo Mobiles Entitled to Customs Duty Exemption on Imported Microphones & Receivers Used in PCBA: CESTAT

M/s. Oppo Mobiles India Pvt. Ltd. vs The Principal Commissionerof Customs (Import) 2025 TAXSCAN (CESTAT) 1257

The Appellant, Oppo Mobiles India Pvt. Ltd., engaged in the business of manufacture of cellular mobile phones and smartphones, had filed an appeal for an order dated 15.06.2020, passed by the Principal Commissioner of Customs, ACC (Imports), New Delhi, by which the exemption duty was rejected against the import of microphones and receivers.

The two-member Bench comprising Justice Dilip Gupta, President and P.V Subba Rao, Member (Technical) held that the amendments dated 02.02.2018 and 02.04.2018, did not alter the exemption for microphones and receivers used in PCBA manufacturing for cellular mobile phones.

The Tribunal further held that the amendment dated 06.07.2019 could not be applied retrospectively.

Pre-2015 Flight Ticket Reimbursements Not Subject to Service Tax: CESTAT Allows Refund for CA Firm

M/s. Guru & Ram vs Commissioner of GST & Central Excise 2025 TAXSCAN (CESTAT) 1258

M/s. Guru & Ram, Chartered Accountants, filed an appeal against Order, passed by the Commissioner of Service Tax (Appeals-II), challenging the inclusion of reimbursed flight ticket expenses in the taxable value of services for the period April 2010 to March 2011.

The Tribunal noted that Rule 5(1) treats expenditures incurred “in the course of” providing taxable services as part of consideration, with an exception under Rule 5(2) for pure agents. However, the Supreme Court in Intercontinental Consultants clarified that reimbursable expenses could only be included in taxable value post-May 2015.

Applying this principle, the two-member bench comprising Vasa Seshagiri Rao (Technical Member) and P. Dinesha ( Judicial Member) observed that the inclusion of client-reimbursed flight ticket expenses for the 2010–2011 period was inconsistent with the law as it stood then.

CESTAT classifies Micronutrient Fertilizers Containing N, P, K as Fertilizers, Rejects Plant Growth Regulator Classification

M/s KPR Fertilizers Ltd vs Commissioner of Central ExciseVisakhapatnam 2025 TAXSCAN (CESTAT) 1259

M/s KPR Fertilizers Ltd. filed appeals against the Order, challenging the classification of certain micronutrient fertilizers. The Commissioner (Appeals) had earlier upheld the classification but set aside the penalty imposed.

The key issue was whether the appellant’s products, cleared as Micronutrient Fertilizers (MNF), should be treated as fertilizers or as Plant Growth Regulators (PGRs).

The two-member bench comprising AK Jyotishi(Technical Member) and Angad Prasad (Judicial Member) observed that Chapter Note 6 does not restrict the role of N, P, or K in fertilizers to being “substantial” rather than essential, nor does it exclude their presence in chelated form.

No Service Tax on Installation Expenses w/o Evidence of Commission Agent being Reimbursed by Principals: CESTAT

M/s Link Well Electronics Pvt Ltd vs Commissioner Of CentralTax Medchal - GST 2025 TAXSCAN (CESTAT) 1260

M/s Link Well Electronics Pvt. Ltd., an entity based in Telangana acted as an agent for companies such as Ricoh India Ltd. and Motorola India Pvt. Ltd., assisting in sales, order procurement and related activities.

The proceedings emanated from show cause notices covering the period from 2005 to 2012, wherein the Department alleged the agent’s service tax liability under BusinessAuxiliary Services (BAS) as well as Erection, Commissioning orInstallation Services (ECIS).

The Bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) noted that the Department had failed to substantiate its allegation with any material showing that the assessee had received reimbursable amounts for installation. CESTAT further noted that Rule 5 of the Service Tax Valuation Rules, relied upon by the Department to include reimbursable expenses, had been declared ultra vires by the Supreme Court in Union of India vs Intercontinental Consultants & Technocrats Pvt. Ltd. (2018).

CESTAT Dismisses Customs Broker’s Appeal Challenging Prohibition Order as Infructuous Following Expiry of Registration

Getz Transport Logistics Pvt. Ltd. vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 1261

The Tribunal noted that the broker’s registration in the Mumbai Customs Commissionerate had expired, leaving no ongoing cause of action, and therefore, no interference with the original order was warranted.

The appellant, Getz Transport Logistics Pvt. Ltd., holding Customs Broker Licence No. R-520/CHA-Chennai, had extended operations to Mumbai Customs under CHA No. 11/1909 with validity up to 21.03.2024.

The Tribunal observed that, in light of these facts, the appeal challenging the prohibition order had become infructuous. There was no remaining cause of action, and therefore, no interference with the original prohibition order was warranted.

CESTAT Orders ₹11.07 Lakh Refund to Steel Strips Wheels, Recognises Foreign Port Services as Specified Services Under Amended Notification

M/s. Steel Strips Wheels Ltd. vs Commissioner of GST and CentralExcise 2025 TAXSCAN (CESTAT) 1262

The dispute revolved around whether services availed at foreign destinations, such as handling charges, destination charges, container handling, and warehouse fees, qualify for ra ebate under Notification No. 41/2012-ST dated 29 June 2012.

The Tribunal emphasised that judicial discipline requires consistency with its earlier rulings and those of other benches. It was also observed that the rebate scheme was intended to ensure exports remain tax-neutral, free from the burden of domestic duties and levies. Denying a rebate on services integrally tied to export delivery, even if performed abroad, would defeat this purpose.

Accordingly, the bench of Vasa Seshagiri Rao (Technical Member) set aside the Commissioner (Appeals)’ order and directed that Steel Strips Wheels Ltd. be granted the refund of ₹11,07,308/- along with consequential reliefs.

Rehabilitating or Renewing Railway Wagons Qualifies as “Original Works”, Exempt from Service Tax: CESTAT

M/s. Oscorp Industries Private Limited vs Commissioner ofC.G.S.T. and Central Excise 2025 TAXSCAN (CESTAT) 1263

The appeal was filed by M/s Oscorp Industries Pvt. Ltd., Howrah, against Order-in-Original passed by the Principal Commissioner of CGST & CX, Howrah, which confirmed a Service Tax demand of ₹2,09,91,709 for the period October 2013 to June 2017, along with interest and penalties.

The company, engaged in manufacturing and works contract services primarily for Indian Railways, had been providing wagon rehabilitation and renewal work under various contracts, including complete renewal of walls, flooring, and roofing of BOXN and BCN wagons.

CESTAT clarified that the extended period could not be invoked since all activities were undertaken for the Indian Railways, a government entity and the Department was fully aware of the facts through audits and earlier proceedings.

Ignorantia Juris Non Excusat: CESTAT says Plea Of Confusion No Defence, Upholds Service Tax on Work Contract

M/s Shri Mohmd. Shafik Contractor vs Commissioner ofCGST-Jodhpur 2025 TAXSCAN (CESTAT) 1264

The appellant, M/s Shri Mohmd. Shafik Contractor, is registered under Section 69 of the Finance Act, 1994 and provides works contract services. Under Notification No. 30/2012-Service Tax dated 20 June 2012, 50% of the tax on such services is payable by the service provider when services are supplied to a body corporate.

During scrutiny, the Department observed that the appellant filed Nil returns from April 2015 to September 2015 and failed to file ST-3 returns for October 2015 to June 2017. It was alleged that service tax amounting to ₹4,16,572 was not paid on works contract services provided to Rajasthan Vidyut Prasaran Nigam Limited.

The Bench of Dr. Rachna Gupta, Judicial Member noted that the adjudicating authority had examined the work orders and applied the valuation mechanism under Notification No. 24/2012-Service Tax, which provides for taxability at 40% of the value for original works. The bench found no infirmity in the recalculation of liability at ₹1,81,995 and upheld the application of exemptions and abatements granted in the order.

Discrepancy Between Statements and Bills of Entry Cannot Be a Ground to Reject Genuine Bills of Entry: CESTAT

SUSHANT AGRAWAL vs COMMISSIONER OF CUSTOMS-NEW DELHI 2025 TAXSCAN (CESTAT) 1265

The two-member bench comprising Dr. Rachna Gupta (Judicial Member) andP.V. Subba Rao (Technical Member) examined the legal position, noting that statements under Section 108 are relevant only if the maker is examined as a witness and the statement is admitted as evidence under Section 138B. Since this procedure was not followed, discrepancies with statements could not legally discredit the Bills of Entry.

Further, minor differences or omissions in marks and numbers in the B/Es do not automatically negate their authenticity, as such inconsistencies may arise during filing or handling.

The Tribunal also referred to its earlier order, which had remanded the matter to the Commissioner, directing proper consideration of the appellant’s documents. It observed that the appellant had adequately discharged the burden of proving that the seized goods were legally imported.

Extended Period Not Invocable for Lack of Willful Suppression: CESTAT Quashes ₹1.86Cr Service Tax Demand on UP Electronics Corporation

U P Electronics Corporation Ltd vs Commissioner, Central Excise& Service Tax 2025 TAXSCAN (CESTAT) 1266

The assessee was engaged in providing Management, Maintenance or Repair Services and was duly registered, but during audit it was noticed that it had also provided Commercial Coaching and Training, Online Information Retrieval, Event Management, Business Auxiliary and Franchise Services for which separate registration and service tax were not taken.

The department alleged that there was a short payment of service tax for 2006–07 to 2009–10 and issued a Show Cause Notice (SCN) invoking the extended period, proposing recovery of ₹2,08,11,360 with interest and penalties.

The Tribunal observed that if all transactions were recorded in the books of accounts, the extended period could not be invoked, and mere non-declaration of certain receipts could not amount to willful suppression.

CESTAT Holds Paper Biri Not Classifiable as Cigarettes, Rejects Central Excise Duty Demand

Commissioner, CGST, Ghaziabad vs M/s Salasaar Exim 2025 TAXSCAN (CESTAT) 1267

The respondent, Salasaar Exim, was engaged in the manufacture of paper biri using manually operated wooden jigs without electricity, and cleared the product with the word “Bidi” clearly printed on the wrappers and packaging.

The Bench comprising Sanjiv Srivastava (Technical Member) and Angad Prasad (Judicial Member) held that the Revenue failed to discharge the burden of proof required to disturb the declared classification, noting that there was no evidence of power-driven machinery, no market enquiry to show the goods were known as cigarettes, and no material establishing that the assessee marketed the product as cigarettes.

The Tribunal also rejected reliance on the CRCL report, observing that its reference to the COPTA definition of “cigarette” could not override tariff-based classification under the Central Excise Tariff Act.

Second Enhancement of Assessed Value without New Evidence Unsustainable: CESTAT Sets Aside ₹21.09 Lakh Customs Demand on DTH Components

M/S H.R. ELECTRONICS vs COMMISSIONER OF CUSTOMS(IMPORT &GENERAL)- NEW DELHI 2025 TAXSCAN (CESTAT) 1268

The appeal arises from an order passed by the Commissioner of Customs (Import & General), confirming a demand of Rs. 21.09 lakh on M/s HR Electronics for alleged undervaluation of imported components of Digital Receiver Sets.

On review, the two-member bench comprising Dr Rachna Gupta (Judicial) and P.V. Subba Rao (Technical) observed that Section 14 of the Customs Act requires valuation based on the price at which goods are ordinarily sold at the time and place of importation.

The Tribunal noted that the proper officer had already enhanced the values at assessment, and there was no explanation as to why those values were incorrect.

Excise Dept Denied CENVAT Credit On Outward GTA Ignoring Hindustan Coca-Cola’s FOR Delivery Evidence: CESTAT Remands Matter

Hindustan Coca-Cola Beverages Pvt. Ltd. vs Commissioner ofCentral Excise & Service Tax 2025 TAXSCAN (CESTAT) 1269

The appellant had availed CENVAT credit of Rs. 4,41,453 on outward transportation used for delivering goods from its factories and depots to customers’ premises for the period from September 2014 to June 2017.

The single-member bench comprising Ajay Sharma (Judicial Member) observed that the sample invoices submitted by the appellant clearly stated that delivery was on an FOR basis and that responsibility continued until the goods were delivered to the customer.

The bench pointed out that both lower authorities had recorded a finding contrary to the documents on record and had failed to properly examine the evidence and earlier Tribunal decisions in the appellant’s favour.

Expert Advice in R&D Projects Attracts Service Tax: CESTAT Classifies NGRI’s Deliverables as Scientific or Technical Consultancy

National Geophysical Research Institute vs Commissioner OfCentral Tax Medchal GST 2025 TAXSCAN (CESTAT) 1270

The issue was about a ₹1.22 crore demand raised by the Department for the period between October 2001 and March 2005, alleging that NGRI failed to discharge service tax on 11 externally funded projects.

NGRI, a constituent of the Council of Scientific and Industrial Research (CSIR) under the Ministry of Science and Technology, had argued that its activities were limited to geological and geophysical surveys, falling under the category of “Survey and Map Making” (SMM) services, which are not taxable unless they involve mineral exploration.

While the Tribunal acknowledged the institute’s status as a government entity, it clarified that such status does not automatically exempt it from scrutiny under the extended limitation clause, especially if suppression of facts is evident.

Importing E-Rikshaw Parts w/out 5 Key Assemblies not CKD/SKD: CESTAT Quashes Misdeclaration Claims & Higher CKD/SKD Customs Duty

M/s. Soni E Vehicle Pvt. Ltd vs Principal Commissioner ofCustoms 2025 TAXSCAN (CESTAT) 1271

Multiple customs appeals were filed by related entities before the CESTAT, led by the case filed by M/s. Soni E Vehicle Pvt. Ltd. - a manufacturer of e-rikshaws in India who had imported various parts for assembly and filed multiple Bills of Entry, including consignments dated 12.02.2019 which were subjected to examination.

The Bench of Justice Dilip Gupta, President and Hemambika R. Priya, Member (Technical) observed that under the Office Order dated 12.03.2014 issued by the Joint Commissioner of Customs, an e-rikshaw in CKD/SKD form must necessarily include a motor along with at least two other essential assemblies - being the transmission, axle, chassis or controller. As the appellant had not imported the motor, the goods could not be classified under CTH 8703 and had to be treated as parts under CTH 8708.

As such, it was noted that the Principal Commissioner had misread the Office Order.

CESTAT Upholds ₹35.74 Lakh CENVAT Credit Demand for Wrong Availment of EPCG and Customs Cess Credits

Sampark Industries Ltd vs Commissioner, CGST, Ghaziabad 2025 TAXSCAN (CESTAT) 1272

Before the Tribunal, the Department reiterated that the credits were legally inadmissible and supported the orders of the lower authorities.

The Bench comprising Sanjiv Srivastava (Technical Member) and Angad Prasad (Judicial Member) held that the duties in question were not specified for CENVAT credit, the EPCG conditions had not been fulfilled, and the capital goods had ceased to exist, disqualifying them for credit.

The Tribunal further held that the non-disclosure of these credits in statutory returns amounted to suppression, making the extended period under the proviso to Section 11A rightly invocable. Penalty under Rule 15(1) read with Section 11AC was also upheld.

Lease Premium Taxable as Renting of Immovable Property: CESTAT Upholds ₹2.88Cr Service Tax Demand on Ghaziabad Development Authority

Ghaziabad Development Authority vs Commissioner, CGST, Ghaziabad 2025 TAXSCAN (CESTAT) 1273

The case began when the department observed that GDA had allotted commercial and residential plots on long-term lease and collected various charges from allottees.

The Bench comprising Sanjiv Srivastava (Technical Member) and Angad Prasad (Judicial Member) held that the payments were clearly linked to granting possession and enjoyment of land, and were therefore consideration for renting, not sovereign or statutory fees.

The Tribunal noted that GDA continued to retain ownership of the land, and that the allottees only obtained the right to occupy and use it for the lease term, thereby satisfying all elements of the taxable entry.

Extended Period Not Invocable as All Activities Were Declared in ST-3 Returns: CESTAT Quashes Service Tax Demand

M/s SSG Infratech Pvt. Ltd. vs Commissioner of Central Excise& Service Tax, Noida 2025 TAXSCAN (CESTAT) 1274

The Bench comprising Sanjiv Srivastava (Technical Member) and Angad Prasad (Judicial Member) examined the SCN, returns and audit records.

The Tribunal found that the entire taxable value used to compute the demand was taken from the assessee’s own ST-3 returns and books, which were already in the possession of the department. Therefore, the basic condition for invoking the extended limitation period was a deliberate act of suppression or misstatement, this condition was not satisfied.

The Tribunal reiterated that mere non-payment or short-payment of service tax cannot justify the extended period, particularly where all information had been duly declared and the issue surfaced only from audit scrutiny. It held that the normal limitation period alone was applicable.

Service Tax Demand Based Solely on Discrepancy Between ITR/TDS and ST-3 Returns Invalid Without Investigating Cause of Difference: CESTAT

M/s H.R Real Value (Mr. Pradeep Kumar Mittal) vs Commissioner ofCentral Excise & CGST, Noida 2025 TAXSCAN (CESTAT) 1275

H.R Real Value (appellant), is a registered service provider. Upon scrutiny of the appellant's ITR and TDS returns for the Financial Years 2014-15 and 2015-16, the Revenue Department observed a discrepancy when comparing the gross receipts with the ST-3 returns filed.

The CESTAT Bench, comprising Sanjiv Srivastava (Technical Member), observed that the core dispute was whether a demand could be upheld based merely on differences in receipts shown in ITR/TDS and ST-3 returns.

The Bench noted that it was settled law that a demand cannot be raised solely on such discrepancies. The Adjudicating Authority was required to investigate the causes of the differences and arrive at a specific finding regarding the taxable nature of the receipts.

Extended Period Not Invokable: CESTAT Rules Constitutional Validity of 'Renting of Immovable Property' Levy is Still Pending Before SC

Rupinder Sagar Garg vs Commissioner of Central Excise andService Tax, Chandigarh-II 2025 TAXSCAN (CESTAT) 1276

Rupinder Sagar Garg (appellant) was joint owner of an immovable property situated in Patiala, Punjab. The appellant received rental income from Columbia Asia Hospital Pvt Ltd. During a survey, the Department found that while the hospital was paying substantial rent, the appellants had filed ST-3 returns showing 'NIL' gross amount received.

The CESTAT bench comprising Mr. S. S. Garg (Judicial Member) and Mr. P. Anjani Kumar (Technical Member) observed that the levy on Renting of Immovable Property has a complex legislative history, with retrospective amendments and stays granted by the Delhi High Court.

The Tribunal noted that the core question of law regarding the scope of "Taxes on Lands and Buildings" is currently pending before a Larger Bench of the Supreme Court.

Education Cess Being Surcharge Cannot Be Charged Twice on Clearances to DTA: CESTAT sets aside Differential Duty Demand

M/s Sudhir Power Ltd vs Commissioner of Central Excise &Service Tax 2025 TAXSCAN (CESTAT) 1277

Sudhir Power Ltd., (appellant) is an EOU situated in Jammu & Kashmir. The dispute arose regarding the calculation of duty payable on clearances to the DTA under Explanation 2(ii) to Section 3(1) of the Customs Tariff Act, 1975.

The bench comprising S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) referred extensively to the precedent set in Sarla Performance Fibers Ltd. vs. CCE, where it was established that Education Cess was a surcharge.

The Tribunal observed that under the provision to Section 3(1) of the Central Excise Act, 1944, the objective is to arrive at the aggregate of customs duties. Once the Education Cess is added to the customs duty, the enhancement is complete.

Interest Not Payable from 2008 Deposit: CESTAT Holds Sugar Manufacturer Not Entitled to Interest on Investigative Deposit

Commissioner, CGST & Central Excise, Gautam Budh Nagar vsM/s DSM Sugar 2025 TAXSCAN (CESTAT) 1278

The dispute began when the respondent, DSM Sugar engaged in the manufacture of sugar and molasses, reversed ₹78,01,415 from its c credit account in June 2008 “under protest,” following two Show Cause Notices issued in 2008 for alleged wrongful availment of credit on iron, steel and welding electrodes.

The Bench comprising Sanjiv Srivastava (Technical Member) and S.K. Mohanty (Judicial Member) examined the nature of the 2008 reversal and held that it was not a statutory pre-deposit, but a payment made during investigation towards a “probable duty liability.” The Tribunal further noted that interest on refunds of such deposits is governed strictly by Sections 35FF and 11B, and no interest can be granted for any period prior to the date prescribed in these provisions.

Accordingly, the Tribunal allowed the Revenue’s appeal, holding that DSM Sugar was not entitled to interest from the date of the 2008 deposit, and that interest was payable only to the extent permitted under the statutory scheme.

CESTAT upholds Service Tax on Community Centre Construction as Commercial Activity, Confirms Tax on Admitted Services

M/s Anubhavi Constructions vs Commissioner, CGST & CentralExcise 2025 TAXSCAN (CESTAT) 1279

The dispute began when officers visited the appellant’s premises on 17.05.2010, resumed records under panchnama, and recorded statements revealing that the firm was engaged in electrical works, erection of poles, cabling, and construction-related activities without properly declaring taxable services or filing ST-3 returns.

The Commissioner (Appeals) also held that extended limitation applied due to non-registration, non-filing of returns, and suppression of receipts.

The Bench comprising Sanjiv Srivastava (Technical Member) and Angad Prasad (Judicial Member) held that the appellant had already admitted tax liability on ECIS, BAS, and GTA services and paid the same with interest before issuance of the SCN, making the imposition of penalty on that portion unsustainable under Section 73(3).

Sabudana Duty Quashed: CESTAT Holds 'Nil' Rate Notification on Tapioca Sago is Curative and Operates Retrospectively

M/s.Bharat Sago Factory vs The Commissioner of GST & CentralExcise 2025 TAXSCAN (CESTAT) 1280

Bharat Sago Factory (appellant) are manufacturers of "sabudana," a food item traditionally consumed by devotees during fasting seasons. Historically, Sabudana was never subject to Excise Duty under the Central Excise Act, 1944.

The Tribunal relied heavily on the ratio of the Gujarat High Court in Shree Renuka Sugars, which held that if the Government corrects an inadvertent error or unintended withdrawal of exemption based on representation, such a notification must be viewed as clarificatory or curative.

The Tribunal held that notification No. 12/2013-C.E. must be read as a clarification or a curative measure. The tribunal held that the 'Nil' rate of duty becomes applicable even during the interregnum period (retrospectively). The appeal of the appellant was allowed.

Commissioner's Report, Toll Barrier Receipts Shows Manufacturing Activity Verified: CESTAT Rejects Clandestine Removal Allegation

Om Sai Ram Industries vs Commissioner of Central Excise andService Tax 2025 TAXSCAN (CESTAT) 1281

Om Sai Ram Industries (appellant) were engaged in the manufacture of Menthol Flakes, Menthol Crystals, and De-Mentholised Oil, availing area-based exemption under Notification No. 56/2002-CE.

The dispute arose following an investigation conducted by the Commissioner of Central Excise, concerning the suppliers of the appellant. The Revenue department alleged that the appellants fraudulently showed procurement of raw materials from non-existent suppliers to claim illegal monetary benefits under the exemption notification without actually manufacturing the goods.

The Bench comprising Mr. S. S. Garg (Judicial Member) and Mr. P. Anjani Kumar (Technical Member) observed that the show cause notice was issued solely based on the presumption derived from the Meerut investigation, without conducting a specific investigation at the appellant's end.

Cost-Sharing Among Group Entities for Events Outside India Does Not Amount to Taxable Service: CESTAT

M/s Boston Scientific India Pvt Ltd vs Commissioner of CentralExcise, Goods & Service Tax, Gurugram 2025 TAXSCAN (CESTAT) 1282

Boston Scientific India Pvt Ltd (appellant) is registered with the department for providing various services including management consultant and information technology services. The appellant reimbursed expenses to its foreign group company for their share of expenses for events and conferences held outside India.

These events were organized to train the appellant's employees and keep them updated with technological know-how. The associated enterprises charged these expenses on a cost-to-cost basis.

The Bench comprising Mr. S. S. Garg (Judicial Member) and Mr. P. Anjani Kumar (Technical Member) observed that the expenses were shared on a cost-to-cost basis for the common benefit of all group entities.

Commercial Construction for Government Bodies Not Exempt: CESTAT Upholds Rs. 3.11 Crore Service Tax Demand on Works Contract Services

M/s Ganpati Mega Builders India Pvt. Ltd vs Commissioner, CGST& Central Excise, Agra 2025 TAXSCAN (CESTAT) 1283

Ganpati Mega Builders India Pvt. Ltd. (appellant) is engaged in providing construction services. The dispute arose regarding services provided to the Mandi Parishad and KDA, for which the appellant claimed exemption under Notification No. 25/2012-ST (specifically entries 12, 13, and 25).

These entries generally exempt services provided to a "Governmental Authority" for construction meant predominantly for non-commercial use or specific public utilities.

The Tribunal noted that the contracts executed were for the construction of "Shops, Auction Platform, Parking, Canteen, Godown etc. which are not only commercial in nature but also not provided to any Government, local authority or governmental authority" for non-commercial use.

Taxpayer Already Paid Liability Under Work Contract Services: CESTAT set Asides Service Tax Demand on Earth Excavation Services

M/s Abhilasha Enterprises vs Commissioner of Central Excise& CGST 2025 TAXSCAN (CESTAT) 1284

Abhilasha Enterprises (appellant), is a registered provider of construction services. The dispute arose following an investigation alleging that the appellant had not deposited service tax properly and had utilized inadmissible CENVAT credit.

Consequently, a Show Cause Notice was issued demanding Service Tax of Rs. 30,34,350 on "Earth Excavation Services" and proposing the recovery of inadmissible CENVAT credit amounting to Rs. 93,41,381. The adjudicating authority confirmed both demands and imposed equal penalties. Aggrieved by the order, the appellant approached the Tribunal.

The tribunal relied on the verification report and held that the jurisdictional officers are in agreement with the submissions made by the appellant in respect of this demand that the service tax towards Earth Excavation Services has been paid by the appellant.

Service Tax not Leviable on License Fee collected for Supply of Customised Software to BITS: CESTAT

M/s. Eduquity Career Technologies Pvt. Ltd vs Commissioner ofService Tax 2025 TAXSCAN (CESTAT) 1285

The Tribunal held that reimbursable expenses cannot be included in taxable value under Management Consultancy Services and that customised software supply was outside the scope of service tax before May 2008.

The dispute arose from an audit of Eduquity Career Technologies Pvt. Ltd, the appellant's records for the period 2004–2006, which revealed that the company had received payments from BITS Pilani for conducting computer‑based online admission tests (BITSAT).

The Department issued a show‑cause notice in June 2008 demanding service tax of ₹31.15 lakh along with interest and penalties, alleging liability under Management Consultancy Services. On adjudication, the demand was confirmed, though the Commissioner (Appeals) granted partial relief by setting aside a small portion of the demand and denying cenvat credit. Eduquity carried the matter further to the Tribunal.

Recovery u/s 11A is Unjustified as Refund Orders Had Attained Finality Without Appeal: CESTAT

Commissioner of CG & ST, Gurugram vs M/s Harsoria HealthcarePvt Ltd 2025 TAXSCAN (CESTAT) 1286

Harsoria Healthcare Pvt Ltd (Respondent), a Export Oriented Unit (EOU), had filed 26 refund claims for unutilized CENVAT credit on a monthly basis between March 2012 and July 2014. The proper officers examined these claims and sanctioned them through various speaking orders.

The Bench, comprising S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member), rejected the Revenue's reliance on Indian Dyestuff, noting that in those cases, refunds were often provisional or conditional. In the present case, the refunds were final and unconditional.

The Tribunal relied on the decision in Bridgestone India Private Ltd. Vs. Commissioner of CGST, which held that Section 11A and Section 11B operate in different streams. The tribunal observed that once a determination under Section 11B results in a refund order, and that order attains finality, the amount cannot be recovered as an "erroneous refund".

Relief for Asianet Satellite: ₹3.04Cr Service Tax Demand Set Aside as CESTAT Finds SCN Built on Faulty Methodology

The Commissioner of Central Excise vs M/s. Asianet SatelliteCommunications Ltd 2025 TAXSCAN (CESTAT) 1287

The dispute began when the Department, upon reconciling the ledgers of the Respondent, alleged that the company had taken CENVAT credit on input services merely on the basis of invoices without releasing payments to creditors.

A SCN was issued demanding ₹3,04,52,782 in service tax and proposing disallowance of ₹6,34,284 as wrongly availed credit.

The Bench comprising P.A. Augustian (Judicial Member) and R. Bhagya Devi (Technical Member) held that the Commissioner’s reasoning was unassailable, as the SCN’s foundation was indeed unstable and unsustainable.

Dam and Powerhouse Construction Not Taxable: CESTAT Directs Refund to Be Processed u/s 11B

M/s. SNC Power Corporation (P) Limited vs Commissioner ofService Tax 2025 TAXSCAN (CESTAT) 1288

The dispute arose from construction works executed by SNC Power Corporation Pvt. Ltd. (appellant) between 2006 and 2008, involving the Nagarjuna Sagar Tail Pond Project and the Almatti Dam Power House.

As construction “in respect of dams” stood expressly excluded from Commercial or Industrial Construction Service, the appellant did not pay service tax during this period.

The Tribunal held that the finding of the lower authority that the powerhouse was not part of the dam was unsustainable.

CESTAT Rules Testing Centre Reimbursements Beyond MCS Scope, Sets Aside Service Tax Demand on Eduquity Career Technologies

M/s. Eduquity Career Technologies Pvt. Ltd vs Commissioner ofService Tax 2025 TAXSCAN (CESTAT) 1289

The dispute arose from an audit of Eduquity’s records for the period 2004–2006, which revealed that the company had received substantial reimbursements from BITS Pilani for conducting computer‑based admission tests.

The two-member bench comprising D Bhagya Devi (Technical Member) and DM Misra (Judicial Member), after considering the submissions and perusing the records, held that the demand for reimbursements could not be sustained.

It noted that Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, had been struck down by the Supreme Court, and therefore, the reimbursable expenses could not be artificially included in the taxable value.

Exemption Under SEZ Act Cannot Be Denied Merely for Procedural Lapses: CESTAT Sets Aside Excise Demand on SEZ Supplies

ACE Enterprises vs Commissioner of CGST & Central Excise,Nashik 2025 TAXSCAN (CESTAT) 1290

The dispute arose during an EA-2000 Audit, where departmental officers noticed that ACE Enterprises had cleared “Apron Front Body PVC Disposable” under 45 invoices between 2015–16 and June 2017 to SEZ Units, without payment of duty under Notification No. 58/2003-CE.

The Bench Comprising M.M. Parthiban (Technical Member) examined the SEZ Act, 2005, SEZ Rules, 2006, and CBEC Circular 29/2006, noting that after enactment of the SEZ Act, Notification No. 58/2003-CE became redundant and supplies from the Domestic Tariff Area (DTA) to SEZ are to be treated as in the nature of exports and are exempt from central excise duty.

The Tribunal noted that Section 26(1)(c) read with Section 51 gives the SEZ Act overriding force, and exemption under the SEZ framework cannot be denied on the basis of procedural non-compliance under excise notifications.

UltraTech’s Installation and Operation of Fly Ash Collection System Not a Taxable Service to TNEB: CESTAT

Ultra Tech Cement Ltd. vs Commissioner of GST & CentralExcise 2025 TAXSCAN (CESTAT) 1291

UltraTech Cement Ltd., the appellant, entered into a Memorandum of Understanding (MOU) with TNEB in 2002 for collecting fly ash from MTPS. Under the MOU, UltraTech had to install the Fly Ash Collection System at its own cost, and the system would become the property of TNEB. UltraTech received an allotted share of fly ash, which is an essential raw material for manufacturing cement.

The tribunal explained that UltraTech had acted to secure fly ash as a raw material and that the activity did not constitute a taxable service.

It also pointed out that TNEB permitted UltraTech to collect fly ash free of cost, except for service charges paid by the appellant to TNEB, and this did not amount to consideration flowing from TNEB to UltraTech. The appeal on this issue was allowed.

CESTAT Quashes Customs Broker Licence Suspension, Holding No Mens Rea or Procedural Lapse Proven

M/s Karan Logistics vs Commissioner of Custom 2025 TAXSCAN (CESTAT) 1292

The dispute began when an investigation by the Assistant Commissioner of Customs revealed that exporter Krystfab Enterprises had fraudulently availed excess RoSL (Rebate of State Levies) amounting to ₹11,38,921, and all attempts by the Department to contact the exporter and the Customs Broker failed, with communications returning undelivered and the exporter withdrawing the funds from its bank account.

Before the Tribunal, the appellant argued that the licence had been continuously under suspension or revocation since 2018 and had twice been restored by the same Bench. They submitted that a Customs Broker is not required under law to conduct physical background checks of exporters and can only verify documents such as Importer-Exporter Code (IEC) and PAN, which were not alleged to be fake or forged.

The Bench Comprising S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member), observed that shipping bills were duly filed, goods were presented for examination, Let Export Orders were issued by the Customs officers, and RoSL was credited by the system to the exporters’ bank accounts.

UltraTech Entitled to Full CENVAT Credit on Fly Ash O&M Services: CESTAT Rules Dept Cannot Restrict Credit

Ultra Tech Cement Ltd vs Commissioner of GST & CentralExcise 2025 TAXSCAN (CESTAT) 1293

UltraTech Cement Ltd., the appellant, had engaged a subcontractor, Shri R. Saravanan, to carry out the operation and maintenance of the fly ash system installed at MTPS. The subcontractor raised invoices on UltraTech, and UltraTech paid service tax on these services under the category of repair and maintenance. UltraTech availed CENVAT credit on this tax.

The bench comprising M. Ajit Kumar (Technical Member) and Ajayan T.V. (Judicial Member) observed that UltraTech alone was responsible under the MOU to maintain the fly ash system and that the subcontractor’s services were entirely for UltraTech.

The tribunal explained that the service was directly connected with procurement of inputs and was an eligible input service. It also pointed out that earlier adjudication orders had already accepted the availability of full credit and were not challenged by the revenue. The appeal on this issue was allowed.

Fire Loss No Ground for Exemption: CESTAT Orders Ajanta Soya to Pay Duty on All Lost and Short Crude Palm Oil

M/s Ajanta Soya Limited vs Commissioner of Customs, ….Respondent(Preventive), Jodhpur

2025 TAXSCAN (CESTAT) 1294

M/s Ajanta Soya Limited, the appellant, is engaged in the manufacture of refined oil, vanaspati and bakery shortening. For these operations, the appellant imported Crude Palm Oil at a concessional rate of Basic Customs Duty by availing Notification No. 12/2012-CUS dated 17 March 2012. The concessional rate was subject to the condition that the imported material would be used in the manufacture of specified goods and that the importer would comply with the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016.

The bench of P.V. Subba Rao, Technical Member & Justice Dilip Gupta, President, noted that the insurance surveyor’s 146 page report was the most reliable and accepted 230.77 MT as the actual loss. The bench held that the appellant’s plea for deemed usage could not be accepted because the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 do not contain any deeming provision similar to that found in certain Central Excise Rules considered in earlier case law. Therefore, Crude Palm Oil destroyed in the fire or found short cannot be treated as having been used in manufacture.

Further, the Court ruled that the appellant was liable to pay customs duty on the entire quantity of Crude Palm Oil that was either destroyed in the fire or found short, since the essential condition of the exemption notification being “actual use in manufacture” was not met.

Copolymer vs. Homopolymer: CESTAT Raps Customs for confirming ADD on PVC Import without Verifying Material Composition

KPL International Limited vs Commissioner of Customs (NS-I)

2025 TAXSCAN (CESTAT) 1295

The proceedings arose from imports of polyvinyl chloride (PVC), copolymer solvin 550GA (suspension polymerization) sourced from Belgium by the appellant - KPL International Limited through multiple consignments between June 2015 and March 2017. The department alleged that the imports attracted ADD under Notification No. 70/2010-Customs (ADD) and issued a demand of ₹55,93,194 under Section 28 of the Customs Act, 1962 along with penalty under Section 114A.

The bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) noted that the adjudicating authority had failed to consider the detailed technical submissions or the chemical composition placed on record despite the appellant’s repeated submissions that the goods imported by them were not ‘homopolymer’ but ‘copolymer’ which is not attributable to ADD.

The Tribunal observed that confirmation of ADD solely on the basis of generic product descriptions in the anti-dumping notifications, without scrutiny of the actual material imported amounted to non-application of mind. It further noted that self-assessment under Section 17 does not relieve the assessing officer of the responsibility to reassess goods wherever doubt exists and that a speaking order under Sections 17(5) and 28 is mandatory.

CESTAT Quashes ₹45 Lakh Penalty Under Rule 26 for Inapplicability Without Confiscation of Goods

Shri Venkat R. Chari vs C.C.E. & S.T. – Daman 2025 TAXSCAN (CESTAT) 1296

The dispute arose when Shri Venkat R. Chari, an employee of Shri Krishna Impex, was subjected to a penalty for alleged involvement in a rebate scam.

The Tribunal observed that cross-examinations conducted by the department were insufficient due to the common interest among co-noticees, and the statements could not be fully relied upon without independent corroboration.

The Bench comprising Somesh Arora (Judicial Member) emphasized by referring to Rule 26 that the penalty can only be imposed if goods are liable for confiscation. In this case, no confiscable goods were involved, and the appellant’s managerial role or signatory position did not establish malfeasance beyond his salary.

CESTAT Sets Aside Tax on Club Membership Fees, Citing Supreme Court’s Kolkata Club Decision

M/s. Lotus Club vs The Commissioner of Central Excise

2025 TAXSCAN (CESTAT) 1297

The dispute began when the department initiated proceedings alleging that the appellant had not paid service tax under “Membership of Club or Association Service” for the period 2005–06 to 2008–09.

Before the Tribunal, the appellant submitted that the only surviving issue was the service tax demand on membership and subscription charges, and argued that the matter was no longer res integra after the Supreme Court’s judgment in State of West Bengal vs. Kolkata Club Ltd. (2019), which held that transactions between clubs and their members are not liable to service tax due to the doctrine of mutuality.

The Bench comprising P.A. Augustian (Judicial Member) and R. Bhagya Devi (Technical Member) examined the Supreme Court judgment and noted that a club and its members cannot be treated as distinct persons for purposes of levy, as no one can render service to oneself.

Dilution and Repacking of Seaweed Extract Not Amounting to Manufacture: CESTAT Holds Excise Demand Unsustainable

M/s Dhanuka Agritech Ltd. vs Commissioner of CentralExcise,Jammu & Kashmir 2025 TAXSCAN (CESTAT) 1298

The dispute began when the department issued Show Cause Notices (SCN) alleging that the appellant had manufactured “Dhanzyme” classifiable under Chapter 31 of the Central Excise Tariff and had cleared the same without payment of duty.

The Bench Comprising S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) examined the earlier CESTAT orders and noted that in the appellant’s own case, the Tribunal had categorically held that no new product with a different name, character, or use emerges from the dilution process. The department had accepted this finding, and the decision was also upheld by the Supreme Court, leaving no room for re-agitation of the same issue.

The Tribunal further observed that once it is held that the activity does not amount to manufacture, as excise duty can be levied only on goods that are manufactured.

Water Meter Classification: CESTAT Sets Aside Order After Finding Crucial Precedents Were Not Examined

Xylem Water Solutions India Pvt Ltd vs Commissioner of CustomsAir Cargo Complex 2025 TAXSCAN (CESTAT) 1299

The appeal arose from the assessment of a bill of entry for the import of “Ipearl DN 15 Water Meter,” originally classified by the importer under tariff item 9026 1090 of the First Schedule to the CustomsTariff Act, 1975. Revenue reclassified the product under heading 9028 based on HSN Explanatory Notes, catalogues, and National Import Database (NIDB) data from similar imports at Delhi and Chennai.

The Tribunal Bench, comprising C.J. Mathew (Judicial Member) and Ajay Sharma (Technical Member), noted that the lower authorities did not have the benefit of the Tribunal’s decisions in Larsen & Toubro Ltd. and Anjali Enterprises, which directly address the classification of water meters. Observing that these rulings have a bearing on the issue, the Bench held that a fresh examination was required.

Accordingly, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority to reconsider the classification in light of the precedents and ensure conformity between the goods examined in earlier cases and the meters under dispute.

CESTAT Confirms OTN Character of Optical Switch Unit, Benefit of 10% BCD under Customs Act Denied

M/s Tirumala Seven Hills Pvt. Ltd vs Commr. of Customs (Airport& Admin), Kolkata 2025 TAXSCAN (CESTAT) 1300

The appellant, M/s Tirumala Seven Hills Pvt. Ltd., imported Optical Switch Unit/Optical Line Protection (OLP) equipment and claimed concessional BCD at 10% under Notification No. 57/2017-Cus. The adjudicating authority rejected the claim and assessed the goods at 20%, relying on CBIC Circular No. 08/2023 to conclude that the equipment formed part of OTN/OTE systems. The Commissioner (Appeals) upheld this view, prompting the present appeal.

The Tribunal Bench, comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member), examined the product catalogue, the technical descriptions of OSP (Outside Plant) and OLP Board (Optical Line Protection Board), and the Generic Requirements issued by the Telecommunication Engineering Centre (TEC). It found that protection switching within 50 microseconds forms an essential part of OTN architecture, and that Optical Line Protection modules are explicitly included in Annexure-1 and Annexure-2 of CBIC Circular No. 08/2023 as OTN/OTE components.

The Bench observed that OTN equipment, DWDM systems, ROADM modules, regenerators and Optical Line Protection equipment are all part of the same transport ecosystem. TEC guidelines also confirm that ASON (Automatically Switched Optical Network) functionality may be implemented either in an OTN switch or an optical switch such as ROADM. In this context, the Tribunal concluded that the Optical Switch Unit imported by the appellant squarely falls under the excluded category.

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