M/s Vineera Colonisers Private Limited vs AdditionalDirectorGeneral, DGGSTI, New Delhi CITATION : 2025 TAXSCAN (CESTAT) 1301

The Principal Bench of CESTAT, New Delhi, granted major relief to sixteen land-owning companies associated with M/s Omaxe Limited by setting aside a cumulative service tax demand of ₹24.20 crore, including interest and penalties. The Department had alleged that the transfer of development rights (TDR) by these companies to Omaxe Limited amounted to a taxable service under Section 66E of the Finance Act, 1994.

Relying on judicial precedents from CESTAT and High Courts, the Bench comprising Binu Tamta and Hemambika R. Priya held that the transfer of development rights cannot be brought within the ambit of service tax. The Tribunal rejected the Department’s attempt to distinguish prior decisions based on the number of parties involved, emphasizing that the legal principle applies regardless.

When the matter was appealed before the Tribunal, the Bench comprising Ashok Jindal(Judicial Member) noted that there was no evidence whatsoever linking the appellants to the remaining 350 kg of betel nuts. It observed that the Revenue’s conclusion was based solely on assumption and that the appellants had produced valid documents establishing their ownership of only 150 kg. The Tribunal held that such unsupported presumptions could not sustain an order of confiscation or penalty.

Allowing the appeals, the Tribunal set aside the impugned order, directed the Revenue to release the 150 kg of betel nuts to the appellants in good and consumable condition, and held that no penalties were imposable.

The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has upheld the service tax demand, rejecting the assessee’s plea that the extended period was wrongly invoked.

The Bench, presided over by Dr. Rachna Gupta (Judicial Member) observed that the adjudicating authority had already extended partial relief by recalculating the liability under Notifications 24/2012-ST and 30/2012-ST, revising the demand to ₹1,81,995. It held that the authorities had correctly treated the activity as works contract service and calculated tax accordingly.

The Tribunal held that ignorance of law was not a valid defence, and the non-filing of returns amounted to deliberate non-compliance, justifying the extended period.

M/s National Instituteof Public Finance and Policy vsCommissioner of Central Excise & CGST- DelhiSouth CITATION : 2025 TAXSCAN (CESTAT) 1304

The Principal Bench of CESTAT, New Delhi, has ruled in favour of the National Institute ofPublic Finance and Policy (NIPFP) by setting aside penalties imposed for non-payment of service tax and ineligible Cenvat credit claims. The Tribunal noted that the discrepancies identified during a test-check audit such as non-payment of service tax on certain income heads and Reverse Charge liabilities, along with wrongful credit availment were inadvertent and promptly rectified. NIPFP had voluntarily deposited the full amount of tax and interest even before issuance of the show cause notice, demonstrating absence of any intention to evade.

The Bench observed that penalties under Section 78 of the Finance Act, 1994 and Rule 15(3) of the Cenvat Credit Rules, 2004 can be imposed only when fraud, collusion, or deliberate suppression of facts is established. Relying on Supreme Court judgments, it held that technical lapses or bona fide errors cannot attract penal consequences. Taking note that the appellant is a government-linked institution with no evidence of concealment, CESTAT concluded that the extended period and penalties were unjustified, and accordingly set aside the penalties while sustaining the tax and interest liabilities.

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a duty demand of ₹1.34 crore along with multiple penalties and redemption fines and remanded the matter to the adjudicating authority for fresh determination after properly reconciling warehouse stock, SEZ clearances and loss of sugar due to Cyclone Roanu.

The Bench observed that the adjudicating authority failed to properly reconcile the quantities lost due to cyclone, the quantities exported, and those cleared to the SEZ unit. It also noted that there was no evidence of diversion of goods into the domestic tariff area. Since the reconciliation exercise was flawed, the duty demand of ₹1.34 crore was set aside and remanded for re-determination after examining all records afresh.

M/s. Srivari Enterprises vs Commissioner of GST &CentralExcise CITATION : 2025 TAXSCAN (CESTAT) 1306

The Chennai Bench of CESTAT upheld the levy of service tax on M/s Srivari Enterprises, dismissing its appeal against the demand of ₹24,85,489 for the period April 2010 to March 2011. The Tribunal held that the appellant’s services customer evaluation and recovery support for banks and financial institutions fall squarely under Business Auxiliary Services (BAS) as incidental or auxiliary to the banks’ core lending operations. It observed that the show cause notice adequately referred to Section 65(19)(vii), and the appellant’s arguments regarding vagueness or alternative classification were without merit.

The Tribunal also emphasized that the appellant’s identical earlier case had already been decided against them, and no change in facts or evidence justified a different outcome. Following judicial discipline and consistent application of law, CESTAT affirmed the BAS classification and upheld the service tax demand along with interest and penalties, dismissing the appeal in full.

Excise Dept Erred by Ignoring Gherkins in Brine While Computing SION: CESTAT Deletes Duty Demand on alleged Excess Vinegar Consumption

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) Bench at Chennai, has granted substantial relief by setting aside the Customs and Central Excise duty demand raised on the allegation of vinegar consumption in excess of the Standard Input Output Norms (SION).

The Bench held that the Department’s computation was fundamentally flawed, as it considered only exports of “gherkins in vinegar” while completely ignoring “gherkins in brine,” even though SION norms do not distinguish between the two categories.

SION norms for gherkins prescribe a uniform ratio of 0.4 litre of vinegar per kilogram without differentiating between varieties, and the Department did not dispute that vinegar is also used for brine-packed gherkins. The Bench also noted that there was no evidence of diversion of inputs or unaccounted production and that the EOU operated under departmental supervision.

No Evidence of Wilful Delay: CESTAT Holds Late Fines Unjustified, Granting Relief to Importer

The Eastern Zonal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Kolkata, has upheld the waiver of late filing fees imposed on the appellant, holding that the disappearance of four advance Bills of Entry from the ICEGATE system was due to a systemic error, and the importer could not be penalised for circumstances beyond its control.

After hearing both sides, the Bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member), upheld the Commissioner (Appeals)’s findings. The Tribunal observed that the four advance Bills of Entry were indeed filed in time but were not available in ICEGATE when the importer attempted duty payment. In such a situation, the importer could not be held responsible for the disappearance of the Bills from the system. The Tribunal held that the Commissioner (Appeals) had rightly concluded that the late filing occurred due to a system error, not due to any inaction or negligence by the importer.

M/s. Seaport Logistics Pvt. Ltd vs Commissioner of GST&Central Excise CITATION : 2025 TAXSCAN (CESTAT) 1309

The Chennai Bench of CESTAT granted relief to M/s Seaport Logistics Pvt. Ltd., setting aside service tax demands under the Reverse Charge Mechanism (RCM) for Goods Transport Agency (GTA) services and deleting the penalty under Section 78 of the Finance Act, 1994. The Tribunal relied on its earlier ruling in the assessee’s own case, holding that the liability to pay service tax on GTA services rests with the consignor or consignee, not the GTA. Since the recipients had already discharged the applicable tax, Seaport Logistics was under no obligation to pay, and the adjudicating authority’s demand based on alleged discrepancies was unsustainable.

Regarding the Section 78 penalty for port services and renting of immovable property, the Tribunal noted that a substantial portion of the tax had already been paid, and there was no evidence of fraud, suppression, collusion, or wilful misstatement. Observing that the statutory conditions for imposing the penalty were not met, CESTAT set aside the penalty. Both appeals were allowed, granting consequential relief to the appellant.

Rungta Mines Ltd vs Commissioner of Customs Visakhapatnam-Customs CITATION : 2025 TAXSCAN (CESTAT) 1310

The Hyderabad Bench of CESTAT has ruled that export duty must be calculated solely on the basis of the final commercial invoice and Bank Realisation Certificate (BRC), rejecting the lower authorities’ reliance on CRCL moisture reports. The Tribunal held that once transaction value is accepted as genuine and fully realised, altering it during final assessment—particularly without following prescribed procedures or considering contractually recognised CIQ reports—is unjustified.

Observing that provisional assessment bonds do not imply acceptance of CRCL results, the Bench relied on prior rulings that mandate refund sanction based on final invoice values. It set aside the impugned orders and remanded the matter for fresh computation of refund and interest under Section 18(4) of the Customs Act, directing the Original Authority to complete the process within three months.

Glenworth Estate Ltd vs Commissioner of GST & CentralExcise CITATION : 2025 TAXSCAN (CESTAT) 1311

The Chennai Bench of the CESTAT has held that black tea continues to retain its essential character as an agricultural produce, and therefore, commission paid to foreign agents for facilitating its export cannot be taxed under the Reverse Charge Mechanism. The dispute concerned the levy of service tax on export commission paid by Glenworth Estate Ltd., which the Department had treated as a taxable service under Section 65(44) read with Notification No. 30/2012. The appellant relied on CBEC Circular No. 143/12/2011-ST and the Tribunal’s earlier ruling in its own case, confirming that the processing of green tea into black tea does not alter its agricultural identity.

The Bench observed that agricultural produce-related services fall within the negative list under Section 66D(vii) of the Finance Act, 1994, and that the earlier CESTAT order remains binding and has not been set aside. Therefore, once black tea is accepted as agricultural produce, no service tax liability arises on the commission paid abroad. With the demand unsustainable on merits, the Tribunal also set aside interest and penalties, allowing the appeal with consequential relief.

CENVAT Credit cannot be Denied if Service Invoice was Addressed to Architect Entrusted by Construction Company

The Chennai Bench of the Customs, Excise andService Tax Appellate Tribunal (CESTAT) recently held that Central Value Added Tax (Cenvat)Credit cannot be denied merely because an invoice for construction services was addressed to the company’s architect rather than to the company itself. The Tribunal also set aside the penalties imposed on the assessee, while partly upholding the denial of credit relating to workstation furniture.

The Bench relied on the Gujarat High Court’s decision in Vimal Enterprise v. Union of India (2006) to reiterate that Modvat/Cenvat provisions are intended to prevent cascading of taxes and should not be frustrated by trivial procedural lapses. The Tribunal observed that suspicion regarding potential double-claim of credit cannot be sustained in the absence of any evidence and that the authorities should have guided the assessee instead of rejecting the claim outright.

Dugar Housing vs Commissioner of GST and Central Excise CITATION : 2025 TAXSCAN (CESTAT) 1313

The Chennai Bench of CESTAT held that Dugar Housing, a residential developer, was not liable to pay service tax under “Construction of Complex Service” for the period 1 November 2005 to 31 March 2008, as developers executing composite housing projects were brought into the tax net only from 1 July 2010. The Tribunal found that the Commissioner (Appeals) exceeded the scope of the SCN by reclassifying the activity under “Works Contract Service,” which was never proposed, making the demand unsustainable on merits.

CESTAT also ruled that the extended period could not be invoked because the dispute concerned interpretation and involved no suppression of facts. The demand, interest, and penalty were therefore set aside, and the appeal was allowed with consequential relief.

Cost Recovery Charges Collected Without Legal Authority: CESTAT Allows Refund of Entire Amount to Appellant

The Allahabad Regional Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the levy and collection of Cost Recovery Charges (CRC) from the appellant was without any authority of law, and consequently directed a refund of the entire amount collected by the Department since 2009.

The Bench held that once the High Court had categorically ruled that the Customs Act contains no enabling provision to recover such charges, the Department had no authority at any stage to impose or collect CRC from any custodian. The Tribunal also noted that no appeal had been filed by the Department against the decision in GMR International, thereby indicating acceptance of the High Court’s view. The Bench held that the impugned order granting exemption only prospectively was unsustainable. It emphasised that CRC collected from the appellant even prior to the 2009 Regulations was based merely on administrative instructions and circulars, which could not create an enforceable financial liability in the absence of statutory backing.

M/s. Rashmi Cement Limited - Unit I & II vsCommissioner ofCentral Tax CITATION : 2025 TAXSCAN (CESTAT) 1315

The Kolkata Bench of CESTAT set aside a ₹67 crore excise duty demand against Rashmi Group, ruling that allegations of clandestine removal of goods cannot be sustained without strict compliance with statutory requirements. The Tribunal held that electronic records recovered from third-party premises were inadmissible as evidence due to non-compliance with Section 36B of the Central Excise Act, which mandates certification to establish the authenticity of electronic media.

It further held that inculpatory statements of directors and employees had no evidentiary value since the Revenue failed to follow Section 9D by not allowing cross-examination. Finding no corroborative evidence such as unaccounted raw materials, excess power usage, or identified buyers, the Tribunal concluded that the case rested on weak and legally unreliable grounds. The demand, interest, and penalties were therefore set aside, allowing the appeal.

M/s. Rashmi Cement Limited - Unit I & II vsCommissioner ofCentral Tax CITATION : 2025 TAXSCAN (CESTAT) 1315

The Kolkata Bench of CESTAT set aside a ₹67 crore excise duty demand against Rashmi Group, holding that allegations of clandestine removal cannot be upheld merely on assumptions drawn from unverified private records seized from third-party premises. The Tribunal noted that the Revenue relied solely on handwritten notes and printouts that lacked any credible link to the company’s operations, without investigating essential corroborative factors such as excess raw material procurement, higher electricity consumption, transportation of goods, or unaccounted monetary receipts.

Applying the principles laid down in Arya Fibres Pvt. Ltd., the Bench found the case built on conjectures and a flawed comparison of unofficial records with statutory documents. It also rejected stock-shortage findings based on eye estimation. As the Revenue failed to discharge the heavy burden of proof required for a serious charge like clandestine removal, the Tribunal set aside the demand, interest, and penalties, allowing the appeal in full.

M/s Rites Limited vs Commissioner of Central Exicse CITATION : 2025 TAXSCAN (CESTAT) 1316

The Chandigarh Bench of CESTAT has held that works contract services used for constructing a railway siding for a public sector power utility qualify as exempt railway services under the Finance Act, 1994. The Tribunal noted that the project, executed by Rites Limited on behalf of MPPGCL with Railway approvals, involved installation of a railway system, and the exemption under Entry 14A of Notification 25/2012 applies. Relying on the Konkan Railway Corporation judgment, it held that the Finance Act does not differentiate between public and private railways for the purpose of exemption.

Rejecting the Revenue’s contention that the siding was not for public use, the Bench observed that public sector undertakings fall within the scope of “public” and that the Railways Act definition cannot restrict exemption under service tax law. Consequently, the Tribunal set aside the service tax demand and allowed the appeal.

M/s Hansco Iron and Steel Pvt. Ltd vs Commissioner ofCustoms,Ludhiana CITATION : 2025 TAXSCAN (CESTAT) 1317

The Chandigarh Bench of CESTAT held that mis-declaration cannot be presumed solely from a variation in scrap classification and set aside the redemption fine and penalty imposed on M/s Hansco Iron and Steel Pvt. Ltd. The importer had declared the goods as heavy melting scrap based on supplier documents and even opted for a first-check examination. The Tribunal found that the Chartered Engineer’s report, which formed the basis of the allegation, was only an estimate and lacked proper sampling.

The Bench observed that no evidence of excess or undisclosed payment existed to support a charge of under-valuation, and acceptance of a higher value for quicker clearance did not indicate wrongdoing. Concluding that the Revenue failed to establish mens rea or material mis-declaration, the Tribunal allowed the appeal and removed the fine and penalty.

M/s Vasu Construction Co vs Commissioner of CentralExcise,Goods& Service Tax, Panchkula CITATION : 2025 TAXSCAN (CESTAT) 1318

The Chandigarh Bench of CESTAT dismissed a refund claim by M/s Vasu Construction Co. and held that payments made under the Voluntary Compliance Encouragement Scheme (VCES), 2013 are final and cannot be reopened or refunded. The appellant had voluntarily paid service tax under VCES on works contract services provided to a government authority, but later sought a refund after judicial rulings clarified such works were exempt.

The Tribunal emphasized that Sections 108(2) and 109 of VCES bar reopening of declarations and categorically prohibit any refund of amounts paid under the scheme. It held that the legislative intent is to ensure final settlement of past liabilities and that neither the taxpayer nor the department can resign from a settled declaration. Therefore, the appeal was rejected, reaffirming that VCES payments are conclusive and non-refundable.

Exide Industries Ltd vsCommissioner of CGST CITATION : 2025 TAXSCAN (CESTAT) 1320

The Mumbai CESTAT set aside a demand of over ₹1 crore against Exide Industries, holding that the company’s clearance of Polypropylene Co-Polymer (PPCP) to mould manufacturers was a removal of inputs as such under Rule 3(5) of the CENVAT Credit Rules, not a “trading activity”. Since the moulders used the PPCP exclusively to manufacture battery containers and lids for Exide and returned the finished goods on payment of duty, the Tribunal ruled that Rule 6(3) which applies only when exempted goods or services are provided had no application. The Bench noted that PPCP had consistently been treated as an input in Exide’s earlier adjudications accepted by the Revenue.

The Tribunal criticised the Department’s case as speculative, based on assumptions without evidence of any sale of PPCP to third parties or any profit-oriented trading. It held that once Exide reversed the credit under Rule 3(5), the credit liability stood exhausted and could not again trigger Rule 6(3). Observing contradictions in the Commissioner’s findings and relying on multiple precedents, including Exide’s own earlier cases, the Tribunal found the demand, interest, and penalty unsustainable and allowed the appeal in full.

CEVA Freight (India) Private Limited vs Commissioner ofServiceTax-V, Mumbai CITATION : 2025 TAXSCAN (CESTAT) 1321

The CESTAT Mumbai set aside service tax demands raised against CEVA Freight, holding that the company’s purchase and resale of cargo space on ships and aircraft constituted a principal-to-principal commercial transaction rather than a taxable service under Business Auxiliary Service (BAS) or Business Support Service (BSS). The Tribunal relied on facts showing CEVA issued its own transport documents, assumed legal responsibility for cargo, and bore commercial risks, confirming that it was not promoting or marketing the services of carriers.

Citing consistent precedents and CBEC Circular No. 197/7/2016, the Bench reiterated that freight forwarders contracting for space on their own account are not intermediaries or service providers to shipping lines. It further held that reimbursements from overseas group companies were mere cost-sharing and not taxable. The extended limitation was rejected, and the Order-in-Original dated 16.11.2015 was quashed entirely, deleting tax, interest, and penalties.

VASU HASMUKHBHAI VASOYA vs C.C.-AHMEDABAD CITATION : 2025 TAXSCAN (CESTAT) 1322

The Ahmedabad CESTAT set aside a ₹3,00,000 penalty imposed on Vasu Hasmukhbhai Vasoya under Section 112(a) of the Customs Act, holding that call-detail records and circumstantial inferences alone cannot establish abetment in an alleged gold smuggling case. The Tribunal noted that all calls between the appellant and the intercepted passenger occurred after the latter was already in Customs custody, no incriminating material was recovered from the appellant, and there was no culpatory statement or evidence linking him to the smuggled gold.

Finding that the Department’s case was built on assumptions without substantive corroboration, and that the appellant’s request for cross-examination was unjustifiably denied, the Bench held that the essential elements of knowledge or involvement required for penalty under Section 112(a) were not established. The appeal was accordingly allowed, and the penalty quashed.

Ahluwalia Contracts India Limited vs Commissioner ofCentralExcise, Bangalore-II CITATION : 2025 TAXSCAN (CESTAT) 1323

The Bengaluru CESTAT set aside excise duty demands against M/s Ahluwalia Contracts India Ltd., holding that the concrete produced at the BMRCL project site did not meet the standards of Ready Mix Concrete (RMC) under the Central Excise Tariff. The Tribunal found that the Department had provided no technical evidence—no sampling, inspection, or expert verification—to show that the product conformed to IS 4926, which defines RMC. Instead, the concrete was manufactured as per IS 456, making it conventional site-mixed concrete. The Tribunal also noted that reliance on the statement of a finance officer, who lacked technical knowledge, could not justify the classification as RMC.

Relying on CBEC Circular No. 368/1/98-CX and relevant excise notifications, the Bench held that concrete produced at the construction site for use in the project was not only non-excisable as RMC but was in any case exempt under Notification No. 4/2006-CE (till 16.03.2012) and Notification No. 12/2012-CE thereafter. Finding the duty, interest, and penalties unsustainable, the Tribunal set aside both orders-in-appeal and allowed the appeals with consequential relief.

Department Cannot Retain RCM Service Tax Without Authority of Law: CESTAT Allows Refund Claim u/s 142(3)

Avaya India Private Limited vs Commissioner of Central GST CITATION : 2025 TAXSCAN (CESTAT) 1324

The Mumbai CESTAT allowed the appeal and held that Avaya India Pvt. Ltd. is entitled to a cash refund of service tax paid under the Reverse Charge Mechanism (RCM) that could not be transitioned into GST. The Tribunal ruled that Section 142(3) of the CGST Act, 2017 overrides limitations under the earlier law and mandates that any amount found refundable—whether claimed before, on, or after the appointed day—must be paid in cash, except where Section 11B(2) of the Central Excise Act applies. Since the unutilised RCM-paid tax could not be carried forward into GST, it remained refundable in cash.

Setting aside the Commissioner (Appeals)’ order, the Tribunal emphasised that the refund claim had to be evaluated under existing law, but the mode of refund cash was dictated by Section 142(3). It found no legal bar on refunding RCM-paid service tax when the credit had not been transitioned and had not lapsed. The appeal was thus allowed, and the company was held entitled to full cash refund of the amount.

Confiscation cannot be Ordered for Re-exported Goods: CESTAT quashes Absolute Confiscation Order under Customs Act

M/s Chemspark India Pvt Ltd vs Commissioner of Customs,Nhava Sheva-I CITATION : 2025 TAXSCAN (CESTAT) 1325

The Mumbai Bench of CESTAT set aside an order directing absolute confiscation of Zinc Pyrithione imported by Chemspark India Pvt. Ltd., ruling that goods already re-exported before the Revenue’s appeal cannot later be subjected to confiscation under Section 111(d) of the Customs Act. The Tribunal emphasized that once the importer paid the redemption fine and penalty as ordered by the original authority and completed re-export, the goods were no longer within customs jurisdiction.

Since the consignment was not available in India at the time the Commissioner (Appeals) issued the confiscation order, the Tribunal held that such action was legally untenable. Allowing the appeal, it restored the adjudicating authority’s original decision permitting re-export and set aside the order of absolute confiscation.

Priyanka Devi Mourya vs Commissioner of Customs(Preventive) CITATION : 2025 TAXSCAN (CESTAT) 1326

The Kolkata Bench of CESTAT set aside the confiscation of betel nut consignments and penalties imposed on two importers after finding that the Revenue failed to prove the goods were smuggled. The Tribunal held that since betel nuts are not notified under Section 123 of the Customs Act, the burden of establishing foreign origin lies entirely on the Department, which relied solely on a test report from the Arecanut Research & Development Foundation—an institution not competent to determine origin.

Observing that there were no foreign markings, no proximity to an international border, and no independent evidence linking the goods to unlawful import, the Bench ruled that mere suspicion cannot replace legal proof. Accordingly, the confiscation and penalties under Section 112(b) were set aside, and the appeals were allowed with consequential relief.

M/s. Amiya Steel Pvt. Ltd. vs Commissioner of CGST &CentralExcise, Bolpur CITATION : 2025 TAXSCAN (CESTAT) 1327

The Kolkata CESTAT set aside excise duty, interest, and penalties levied on Amiya Steel Pvt. Ltd. and its officers, ruling that the allegation of clandestine removal of 1,733.02 MT of sponge iron was based entirely on third-party documents, untested statements, and uncertified electronic data seized from another company’s premises. The Tribunal noted that the Department never searched the assessee’s premises, found no stock discrepancy, vehicle movements, money trail, or any corroborative evidence, and failed to follow mandatory procedures under Section 9D for admitting statements or Section 36B for relying on electronic records.

Relying on precedents such as G-Tech Industries and Ramgarh Sponge Iron, the Bench held that statements recorded behind the assessee’s back some even two years after the initial search had no evidentiary value, and the denial of cross-examination further violated principles of natural justice. With no transport records, driver statements, raw-material discrepancies, or buyer confirmations to support claims of over 90 truckloads of alleged removals, the Tribunal found the demand entirely assumption-based. It accordingly struck down the entire duty demand and annulled all penalties on the company, its Director, and its Accountant.

Commissioner of Service Tax vs Bigtree EntertainmentPrivateLimited CITATION : 2025 TAXSCAN (CESTAT) 1329

The Mumbai Bench of CESTAT upheld the Commissioner’s decision, dropping demands against Bigtree Entertainment Pvt. Ltd., operator of BookMyShow, ruling that the company only provides an online ticketing platform and does not trade in cinema or event tickets. Since the base ticket price is collected purely on behalf of theatre owners or event organisers and Bigtree retains only the convenience fee on which it pays service tax, the Tribunal held there was no exempt service involved to trigger Rule 6 of the CENVAT Credit Rules, 2004.

Rejecting the Revenue’s view that ticket settlement amounted to “trading,” the Tribunal noted that Bigtree neither owns nor controls ticket inventory, and cinema tickets are not “goods” as per Supreme Court precedent. As only a single taxable service was provided, the Bench found Rule 6(3) inapplicable and dismissed the Revenue’s appeal, confirming that no CENVAT credit reversal was warranted.

M/s. Neo Metaliks Limited vs Commissioner of Central GoodsandService Tax CITATION : 2025 TAXSCAN (CESTAT) 1330

The Kolkata CESTAT set aside a duty demand of over ₹5.10 crore against Neo Metaliks Ltd., holding that the allegation of clandestine clearance of pig iron was based solely on theoretical input–output ratios declared in the ER-5 return, without any corroborative evidence as required under Section 11A of the Central Excise Act. The Tribunal noted that clandestine removal cannot be established through mathematical assumptions or audit-based computations alone, especially when no discrepancies were found in raw material procurement, electricity consumption, production records, dispatch activity, or stock levels.

The Bench further held that the extended limitation under Section 11A(4) was wrongly invoked, as the case relied entirely on data already disclosed in statutory returns, with no evidence of suppression or intent to evade duty. With no transport records, buyer statements, unaccounted sales, or other corroboration typically expected in such cases, the Tribunal found the computation mechanical and unsubstantiated. It accordingly set aside the entire duty, interest, and penalties, granting full relief to the appellant.

Wacker Chemie India Private Limited vs Commissioner ofServiceTax-VI CITATION : 2025 TAXSCAN (CESTAT) 1331

The Mumbai CESTAT held that services rendered by Wacker Chemie India Pvt. Ltd. to its German group company constituted export of services and could not be treated as intermediary activity. The Tribunal found that the technical testing, evaluation, and marketing support services were provided directly to the foreign recipient, with the benefits accruing outside India and payments received in convertible foreign exchange. Examining the service agreements, the Bench concluded that the arrangement reflected a principal–service provider relationship, not facilitation between two parties, and therefore did not fit the definition of “intermediary” under Rule 2(f) of the POPS Rules, 2012.

Since the service recipient was located outside India, the place of provision under Rule 3 of the POPS Rules was also outside the taxable territory, satisfying the conditions for export. The Tribunal held that accumulated CENVAT credit was eligible for refund under Rule 5, and that the lower authorities’ characterization of the services as intermediary activity contradicted established jurisprudence. It accordingly set aside the orders of the Commissioner (Appeals) and the adjudicating authority and directed that the refund be sanctioned in accordance with law.

Chem Trader Tankers Co. Ltd vs Commissioner of Customs,Import-II CITATION : 2025 TAXSCAN (CESTAT) 1332

The Mumbai CESTAT set aside penalties imposed on Chem Trader Tankers Co. Ltd. and another co-noticee, holding that the foundational Order-in-Original against the main importers had already been quashed in an earlier common decision dated 11 May 2023. In that ruling, the Tribunal found no evidence of covert loading at Iranian ports, freight suppression, or misdeclaration of origin, and held that additions to value under Rule 10 of the Customs Valuation Rules could not rest on mathematical reconstruction without proof of actual higher freight. As the differential duty, confiscation, and penalties against the importers were entirely annulled, the basis for penalising the co-noticees no longer existed.

Applying judicial discipline, the Bench noted that the Revenue had produced no stay or contrary order from a higher court. Since the primary allegations had already been found to be assumption-based and unsupported by evidence, the Tribunal held that penalties under Sections 112(a) and 114AA relating to abetment of improper import and alleged use of false documents were unsustainable. The impugned order was accordingly set aside, and the appeals were allowed with consequential relief.

M/s Shahabad Co-op Sugar Mills Ltd vs Commissioner ofCentralExcise & Service Tax CITATION : 2025 TAXSCAN (CESTAT) 1333

The Chandigarh Bench of the CESTAT set aside a service tax demand of ₹17.21 lakh raised against Shahabad Co-operative Sugar Mills Ltd., holding that the premium received on transfer of sugar export quota is not taxable under Business Auxiliary Service (BAS). The Tribunal observed that the transfer of export quota allotted by the Directorate of Sugar is a commercial sale of rights having intrinsic value and does not involve any element of service. Reliance was placed on settled judicial precedents recognizing transferable licenses and quotas as “goods” capable of being bought and sold.

Rejecting the department’s contention that the transaction facilitated business of other sugar units, the Bench held that the premium was consideration for sale of a government-granted privilege and not commission for any service. Following Supreme Court rulings and its earlier decision in UNN Sugar Complex, the Tribunal concluded that no taxable service was rendered and accordingly quashed the demand, allowing the appeal in full.

M/s. NHPC Ltd vs The Commissioner of Central Excise CITATION : 2025 TAXSCAN (CESTAT) 1334

The Kolkata Bench of CESTAT has ruled that NHPC Ltd.’s role under the Pradhan Mantri Gram Sadak Yojana (PMGSY) constituted full-fledged execution and maintenance of rural roads, and not merely consultancy services as alleged by the department. NHPC had taken up the project under a Tripartite Agreement with the State and Central Governments, which entrusted it with responsibilities such as construction, supervision, quality control, and five years of post-completion maintenance. Observing that these were bundled construction and maintenance services, the Tribunal held that they were squarely covered under the exemption available for road construction services under Notification No. 25/2012-ST.

The Tribunal also rejected the invocation of the extended period of limitation, noting that NHPC is a Government undertaking and no mala fide intent could be attributed. Since the demands were premised on a misclassification by the department and not on any suppression of facts, the entire service tax liability, along with interest and penalties, was found unsustainable. Consequently, CESTAT set aside the impugned orders and allowed the appeals in favour of NHPC, granting full relief.

M/s Uttarakhand Tent and Light House vs Commissioner ofCentralExcise & CGST " CITATION : 2025 TAXSCAN (CESTAT) 1335

The CESTAT Allahabad ruled that a service tax demand cannot be sustained—or the extended limitation period invoked when based solely on a mismatch between ST-3 returns and Form 26AS data. The Tribunal noted that M/s Uttarakhand Tent and Light House had regularly filed returns, and the alleged differential amount of ₹3,55,934 was merely reimbursement of labour charges, duly reflected on both the credit and debit sides of the Profit & Loss Account. No independent verification was conducted by the department, and the demand rested entirely on third-party data without any evidence of suppression.

Relying on the Supreme Court ruling in Pushpam Pharmaceuticals and the Tribunal’s decision in G.D. Goenka Pvt. Ltd., the Bench held that extended limitation under Section 73 requires proof of intent to evade tax, which was absent in this case. As no fraud or wilful suppression was established, the CESTAT set aside the demand of ₹53,390 along with penalties under Sections 77 and 78 in full.

Orbit Bearing India Pvt Limited vs Commissioner ofCentralExcise & ST, Rajkot CITATION : 2025 TAXSCAN (CESTAT) 1336

The Ahmedabad Bench of the CESTAT set aside the reverse charge service tax demand against Orbit Bearing India Pvt. Ltd., holding that the authorities had travelled beyond the scope of the Show Cause Notice (SCN). While the SCN proposed tax under one service category, the Commissioner (Appeals) reclassified certain services under “Management or Business Consultant Service,” which was never alleged in the notice. The Tribunal ruled that confirmation of tax under an unalleged service category is legally unsustainable, especially when the adjudicating authority itself had accepted that the services were not classifiable as proposed in the SCN.

The Tribunal further held that invocation of the extended limitation period was impermissible, as there was no finding of fraud, suppression, or intent to evade tax. All transactions were duly recorded in the appellant’s books and came to light only during audit, negating any suppression. Consequently, the demand beyond the normal limitation period, along with interest and penalties, was quashed, and the impugned orders were set aside to that extent.

M/s S K Petrochem vs Commissioner of Customs, Ludhiana CITATION : 2025 TAXSCAN (CESTAT) 1337

The Chandigarh Bench of the CESTAT set aside a differential customs duty demand against S K Petrochem, holding that provisional assessments cannot be finalized after an inordinate and unreasonable delay of over five years. Although Section 18 of the Customs Act, 1962 does not prescribe a specific time limit, the Tribunal observed that authorities are required to act within a reasonable period, noting CBEC instructions that provisional assessments should ordinarily be finalized within six months. The delay of 5-6 years in finalizing the assessments was held to be arbitrary and impermissible.

The Tribunal further held that a valid finalization of provisional assessment is a sine qua non for raising a demand under Section 28, and that no differential duty could be confirmed without issuing a proper Show Cause Notice after such finalization. Relying on the Supreme Court’s ruling in ITC Ltd., the Bench ruled that, in the absence of timely finalization and a separate SCN, the demand was unsustainable. Accordingly, the impugned orders were set aside and the appeal was allowed.

M/s S K Petrochem vs Commissioner of Customs, Ludhiana CITATION : 2025 TAXSCAN (CESTAT) 1337

The Chandigarh Bench of the CESTAT held that for provisionally assessed imports, the “relevant date” for limitation under Section 28 of the Customs Act, 1962 is the date of adjustment of duty after final assessment. In the case of S K Petrochem, the Tribunal noted that the provisional assessments of Rubber Processing Oil imports made during 2011–12 were finalized after an inordinate delay of over five years. Relying on the Supreme Court’s ruling in ITC Ltd., the Bench emphasized that finalization of provisional assessment under Section 18 is a sine qua non for initiating recovery proceedings under Section 28.

The Tribunal rejected the Revenue’s contention that a demand under Section 28 could be raised without a separate Show Cause Notice, holding that such an interpretation would render the statutory definition of “relevant date” otiose. Since the assessment was not finalized within a reasonable time and no valid SCN under Section 28 was issued after such finalization, the differential duty demand of ₹45 lakh was held to be unsustainable. Accordingly, the impugned orders were set aside and the appeal was allowed.

M/s.Face IT Systems LLP vs Commissioner of Customs CITATION : 2025 TAXSCAN (CESTAT) 1338

The Kolkata Bench of the CESTAT held that face-recognition access control systems qualify as Automatic Data Processing (ADP) Machines under Tariff Heading 8471, and not as electrical machinery under Heading 8543. The Tribunal accepted the appellant’s classification, noting that the devices had independent memory, processing capability, embedded Linux OS, facial data conversion, and automatic authentication functions, satisfying all four conditions of Chapter Note 6(A) to Chapter 84. Reliance was placed on expert technical reports from STQC and Jadavpur University, as well as earlier rulings in STJ Electronics and Invixim Access, which recognized biometric devices as ADP machines.

Accordingly, the Tribunal set aside the customs duty demands, confiscation, and penalties imposed on M/s Face IT Systems LLP and connected parties. It held that the dispute was purely one of classification, making invocation of the extended limitation period impermissible, and quashed the demands relating to 48 past consignments as time-barred. All appeals were allowed with consequential relief.

M/s Hindustan Steelworks Construction Ltd vs CommissionerofCentral Excise & Service Tax, Visakhapatnam - I CITATION : 2025 TAXSCAN (CESTAT) 1339

The Hyderabad Bench of the CESTAT held that internal shifting and handling of steel materials within the Visakhapatnam Steel Plant did not constitute Cargo Handling Service (CHS) prior to the 16.05.2008 amendment, which first expanded the definition to include “goods.” The Tribunal noted that the activities such as unloading, stacking, cutting, bending, and internal transportation were confined to movement within the factory premises and did not involve “cargo” as understood under the statute. Relying on earlier decisions, the Bench rejected the department’s attempt to tax such internal material handling as CHS and set aside the related demands against both HSCL and its sub-contractor, Visakha Constructions.

On other service categories, the Tribunal partly sustained demands against HSCL under Management, Maintenance or Repair Service (MMRS) and Commercial or Industrial Construction Service (CICS), but quashed the demand under Manpower Recruitment or Supply Agency Service (MRSAS) as the services were rendered prior to the levy’s introduction on 16.06.2005. In Visakha’s case, the entire demand was set aside, with the Tribunal holding that the extended limitation period was not invocable due to bona fide belief and legal ambiguity. Consequently, Visakha’s appeal was fully allowed, while HSCL’s appeal was partly allowed.

Ahluwalia Contracts India Limited vs Commissioner ofCentralExcise, Bangalore-II

CITATION : 2025 TAXSCAN (CESTAT) 1340

The Bangalore Bench of the CESTAT set aside the excise duty demand against Ahluwalia Contracts India Limited, holding that the concrete mix manufactured at the construction site for the Bengaluru Metro Rail Corporation Ltd. did not qualify as excisable “Ready Mix Concrete” (RMC). The Tribunal noted that the appellant produced site-mixed concrete for captive consumption in construction, conforming to Indian Standard IS 456, whereas RMC is governed by IS 4926 and is typically manufactured in a factory and supplied to sites, as clarified by CBIC Circular No. 368/1/98-CX.

The Bench found that the Department failed to establish that the product was RMC, as no samples were drawn, no technical examination was conducted, and the findings relied merely on the statement of a non-technical officer. It further observed that site-manufactured concrete mix was exempt from duty under applicable notifications during the relevant period. Accordingly, the Tribunal set aside the duty demand, interest, and penalties, and allowed the appeals filed by the company and its General Manager.

M/s Polmor Steels Pvt Ltd. vs Commissioner Of CentralTaxMedchal - GST CITATION : 2025 TAXSCAN (CESTAT) 1341

The Hyderabad Bench of the CESTAT allowed the appeal of Polmor Steels Pvt. Ltd., holding that door pillars and side pillars manufactured on job work for Delhi Metro coaches were not marketable goods and therefore not excisable. The Tribunal found that the pillars were produced strictly as per Bombardier’s drawings and specifications, had no independent marketability, and were never bought or sold in the market. Since the appellant merely undertook job work and received job-work charges, ownership of both raw materials and processed goods remained with Bombardier.

The Tribunal further held that even if the process amounted to manufacture, the duty liability rested on the raw material supplier, not the job worker, in terms of Notification No. 214/86-CE, as Bombardier had furnished the required undertaking. Relying on earlier precedents, the Bench ruled that any breach of the notification conditions could only be attributed to the principal manufacturer. Finding no suppression of facts, the extended limitation was held inapplicable, and the duty demand and penalties were set aside.

M/s. Omaxe Buildhome vs Commissioner of GST Delhi-East CITATION : 2025 TAXSCAN (CESTAT) 1342

The CESTAT Delhi ruled that car parking charges collected by Omaxe Buildhome Ltd. between July 2010 and June 2012 were not taxable as part of “construction of complex services,” since the charges were separately identified in the builder-buyer agreement and were not covered under the service tax provisions in force before the negative list regime began on 1 July 2012. The Tribunal noted that Omaxe had already paid service tax on the basic sale price and started paying tax on parking charges only once the law changed.

Rejecting the Department’s reliance on extended limitation and allegations of suppression, the Bench held that all necessary records and details were provided, and mere audit observations cannot imply intent to evade tax. It concluded that there was no statutory basis for taxing independent parking charges for the relevant period, and therefore set aside the entire demand, including interest and penalties.

M/s Mars International India Pvt Ltd. vs Commissioner OfCentralTax Hyderabad - II CITATION : 2025 TAXSCAN (CESTAT) 1343

The Hyderabad Bench of the CESTAT granted major relief to Mars International India Pvt. Ltd., holding that where an exemption notification under the Finance Act, 1994 does not prescribe any time limit or procedural restriction, the benefit can be claimed at any stage of the proceedings, including during adjudication or appeal. The Tribunal rejected the department’s contention that exemption under Notification No. 34/2004-STcould be denied merely because it was not claimed in the ST-3 returns, particularly in respect of freight amounts where the consignment value was below ₹1,500.

Relying on the Supreme Court’s ruling in Share Medical Care, the Tribunal reiterated that in the absence of a statutory time bar, exemption benefits cannot be denied on procedural grounds. It held that failure to claim the exemption at the return stage does not disentitle an assessee from availing it later. Consequently, the Tribunal set aside the entire demand of service tax along with interest and penalties, allowing the appeal in full.

M/s Mars International India Pvt Ltd. vs Commissioner OfCentralTax Hyderabad - II CITATION : 2025 TAXSCAN (CESTAT) 1343

The Hyderabad Bench of CESTAT granted significant relief to Mars International India Pvt. Ltd., setting aside multiple Service Tax demands arising from an audit covering 2006–2011. The Tribunal held that freight reimbursements did not attract GTA services as no consignment note was issued and the appellant did not directly pay for the transport. Similarly, seconded expatriate employees did not constitute taxable management or business consultancy, as the arrangement was employment-based and did not fall under manpower supply, in line with Supreme Court rulings on such secondment models.

Regarding R&D expenditures shared with foreign group entities, the Tribunal ruled that the recipients were not recognized scientists, technocrats, or scientific institutions under the Finance Act, and mere cost allocation without an actual service could not trigger taxability. Consequently, the Tribunal held the Service Tax demands, interest, and penalties including those under Section 78 and extended period invocation unsustainable, and allowed the appeal in full.

Indian Tobacco Traders vs Commissioner Of Central TaxGuntur -GST CITATION : 2025 TAXSCAN (CESTAT) 1344

The Hyderabad Bench of the CESTAT set aside the Service Tax demands against Indian Tobacco Traders, holding that Goods Transport Agency (GTA) service cannot be levied in the absence of a consignment note. The Tribunal noted that the appellant had engaged individual truck owners for transportation of tobacco leaves and processed products, who merely collected freight charges and did not issue any consignment notes. Since issuance of a consignment note is a mandatory statutory requirement under Section 65B(26) of the Finance Act, 1994 read with Rule 4B of the Service Tax Rules, 1994, the essential condition for treating the service as GTA was not satisfied.

Rejecting the Department’s contention that informal slips or oral arrangements could substitute a consignment note, the Tribunal held that without such a document, no GTA service arises and consequently no Service Tax liability can be fastened. As the Department failed to establish the existence of a valid consignment note for the relevant periods, the Tribunal set aside the demands of tax, interest, and penalties, allowing all three appeals with consequential relief.

"M/s.Audi Motors Pvt. Ltd vs Commissioner of CGSTandCentral Excise Commissionerate, Jodhpur" CITATION : 2025 TAXSCAN (CESTAT) 1345

The CESTAT New Delhi set aside a service tax demand of ₹2.21 crore against Audi Motors Pvt. Ltd. and its Accountant, holding that incentives and discounts received from Maruti Suzuki India Ltd. were purely trade discounts linked to vehicle purchases and sales targets not consideration for any taxable service. The Tribunal relied on precedent, including Rohan Motors and the Larger Bench ruling in Kafila Hospitality, to reaffirm that dealers operate on a principal-to-principal basis and achieve sales targets primarily to promote their own business, even if manufacturers also benefit.

Examining the dealership agreement, the Bench found the relationship to be that of buyer and seller, with onward sale of vehicles involving transfer of property in goods, a transaction expressly excluded from the definition of “service” and falling under the negative list for trading of goods. Accordingly, the Tribunal held that no service tax was payable, set aside the order, and allowed the appeals in full without delving into limitation issues.

M/s. PSL Limited vs Commissioner of GST and Central Excise CITATION : 2025 TAXSCAN (CESTAT) 1346

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that statutory dues not included in an approved resolution plan under the Insolvency and Bankruptcy Code (IBC), 2016 stand extinguished. PSL Limited challenged the revenue’s attempt to recover excise dues despite the NCLT-sanctioned resolution plan, which the department had participated in and for which its claim had been considered.

The two-member bench, comprising Vasa Seshagiri Rao and P. Dinesha, relying on the Supreme Court ruling in Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., held that claims not incorporated in the resolution plan, including statutory dues, cannot be enforced once the plan is approved under Section 31(1) of the IBC. Since the department had participated in the CIRP and the dues were not part of the plan, the demand was non-recoverable, and the appeal was dismissed.

M/s.Promising Exports Limited vs DevelopmentCommissioner,FaltaSpecial Economic Zone CITATION : 2025 TAXSCAN (CESTAT) 1347

The Kolkata Bench of CESTAT held that a supplementary drawback claim filed by M/s Promising Exports Limited after receipt of the revised valuation report from the Apparel Export Promotion Council (AEPC) was well within the prescribed limitation under Rule 15 of the Customs, Central Excise Duties & Service Tax Drawback Rules, 1995.

The Bench further noted that the appellant had consistently followed up with the authorities regarding the revaluation of exported goods and filed the supplementary claim promptly on 3 January 2008, shortly after receiving the updated report dated 5 October 2007. Considering this timely action, the Tribunal concluded that no delay could be attributed to the appellant. Accordingly, the impugned orders dated 12 and 13 December 2017 were set aside, and the matter was remitted to the Development Commissioner, Falta SEZ, with directions to review the supplemental claims in light of the AEPC valuation and sanction the eligible amount of drawback.

Mirambica Construction Co vs Commissioner CITATION : 2025 TAXSCAN (CESTAT) 1349

The CESTAT Ahmedabad held that the construction of residential quarters for Gujarat State Police Housing Corporation Ltd. and other state departments was exempt from service tax, as such projects qualify as services provided to the government for its “personal use” under the definition of “Residential Complex” in the Finance Act, 1994. Relying on earlier rulings like CR Patel and Khurana Engineering, the Tribunal concluded that housing for government employees falls outside the taxable category, and therefore set aside the demands raised under construction and works contract services.

However, the Tribunal upheld the ₹9,33,199 service tax demand on Goods Transport Agency services under reverse charge, as the appellant failed to substantiate the exemption claim for freight below ₹1,500 per trip. With this partial relief, the appeal was allowed to the extent of deleting the tax, interest, and penalty related to the construction services.

Nachiket Satishbhai Mavalankar vs C.C. – Ahmedabad CITATION : 2025 TAXSCAN (CESTAT) 1350

The Ahmedabad Bench of the CESTAT set aside penalties imposed on Nachiket Satishbhai Mavalankar under Sections 114(3) and 114AA of the Customs Act, 1962, holding that penalties cannot be sustained in the absence of proven knowledge of mis-declaration. The Tribunal noted that the Order-in-Original itself recorded that statements of key persons did not attribute any knowledge of mis-declaration to the appellant, despite suspicion arising from an allegedly erroneous valuation certificate linked to an intercepted export consignment.

The Tribunal found that the Commissioner (Appeals) had taken a factually inconsistent view by concluding that the appellant knowingly signed a false valuation certificate, contrary to the findings of the original authority. Relying on settled judicial precedents, the Bench held that knowledge and intent are mandatory ingredients for invoking Sections 114 and 114AA. As these elements were not established, the penalties of ₹10 lakh were held to be unsustainable and were accordingly set aside.