Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 4)
This article summarises all CESTAT orders published in the Taxscan.in.
No Service Tax on Installation Charges on Machinery Imported under EPCG Scheme: CESTAT Powerband Industries Pvt Ltd vs C.C.E. & S.T.-Daman 2025 TAXSCAN (CESTAT) 251 Atul Gupta and Varun Gaba appearing for PFCL submitted before CESTAT that the definition of "Manpower recruitment or supply agency services" requires the service provider providing the said services to...
No Service Tax on Installation Charges on Machinery Imported under EPCG Scheme: CESTAT
Powerband Industries Pvt Ltd vs C.C.E. & S.T.-Daman 2025 TAXSCAN (CESTAT) 251
Atul Gupta and Varun Gaba appearing for PFCL submitted before CESTAT that the definition of "Manpower recruitment or supply agency services" requires the service provider providing the said services to be conducting the same in their normal course of business.
Placing reliance on the decision by the Chennai Bench of CESTAT in Orient Processors Vs. Commissioner of Customs EX. & ST , Tirunelveli (2019) where it was held that erection, commissioning, or installation charges on imported machinery cannot be taxed separately under service tax laws when already accounted for under customs valuation.
The two-member Bench of Judicial Member Somesh Arora and Technical Member C.L. Mahar observed that under the EPCG scheme, the exemption from customs duty is conditional, and in case of any default, duty shall be payable on the declared import value, which includes installation and commissioning charges.
Export Duty Not Payable on Indian Refractory Mortar: CESTAT
Commissioner of Customs (Port) vs M/s Alliance International 2025 TAXSCAN (CESTAT) 253
The respondents/assessee, Alliance International, engaged in the export of a product designated as "Indian Refractory Mortar" by classifying it under CTH 38160000, which exempts it from export duties. The product exported by the respondent and declared as "Indian Refractory Mortar" under CTH 38160000 was actually Chrome Ore Concentrate, which should properly and lawfully be classified under CTH 2610, which is subject to 30% export duty under Schedule II of the Customs Tariff Act, 1975, according to an intelligence report from the Directorate of Revenue Intelligence, Bangalore Zonal Unit, Bangalore. Furthermore, it seems that the respondents had developed such a system in terms of export policy.
DRI launched an investigation and carried out search operations at the respondents' locations on September 10 and 11, 2020, based on the aforementioned intelligence. Statements were also recorded during these operations. Additionally, several documents were found. The respondents were accused of intentionally and willfully misclassifying under CTH 38160000 instead of the correct CTH 2610, and of exporting "Chrome Ore Concentrate" under the name and guise of "Indian Refractory Mortar" based on their email addresses.
The two member bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) has observed that the goods, Indian Refractory Mortar cannot be classified under CTH 2610, therefore, no export duty payable by the respondent/assessee.
Tribunal Not Competent to Remand Matter Back to Authority other than one which passed Order : CESTAT
Principal Commissioner of Customs (Preventive) vs Blue RibbonEmporium 2025 TAXSCAN (CESTAT) 254
The appeal was filed by the Principal Commissioner of Customs (Preventive), Mumbai, in response to an order that dismissed a show-cause notice that was sent to seven individuals. The proposals were confirmed, with the exception of M/s CEAL Shipping & Logistics Private Ltd, which was released from penalty liability under section 114AA of the Customs Act, 1962, while imposing penalty under section 114 of the same Act.
According to the CESTAT, the Tribunal's jurisdictional structure allows it to either confirm, amend, or revoke a decision or order in an appeal or return the case to the original entity that made the decision, with or without guidance. The tribunal determined that the appeal was unsuccessful because the requested remedy was outside the purview of the authority granted to it under section 129B of the Customs Act of 1962.
The two member bench of C J Mathew (Technical Member) and Ajay Sharma (Judicial Member) while dismissing the customs department’s appeal held that the appeal does not succeed as the relief sought therein is beyond the scope of the jurisdiction assigned to the Tribunal in section 129B of Customs Act, 1962.
Relief to Hindustan Coca Cola , CCR Rule 3(1) Obligation Cannot Be Transferred to Credit Recipient: CESTAT
Hindustan Coca-Cola Beverages Pvt Ltd vs Commissioner of CGST& Customs 2025 TAXSCAN (CESTAT) 255
Hindustan Coca-Cola Beverages Pvt Ltd, Raigarh, the appellant, is registered as an "input service distributor (ISD)" and has taken the disputed credit for being passed on to a number of their undertakings, including the appellant in this case, under the authority of rule 7 of the CENVAT Credit Rules, 2004.
The appellant argued that neither the "provider of service's" or the "input service distributor's (ISD)" payment of tax liability was in question and that the main issue was the connection between the service they had purchased and their activities, which was outside the purview of rule 7 of the CENVAT Credit Rules, 2004.
While allowing the appeal, the department stated that the credit has to be accounted for only by the manufacturing unit or service providing unit which a ‘distributor’ is not. The Tribunal set aside the orders which were passed without authority of law.
Wrong Availment of Exemption Notification Does Not Prove Intention was to Evade Payment of Central Excise Duty: CESTAT
M/s. Aglowmed Ltd vs Commissioner Central Goods and Service Tax 2025 TAXSCAN (CESTAT) 256
Since December 25, 2004, Aglowmed, the assessee, which manufactures food products and allopathic medications, has been using an Area Based Exemption for excisable goods. The audit team noticed that the assessee had not paid enough excise tax since it was unable to receive the benefits of the exemption notification.
According to the Tribunal, the Commissioner determined that the deliberate clearance of goods at a lower duty rate was necessary since the assessee had failed to meet the requirements outlined in the Exemption Notification. The Commissioner has not given the assessee's response the proper consideration. Therefore, the prolonged term of limitation under section 11A (4) of the Central Excise Act could not have been used if the assessee had not intended to avoid paying the service.
Although it may eventually be decided that the assessee is not entitled to the benefit of the Exemption Notification, the Tribunal accepted the assessee's argument that it genuinely believed it was entitled to do so. Therefore, it cannot be said that the belief was mala fide.
CESTAT Allows CENVAT Credit on 'Catch Covers' Used in Physician Samples
Softsule Pvt. Ltd vs Commissioner of Central Excise, Mumbai-III 2025 TAXSCAN (CESTAT) 257
Softsule Pvt. Ltd., appellant-assessee engaged in the manufacturing of pharmaceutical products, had availed CENVAT credit on ‘catch covers’ used for physician samples. However, the revenue authorities denied the credit, arguing that these covers were not used as inputs in the manufacture of final products. They further contended that the cost of catch covers was not included in the assessable value of the final product. The Commissioner (Appeals) upheld this view, leading the assessee to file an appeal before CESTAT.
The tribunal examined Rule 3 of the CENVAT Credit Rules, 2004, which allows manufacturers to claim credit on inputs used in the manufacturing process. The tribunal noted that the revenue had not alleged that the catch covers were not received by the assessee or that duty was not paid by the supplier. Since the materials were received in the factory for their intended purpose, the tribunal ruled that the department’s argument was invalid. The tribunal clarified that the law does not require the cost of packing material to be included in the final product’s value to claim credit.
In Conclusion, the tribunal set aside the impugned order and allowed the appeal in favor of the appellant.
Appeal Against Suspension of CHA License Dismissed as Infructuous by CESTAT
M/s.Shri Krishna Logistics Solutions vs The Commissioner ofCustoms 2025 TAXSCAN (CESTAT) 258
During the hearing on December 12, 2024, Advocate S. Murugappan, representing M/s. Shri Krishna Logistics Solutions, informed the tribunal that a subsequent Order-in-Original No. 48262/2016, dated July 8, 2016, had been issued. In this order, the Commissioner did not revoke the CHA license but imposed a penalty of Rs.50,000 on the appellant. Additionally, the Revenue has appealed this penalty before the CESTAT in Appeal No. C/42048/2016, which is currently pending. Given these developments, Advocate Murugappan argued that the original appeal regarding the suspension had become infructuous.
The tribunal, comprising. P. Dinesha, Member (Judicial), and M Ajit Kumar, Member (Technical), reviewed the case records and concurred with the appellant's position. Tribunal noted that since a final order had been issued imposing a penalty without revoking the license, the initial appeal against the suspension was no longer relevant.
Consequently, the tribunal dismissed the appeal as infructuous.
Unjustified Procedural Delays by Authorities: CESTAT sets aside Customs Broker License Revocation Order
M Dharamdas & Co vs Commissioner of Customs (General) 2025 TAXSCAN (CESTAT) 259
M Dharamdas & Co., the appellant, was a licensed customs broker handling the import of cranes. The customs authorities alleged that the appellant had violated multiple provisions of the Customs House Agents Licensing Regulations, 2004, and later the Customs Brokers Licensing Regulations, 2013. The Commissioner of Customs (General), Mumbai, issued an order revoking the customs broker license and forfeiting the security deposit.
The tribunal observed that the customs authorities failed to provide any explanation for the delay and that procedural deadlines cannot be bypassed arbitrarily. The tribunal held that in the absence of a valid justification, the revocation order was not sustainable. Without digging deeper into the merits of the case, CESTAT set aside the revocation order and allowed the appeal.
CESTAT Kolkata Rules Packaging Services as Manufacturing, Exempts from Service Tax
M/s Emami Limited vs Commissioner of CGST & Central Excise 2025 TAXSCAN (CESTAT) 260
The CESTAT Kolkata reviewed the case and ruled in favor of Emami Limited and Pradip Das, stating that the packaging activity qualifies as manufacturing under Section 2(f) of the Central Excise Act, 1944. The tribunal observed that Chapter Notes 5 and 6 of Chapters 30 and 33 of the Central Excise Tariff Act, 1985, specifically classify the process of packaging bulk goods into retail packs as manufacture. Since manufacturing processes are excluded from service tax under Section 66D(f) of the Finance Act, 1994, the tribunal held that no service tax could be levied on the job work contracts executed by the contractors.
The Revenue had invoked the extended limitation period to justify the tax demand, arguing that Emami Limited and Pradip Das had suppressed material facts. The tribunal rejected this argument, stating that the appellants had disclosed their activities and agreements to the tax authorities, and there was no deliberate misrepresentation. The tribunal cited the Supreme Court ruling in International Merchandising Co. LLC v. CST, New Delhi (2022), which held that extended limitation cannot be applied in cases involving interpretation of tax laws.
Challenge on Service Tax Liability on Income Generated out of ‘Renting Out Immovable Properties’ of Municipality: CESTAT remands Matter
M/s. Velur Town Panchayat vs Commissioner of GST and CentralExcise 2025 TAXSCAN (CESTAT) 261
The Appellant was rendering services under the category of “Renting of Immovable Property Service” by renting out immovable properties such as shops, commercial complex, etc. The department alleged that the Appellant had failed to obtain service tax registration and remit Service Tax. A Show Cause Notice dated 17.04.2013 was issued to the Appellant demanding service tax for the period from October 2007 to March 2012 which was adjudicated and appealed against.
Consultant R. Balagopal representing the appellant has submitted that M/s. Velur Town Panchayat owns a number of immovable properties, vacant land, markets, etc., which have been leased for specific period by tender-cum-public auction as per the State Government orders, which is a creature of an Act of the Tamil Nadu Legislature and is the statutory body being governed by the Tamil Nadu District Municipalities Act, 1920 and it is an autonomous self-government in terms of the Article 243Q of the Constitution of India.
It was held that the Government or local authority is exempted from payment of service tax on Renting of Immovable Property.
CESTAT quashes Demand Order on Lack of Evidence against Clandestine Clearance Allegations, slashes Penalty on Directors
Sri Deepak Keshan M/s. Budge Budge Refineries Ltd vsCommissioner of Central Excise Kolkata-VII Commissionerate 2025 TAXSCAN (CESTAT) 262
The tribunal observed that the demand for clandestine removal was based solely on presumptions and lacked tangible evidence. The adjudicating authority had relied on a comparison between laboratory registers and dispatch registers, but the tribunal found no concrete evidence to support the allegation of clandestine clearance. The tribunal emphasized that allegations of such a serious nature require tangible evidence, which was absent in this case. Consequently, the demand was set aside as unsustainable.
The CESTAT further observed that ‘there is no statements recorded from the buyers of the clandestinely cleared goods. with some details of illicit manufacture and clearance. The department must have brought proof of actual transportation of goods, cleared without payment of duty. ‘
In its final order, the CESTAT disposed of all appeals, upholding certain demands while setting aside others due to lack of evidence.
Reimbursements Received Cannot Considered as 'Consideration' Towards Any Taxable Service: CESTAT
M/s. Assam Gas Company Limited vs Commissioner of Central Excise& Service Tax 2025 TAXSCAN (CESTAT) 263
The assessee received a show-cause notice. The Commissioner affirmed the service tax demand. The assessee, who was upset with the Commissioner's decision, appealed it to the Central Excise & Service Tax Commissioner, who affirmed the Commissioner's ruling. Before the Tribunal, the assessee has contested the Central Excise & Service Tax Commissioner's ruling.
As the Lead Partner with a 51 percent stake, the assessee's services are for themselves and no other company, according to the two-member bench of Ashok Jindal (President) and K. Anpazhakan (Technical). Therefore, the transaction does not involve a relationship between a service provider and a service recipient. According to the Tribunal, the assessee's reimbursements cannot be regarded as "consideration" for any taxable services.
"The personnel engaged are the employees of the assessee company and the assessee is paying all salaries etc. to such employees," the Tribunal said in granting the appeal. The JV only reimburses the actual cost of these employees' salaries. Therefore, according to rule 2(g) of the Service Tax Rules, the entire agreement between the assessee and the JV does not constitute a taxable service of manpower supply service.
Absence of Recorded Reasonable Belief for Smuggling Case: CESTAT quashes Confiscation of Gold
Shri Prasanta Sarkar vs Commissioner of Customs (Preventive) 2025 TAXSCAN (CESTAT) 264
The appellants challenged the order before the Commissioner of Customs (Appeals), who dismissed the appeal as time-barred.
The bench observed that the appellants had produced documents to support their claim of legitimate possession, and there was no evidence to prove that the gold was smuggled. The Tribunal also found that the provisions of Section 111(b) and 111(d) of the Customs Act, which deal with the confiscation of goods imported in violation of specified routes or prohibitions, were not applicable in this case.
The Tribunal noted that mere suspicion or the presence of foreign markings on gold does not establish illegal importation, especially when the appellants had provided documents to support their claim of legitimate possession.
CESTAT quashes Service Tax Demand on Auto Service Provider, Holds VAT-Paid Transactions not Liable
Om Parkash Chugh vs Commissioner of Central Goods & ServiceTax 2025 TAXSCAN (CESTAT) 265
The CESTAT observed that the adjudicating authority had misinterpreted a 2007 circular and failed to consider the full text, which was later clarified in the case of M. G. Motors vs. CCE, Alwar.
The bench was of the view that when invoices show the value of goods and service charges separately and VAT is paid on the goods, service tax should only be levied on the service component.
CESTAT also relied on the case of Samtech Industries vs. CCE, Kanpur, where it was held that if VAT is paid on goods used in providing a service, those goods cannot be included in the assessable value for service tax.
Export Proceeded after Customs Clearance and Receival of Foreign Remittance: CESTAT quashes Penalty u/s 114
M/s. Samudera Shipping Line (India) Pvt. Ltd vs Commissioner ofCustoms (Port) 2025 TAXSCAN (CESTAT) 266
The appellant, M/s Samudera Shipping Line (India) Pvt. Ltd acts as a streamer agent carrying out import and export activities of other clients. The revenue imposed a penalty of ₹2 lakhs under Section 114 of the Customs Act, on the ground that the appellant had not followed proper procedures and had exported goods for which the Let Export Order (LEO) had been cancelled.
After hearing both sides, the tribunal held that the Order-in-Original clearly stated that export remittance was received against the said consignment. Similarly, it was noted that the customs website indicated the shipment as "Ready for Shipment," leading the appellant to reasonably believe that the export was authorised.
The tribunal observed that the shipment was eventually exported with customs clearance, suggesting that at some point, customs authorities allowed the consignment to proceed. It was also noted that the revenue did not dispute the fact that the export actually took place and that the foreign exchange remittance was duly received.
Commissioner (Appeals) cannot Introduce and decide issues Beyond SCN Allegations in Appeals: CESTAT in KPMG Ltd Matter
M/s KPMG Advisory Services Pvt. Ltd vs Commissioner of CGST andCentral Gurgaon 2025 TAXSCAN (CESTAT) 267
The Commissioner (Appeals) ruled in favor of the appellant, confirming that the IGST payment was in order. The Commissioner (Appeals) went beyond the scope of the SCN by introducing a new issue that denied the appellant’s right to avail of CENVAT credit on the IGST paid.
On the other hand, the revenue supported the findings of the Commissioner (Appeals) and argued that the denial of CENVAT credit was justified.
The single-member bench comprising P. Anjani Kumar (Technical Member) observed that the Commissioner (Appeals) was not free to set up a new case during the appellate proceedings, as the SCN serves as the foundation of tax disputes.
CESTAT Finds SEZ Service Tax Refund Rejection of Piramal Enterprises Unjustified, Orders Fresh Adjudication
Piramal Enterprises Pvt Limited vs Principal Commissioner ofCGST & Central Excise 2025 TAXSCAN (CESTAT) 268
The company’s refund claim was rejected by the Assistant Commissioner on the grounds that it failed to provide sufficient documentary evidence, such as invoices, sales ledgers, and sales registers, to prove that the services were exclusively used for authorized SEZ operations.
Although the company appealed before the Commissioner (Appeals), there were no favorable results.
CESTAT found that the jurisdictional range Superintendent had verified that the majority of the services were used for SEZ operations, as evidenced by the ST-3 returns filed by Piramal Enterprises for the year 2013-14. The returns showed that clearances against exports amounted to Rs. 30,21,15,806, while DTA clearances were only Rs. 1,95,84,432. The superintendent also noted that telecommunication services were used for both SEZ and DTA units and recommended that the refund be allowed as per the provisions of Notification No. 12/2013-ST.
CESTAT Waives Penalties for Reliance Stainless Steel and Co-Noticees, Grants Relief under SVLDRS-2019 Scheme
Reliance Stainless Steel vs C.C.E. & S.T.-Daman 2025 TAXSCAN (CESTAT) 269
The case involved appeals filed by Reliance Stainless Steel, M K Steel Centre, and Mahendra R Shah, the director of M/S SMC Stainless Alloy Pvt Ltd.
The main issue in the case was whether the penalties imposed on the co-noticees could be waived if the main party had already settled the duty demand under the SVLDRS-2019 scheme. The advocate for M K Steel Centre and Mahendra R Shah sought relief for his clients, relying on a previous decision in the case of Prakash Steelage Ltd Vs. C.C.E & S.T- Bharuch, where the tribunal had ruled that once a duty demand case is settled under SVLDRS-2019, penalties on both the main assessee and co-noticees are waived.
The CESTAT, comprising Somesh Arora (Judicial Member), allowed the assessee’s appeal and the penalties were waived for all three appellants.
Telecom towers & PBFs are 'goods' & qualify as Inputs under Rule 2(k): CESTAT allows Vodafone Idea to avail CENVAT Credit
M/s Vodafone Idea Ltd vs Commissioner, Customs & CentralExcise 2025 TAXSCAN (CESTAT) 270
One of the issues in this present case was whether telecom towers and PFBs could be classified as "inputs" under Rule 2(k) of the CENVAT Credit Rules, which defines "input" as all goods used for providing any output service.
The tribunal relied on the decision of Bharti Airtel Ltd. V/s CCE, Pune SCC OnLine SC 3374 dated 20.11.2024 in which the Supreme Court observed that telecom towers and PFBs are indeed "goods" and not immovable property and that these structures are essential for providing mobile telecommunication services and are therefore "inputs" under Rule 2(k).
The CESTAT reached the conclusion that telecom towers and PFBs, though not electrical equipment themselves, are essential for the proper functioning of antennas and thus qualify as "inputs" under Rule 2(k).
Relief to Tata Chemicals: CESTAT Sets Aside Service Tax Demand on Export Services
M/s Tata Chemicals Ltd vs Commissioner of Central Excise &CGST 2025 TAXSCAN (CESTAT) 271
During an audit of Tata Chemicals' records for the financial years 2010-11 and 2011-12, the Service Tax Department observed that the services provided were Business Support Services (BSS) and Business Promotion Services (BPS), which were taxable under Indian law.
The tribunal observed that the services provided by Tata Chemicals were in the nature of BAS and not BSS or BPS. The tribunal also noted that the service recipient, Canpotex, was located outside India, and the services were provided to meet Canpotex's business needs. The tribunal further held that the payments received by Tata Chemicals from Canpotex were in the nature of discounts or incentives for the purchase of goods, which are not subject to service tax.
CESTAT noted that ‘all conditions of Rule 6A are fulfilled in the present case and the services rendered by the Appellant qualify as export of services.’
Telecom Towers and Shelters Qualify as Capital Goods, Vodafone Idea Entitled to CENVAT Credit: CESTAT
M/s Vodafone Idea Ltd vs Commissioner, Customs & CentralExcise 2025 TAXSCAN (CESTAT) 272
In this case, the appellant provides communications services and receives Cenvat credit. During the review of the appellant's record, it was discovered that the appellant had claimed CENVAT credit for a variety of things, including 'Tower', 'Shelter', 'Electric Setup', electronic equipment, and prefabricated shelters.
The Apex Court in the above-mentioned case also observed that ‘there cannot be any doubt that a mobile tower can be treated to be an accessory of antenna and BTS. Accordingly, since in terms of subclause (iii) of Rule 2(a)(A), all components, spares and accessories of such capital goods falling under sub-clause (i) Service Tax Appeal No.504, 1224 & 1257 of 2011 10 would also be treated as capital goods, a mobile tower can also be treated as “capital goods”.’
The CESTAT, comprising P. K. Chaudhary (Judicial Member) and Sanjiv Srivastava (Technical Member), held that towers and shelters qualify as capital goods and the assessee was eligible to claim CENVAT credit.
Relief for JSW Steels: CESTAT rules Bank Certificates as Valid Documents for Cenvat Credit Claim
M/s. JSW Steels Limited vs Commissioner of GST and CentralExcise 2025 TAXSCAN (CESTAT) 273
The appellant’s counsel argued that Indian Bank had centralized service tax registration, and its certificates contained all necessary details under Rule 4A of the Service Tax Rules and Rule 9(1)(f) of CCR, making them valid for Cenvat credit.
The department’s counsel argued that the certificates issued by Indian Bank branches were not prescribed documents under Rule 4A of the Service Tax Rules and, therefore, could not be used to claim Cenvat credit.
The tribunal found that the department was already aware of these transactions through the company’s returns, making the invocation of the extended period of limitation unjustified.
Havells India wins: CESTAT Classifies MCPCBs as LED Components, Not Independent Lighting Fixtures
PRINCIPAL COMMISSIONER, CUSTOMS vs HAVELLS INDIA LTD 2025 TAXSCAN (CESTAT) 274
The appellant did not appear before the tribunal, nor did it file any arguments or objections. The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that classification under customs law cannot be determined solely based on GST notifications and that the primary determining factor is the Customs Tariff Act, 1975.
The tribunal ruled that MCPCBs are components used in LED lamps but are not independent lighting fixtures themselves. The tribunal explained that Chapter 85 covers printed circuit boards, including those with metal cores, and that Chapter 94 applies only to finished lighting products. MCPCBs require further assembly before they become functional lighting devices, so they cannot be classified under CTH 94054090.
CESTAT Rejects Eveready Industries' Rs. 15.3 Lakh Excise Refund Claim by virtue of Unjust Enrichment Doctrine
M/s Eveready Industries India Ltd. vs Commissioner of CentralExcise 2025 TAXSCAN (CESTAT) 275
The refund claim was rejected by the Assistant Commissioner of Central Excise on the grounds of unjust enrichment.
The assessee who was aggrieved by the above decision appealed before the CESTAT for relief.
The bench relied on the decision of Addison & Co. Ltd. [2016 (339) ELT 177 (SC)], in which the apex court held that ‘the doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law.’
Relief to Hindustan Zinc: CESTAT Rules Service Tax u/s 66E(e) Requires Express Agreement to Tolerate an Act, Quashes Demand
M/s Hindustan Zinc Limited vs Commissioner of Central Goods,Service Tax and Central Excise 2025 TAXSCAN (CESTAT) 276
Hindustan Zinc Limited, the appellant, is engaged in mining operations. The dispute arose when the department alleged that the company had provided a “declared service” by tolerating contractual breaches and, in return, received penalties, fines, and forfeited amounts from its contractors.
The two-member bench, comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) observed that for an activity to be taxable under Section 66E(e), there must be a clear agreement specifying a consideration for tolerating an act, which was absent in this case. The tribunal also observed that penalties and forfeitures serve as deterrents and are not intended as consideration for service.
Imported Raw Materials for manufacturing mobiles & tablets Eligible for BCD Exemption on DTA Clearance: CESTAT grants Relief to Samsung India Electronics
M/s Samsung India Electronics Pvt. Ltd vs Commissioner ofCentral Excise 2025 TAXSCAN (CESTAT) 277
The appellant, M/s. Samsung India Electronics Pvt. Ltd has appealed against the order passed by the Principal Commissioner of the Excise Department, which confirmed a demand of Rs. 149.33 crores.
The bench going through various judgments noted that at the time of debonding, the value of raw material cleared has to be valued at the time of importation, and the rate of duty is the effective rate of duty leviable on the imported goods at the time of debonding.
The CESTAT relied on the case of Maneta Automotive Components P Ltd. [2015 (328) ELT 620 (T-Del)], in which the court held that ‘if some goods imported into India are fully and unconditionally exempt from Basic Customs Duty by some exemption notification while calculating the Central Excise Duty leviable on the DTA clearances of those goods, the Basic Customs Duty would have to be taken as nil, even if those DTA clearances are not in accordance with the conditions prescribed in para 6.8 of the Foreign Trade Policy.’
CESTAT Allows Kotak Mahindra to Avail Cenvat Credit on Insurance Premium Paid
M/s. Kotak Mahindra Bank Ltd. vs Commissioner of Service Tax-I 2025 TAXSCAN (CESTAT) 278
M/s. Kotak Mahindra Bank Ltd, the Appellant is a banking company governed under Banking Regulation Act, 1949 and it has been providing taxable services of banking and other financial services as well as discharging applicable Service Tax thereon under the Finance Act, 1994. Under the Deposit Insurance and Credit Guaranteed Corporation Act, 1961, which is commonly known as Deposit Insurance Act, banking companies are required to insure the deposits made by its customers/depositors in the Deposit Insurance Credit Guarantee Corporation, a Government of India enterprise so as to protect deposits of customers up to Rs.1,00,000/- per customer/depositor.
It was observed that premium is paid by the banks to the Deposit Insurance Corporation for providing the insurance service for which the banks pay service tax. It is this service tax paid by the banks on the insurance service received by the banks from the Deposit Insurance Corporation that is the bone of contention between the parties.
Service Tax Demand Order was received one month belatedly after its issuance: CESTAT allows Appeal of Mumbai Port Trust
Mumbai Port Trust vs Commissioner of Service Tax - I 2025 TAXSCAN (CESTAT) 279
The appellant, M/s Mumbai Port Trust, was in appeal against the demand of tax under section 73 of Finance Act, 1994 on alleged rendering of ‘port services’ in providing terminal facilities to Central and Western Railways for consideration, but Commissioner of Service Tax (Appeals-I), Mumbai, by order, declined to go into the merits on the ground that the appeal had been presented beyond the limitation prescribed in section 85 of Finance Act, 1994 which, with effect from 28th May 2012, was restricted to two months from the date of receipt of the order causing grievance and discretion in admitting appeal beyond further period of one month was contingent upon satisfaction of the first appellate authority that reasonable cause prevented filing.
A two member bench of C J Mathew, Member (Technical) and Ajay Sharma, Member (Judicial) found that the order under challenge had been issued on 18th May 2012 and there is no dispute over the receipt by the appellant on 4th June 2012. An amendment effected after issue of the said order could not but have incorporated the provisions afforded by the law as existing then and, consequently, the appeal could have been filed, even without seeking of condonation, within three months from the date of receipt.
Service Tax Leviable on Legal & Consultancy Services under RCM: CESTAT
Saisun Outsourcing Services Private Limited vs Commissioner ofCentral Goods 2025 TAXSCAN (CESTAT) 280
The two member bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has stated that “in absence of any reply or any supporting documents, Legal fees expense incurred by the assessee are expenses towards Legal services. Accordingly, Service Tax on Legal Fee expense incurred by the assessee is upheld.”
The Commissioner (Appeals) denied the appeal that the assessee had filed. Before the Tribunal, the assessee has contested the Commissioner's (Appeals) ruling. Since these receipts were recorded in the Profit & Loss account, the assessee argued that the Commissioner had made a mistake in comparing the Service Tax gross receipts as reported in Form 26AS with the receipts reported in the Profit & Loss account.
The bench found that there is no justification for interfering with the assessment of service tax liability against the assessee in the contested order since there is no genuine proof, such as an original invoice, demonstrating the true value of taxable services rendered by the assessee during the pertinent period.
Relief to Dish TV India Ltd, No Reversal of Cenvat Credit u/r 4(5)(a) of CCR on removal of Inputs to premises of Job Worker: CESTAT
M/s Dish TV India Limited vs Commissioner of Central GST &Central Excise 2025 TAXSCAN (CESTAT) 281
The appellants M/s Dish TV India Limited ( M/s Videocon D2H Limited ), are engaged in the business of providing broadcasting services through Direct-to-Home Satellite Television ( DTH ) broadcast. The said services are provided by the appellants, in terms of the license granted to them by the Telecom Regulatory Authority of India ( TRAI ). As per the condition of the license granted by TRAI, the appellants are statutorily required to provide and install various Customer Premises Equipments (CPEs) to the subscribers of Broadcasting Services. The various equipments that the appellants install at the premises of the subscribers/customers as part of the CPEs, include the Set Top Boxes (STB), Smart Cards, Dish Antenna, Cables, Low Noise Block Down Converter and other accessories, which collectively constitute as CPEs.
The bench viewed that the case of the appellants squarely falls under the scope and purview of Rule 4(5)(a) of the Rules of 2004 and that for removal of the CENVAT availed Smart-Cards to the STB manufacturer, they are not required to pay equal amount of CENVAT credit availed on such goods. The bench set aside the impugned order and allowed the appeal in favour of the appellants.
Relief to Standard Chartered Bank: CESTAT rules Mere Expense Allocation from SCB-UK to SCB-India not a Taxable Service
Standard Chartered Bank vs Commissioner of CGST & CX 2025 TAXSCAN (CESTAT) 282
SCB-India, the appellant, is a branch of Standard Chartered Bank, headquartered in London. SCB-UK incurred various operational and administrative expenses for its global operations, which were proportionately allocated to all its branches, including SCB-India, based on revenue, employee headcount, and profitability.
A two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) observed that the mere allocation of expenses, without a contractual obligation, service agreement, or direct payment, did not establish a service provider-service recipient relationship. The tribunal observed that the reverse charge mechanism applies only when services are explicitly provided, and consideration is exchanged.
The tribunal also held that "Business Support Services" did not include "operational or administrative assistance" before May 1, 2011, making any tax demand for the prior period legally unsustainable. The revenue’s appeal was dismissed, and SCB-India was granted relief from service tax liability on the allocated expenses.
CESTAT holds Hindustan Unilever Ltd eligible to avail 75% of abatement on freight paid to GTA
M/s. Hindustan Unilever Limited vs Commissioner of Service Tax 2025 TAXSCAN (CESTAT) 283
M/s. Hindustan Unilever Limited, the appellant is in appeal against the impugned order wherein the demand of Service Tax has been confirmed by denying the benefit of abatement provided under Notification No. 32/2004-S.T. dated 03.12.2004.
The short issue involved in the matter is as to whether 75% abatement of freight paid to GTA under Notification No.32/2004-S.T. dated 03.12.2004 is available only to the GTA or to the appellant which has discharged the Service Tax under reverse charge mechanism under Rule 2(1)(d)(v) of the Service Tax Rules, 1994.
A two member bench of Shri Ashok Jindal, Member (Judicial) and Shri K. Anpazhakan, Member (Technical) held that the appellant is entitled to 75% of abatement on freight paid to GTA under Notification No. 32/2004-S.T. dated 03.12.2004. The Tribunal further observed that the appellant had availed the abatement during the period from February 2005 to February 2006 while the Show Cause Notice was issued on 30.03.2010, which is beyond the normal period of limitation. There is also no evidence on record to indicate suppression of facts on the part of the appellant. In these circumstances, the whole of the demand is barred by limitation. Thus, on the ground of limitation also, the impugned demand is not sustainable.
CESTAT Allows Cenvat Credit Refund to Mercedes Benz Research and Development India (P) Ltd
The Commissioner of Central Excise vs M/s. Mercedes BenzResearch and Development India (P) Ltd. 2025 TAXSCAN (CESTAT) 284
An appeal was filed before the Commissioner (A) and the Commissioner (A) modified the Order-in-Original and directed the lower authority to reexamine the rejected eligible input services on production of Chartered Accountant certificate. Aggrieved by the said order of the learned Commissioner (A) remanding the matter to lower authority, the Revenue had filed an appeal No.ST/322/2011 before this Tribunal on the limited ground that Commissioner (A) has no power to remand the matter to the original authority.
As regards the claim made by the assessee regarding ‘Technical Consultancy Service’, the CA drew out attention to the reply dated 10.03.2010 submitted by the assessee wherein it is specifically stated that assessee used to hire experienced professionals in IT field depending upon the situation and payment to such persons form bulk to appellants professional consultancy costs and they have carried out this service only to fulfil the requirement of output service, therefore, the assessee had rightly claimed the cenvat credit on such services.
A two member bench of P. A. Augustian, Member (Judicial) and R. Bhagya Devi, Member (Technical) observed that these services including the ‘Technical Consultancy Service’ and ‘Manpower Recruitment and Supply Agency Services’ are having direct nexus with the output services and sanctioned refund of cenvat credit. Further, the assessee is a 100% Export Oriented Unit (EOU) and the inputs used for such services are having direct nexus with the output service.
Win for Air India: CESTAT Rules CBIC Circular on IGST for Repaired Goods Re-Imports based on GST Council Minutes Unsustainable
M/s. Air India Ltd. vs Commissioner of Customs 2025 TAXSCAN (CESTAT) 285
The amendment in July 2021 introduced IGST and Compensation Cess liability on such imports. The Commissioner of Customs (Appeals) upheld the tax demand, relying on the CBIC circular and GST Council’s recommendations.
The appellant’s counsel argued that the amendment was not clarificatory but substantive, as it introduced a new tax liability that was not previously applicable. The appellant’s counsel argued that under Section 25(4) of the Customs Act, 1962, exemption notifications are presumed to be prospective unless expressly stated otherwise. Notification No. 36/2021-Customs did not provide for retrospective effect so it could not be applied to transactions before its issuance.
The tribunal observed that its previous ruling in InterGlobe Aviation Ltd. (2020) was binding and had correctly interpreted the exemption notification and the CBIC Circular based on the GST Council Minutes could not override the legal provisions of the Customs Act. The appeal was allowed.
Relief to Appolo Tyres: CESTAT Restores Rs. 28.1 Lakh Service Tax Refund Claim due to GST Transition Hurdles
Apollo Tyres Ltd vs Commissioner of Central Tax Pune - I 2025 TAXSCAN (CESTAT) 286
The original authority had rejected the refund claim, noting that Section 11B of the Central Excise Act, 1944, which deals with the refund of taxes collected without the authority of law, did not provide for the monetization of credit.
The Tribunal noted that the claim for refund was not based on the incorrectness of the tax liability but on the inability to transition the credit into the new GST regime due to the belated payment of tax. The Tribunal also referred to several precedents, including the Larger Bench decision in Bosch Electrical Drive India Private Ltd. v. Commissioner of Central Tax, Chennai, which affirmed the maintainability of such appeals. Additionally, the Tribunal cited the Bombay High Court's decision in Combitic Global Caplet Pvt Ltd. v. Union of India, in which the court held that Section 142(3) of the GST Act mandates the refund of any amount paid under the existing law, including CENVAT credit.
The CESTAT, comprising C.J. Mathew (technical member), set aside the impugned order and restored the refund application for fresh consideration.
CESTAT quashes Rs. 35.68 Lakh CENVAT Credit Recovery against Hindustan Coca-Cola Beverages Pvt Ltd
Hindustan Coca-Cola Beverages Pvt Ltd vs Commissioner of CGST& Customs 2025 TAXSCAN (CESTAT) 287
The assessee, HCCBPL, registered as an 'input service distributor (ISD)', had distributed the disputed credit to its various units, including the appellant unit in Goa, under Rule 7 of the CENVAT Credit Rules, 2004. The company contended that it had merely topped up its accumulated credit from the pool of the ISD and utilized it to discharge central excise duties on goods manufactured by them.
HCCBPL contended that any incorrectness in the availment of credit could not be attributed to them, as they had not taken the credit themselves but had received it from the ISD. They further argued that the challenge was primarily linked to the nexus between the service procured and the activity undertaken by them, which was beyond the scope of Rule 7 of the CENVAT Credit Rules, 2004.
The CESTAT observed that “the impugned order confirms the recovery of credit taken and distributed under Rule 7 of the CENVAT Credit Rules, 2004, by the input service distributor (ISD). However, the appellant merely utilised the credit, and since there’s no violation of Rule 3(4), they shouldn’t be held accountable for its source. The obligation under Rule 3(1) applies to the ISD, not the recipient.”
Bank Guarantee Charges for Raw Material Procurement Covered Under Input Service u/r 2(l): CESTAT allows Bajaj's CENVAT Claim
Bajaj Auto Limited vs Commissioner of CGST & Central Excise 2025 TAXSCAN (CESTAT) 288
During the course of audit proceedings, the departmental authorities found that the appellants wrongly availed CENVAT credit on 'Bank Guarantee Commission' for VAT refunds during 2016-2017 and 2017-2018 (up to June 2017), deeming it ineligible under Rule 2(l) of the CENVAT Credit Rules, 2004.
The tribunal noted that bank charges for guarantees are linked to raw material purchases for manufacturing. This qualifies as an "input service" under Rule 2(l) as the definition includes services related to procurement, financing, and other business needs.
The bench noted that all ‘the services that have a relation with raw materials have been used, either directly or indirectly, in the manufacture of final products, and only upon such final products having been exported, the VAT setoff was given, and therefore the bank commission/charges for obtaining bank guarantee is with respect to such usage of raw materials in the final products and not per se directly relating to its exports.’
No Service Tax on Freight & Cartage Expenses under GTA Services: CESTAT
Commissioner of Service Tax vs M/s. Globe Civil Projects Pvt.Ltd. 2025 TAXSCAN (CESTAT) 289
The two member bench of Rachna Gupta (Judicial) and Hemambika R. Priya (Technical) has stated that the said amount/expenses/charges were not paid by the assessee directly to the transporter for transportation of any goods. Thus, the said activity cannot be covered under GTA Services, hence, no service tax liability can be levied on the aforesaid amount/expenses/charges under GTA services.
Before the Tribunal, the appellant/department has contested the Adjudicating Authority's ruling. Due to the unsustainable demand for service tax under three distinct service categories for a single operation, the assessee argued that the SCN is ambiguous. The assessee further argued that the construction services rendered to IIM, DDA, and CEAI were not for commercial purposes and, as a result, could not be categorized under the headings of Works Contract Service, Commercial or Industrial Construction Service, or Construction of Complex Service.
While dismissing the appeal, the bench upheld the order under challenge.
2025 TAXSCAN (CESTAT) 290
Relief to Toyota: CESTAT Sets aside Order Rejecting Refund of excess CENVAT credit being Contrary to S. 142(3) of CGST Act
Toyota Kirloskar Motor Private Limited vs Pr. Commissioner ofCentral Tax
2025 TAXSCAN (CESTAT) 291
In a ruling in favour of Toyota Kirloskar Motor Private Limited, the Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the order rejecting the refund of excess cenvat credit being contrary to section 142 (3) of the Central Goods and Service Tax (CGST), Act, 2017.
M/s Toyota Kirloskar Motor Private Limited, the appellants herein, inter alia, are engaged in the manufacturing of motor vehicle parts and were registered under Central Excise authorities, they also have a spare parts depot in Pune. The appellants avail CENVAT credit of duty/tax on inputs and input services used in manufacture of final products.
That the provisions of Section 142of the CGST Act, is a transitional arrangement wherein it has been specifically provided that such provisions apply as a non-obstanate clause whereby such provisions will have overriding effect, if anything to the contrary is contained under the provisions of existing law i.e., Central Excise Act, 1944, except for the provisions of sub-section (2) of section 11B ibid. Thus, all the conditions of the requirements of Section 11B ibid as it remained under the existing law, other than those relating to Unjust Enrichment clause contained in Section 11B(2) ibid would apply, only if they are not contradictory to the provisions of Section 142 of the CGST Act, 2017, in dealing with refund of ‘CENVAT credit’.
Relief for South Eastern Coalfields: CESTAT Rules Silo Loading Charges Part of Coal Price, not Subject to Service Tax
South Eastern Coalfields Limited vs Pr. Commissioner, CGST,Customs & Respondent Central Excise 2025 TAXSCAN (CESTAT) 292
South Eastern Coalfields Limited (SECL), the appellant, is a public sector undertaking engaged in coal mining and sales. The company operates multiple mining areas in Chhattisgarh and Madhya Pradesh and sells coal at Pithead Price, as notified by Coal India Ltd. SECL collected Silo Loading Charges at a rate of Rs. 18-20 per ton for automated coal loading onto railway wagons.
The appellant’s counsel argued that Silo Loading Charges were part of the coal price and not a distinct service. Further, they argued that it had already paid VAT on these charges, making the imposition of service tax a case of double taxation, which is impermissible as per the Supreme Court’s ruling in Bharat Sanchar Nigam Ltd. v. UOI (2006).
The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that the appellant’s case was covered by previous CESTAT decisions, including its own ruling in the appellant’s favor in 2018. The tribunal explained that service tax and VAT cannot be imposed on the same transaction and that Silo Loading Charges were part of the overall coal price. The tribunal set aside the demand for service tax, interest, and penalties imposed by the Department.
CESTAT Directs Re-Adjudication of Customs Matter after Authority Fails to Furnish Test Reports
M/s. Shyam Sel & Power Limited vs Commissioner of Customs(Preventive) 2025 TAXSCAN (CESTAT) 293
The case pertained to the classification and valuation of imported manganese ore, where the customs department relied on test reports to reassess the duty liability. The Assistant Commissioner of Customs (Preventive), Bhubaneswar Commissionerate, had finalized the assessment, leading to an increased demand for duty. The appellants challenged this assessment, arguing that they were never provided with copies of the test reports or given an opportunity to contest the findings before the assessment was concluded.
The Commissioner of Customs (Appeals) had earlier accepted that the test reports were not furnished to the appellants. However, instead of setting aside the assessment, the Commissioner upheld the duty demand. Dissatisfied with this decision, the appellants escalated the matter to CESTAT.
Considering these factors, the tribunal set aside the Commissioner (Appeals)’s order and directed the Assistant Commissioner of Customs to provide copies of the test reports to the appellants and re-adjudicate the case. The tribunal emphasized that fresh adjudication should be conducted in accordance with the law and after granting the appellants a proper opportunity to present their case.
Relief to LG Electronics: CESTAT Allows CENVAT Credit on Call Centre Services for After-Sales Support
M/s L G Electronics India Pvt. Ltd vs Commissioner, CentralExcise, Noida-II 2025 TAXSCAN (CESTAT) 294
The Allahabad Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT), has held that LG Electronics India Pvt. Ltd. is entitled to avail CENVAT credit on service tax paid for call centre services utilized for after-sales support. The Tribunal found that such services directly contribute to the brand image and sales promotion of the company’s manufactured goods, thereby qualifying as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004.
The appellant, LG Electronics India Pvt. Ltd.is engaged in the manufacture and clearance of consumer electronics such as air conditioners, televisions, refrigerators, and washing machines. The company also provides repair and maintenance services through Authorized Service Centres (ASCs) and Direct Service Centres (DSCs) for products covered under warranty and beyond.
The Tribunal relied on several judicial precedents, such as CCE, Nagpur v. Ultratech Cement Ltd. (2010) where it was held that any service that contributes to the final value of a product is eligible for CENVAT credit. Similarly in the case of Coca-Cola India Pvt. Ltd. v. Commissioner (2009) the court had recognized that services used in brand building and customer engagement qualify as input services.
Establishment of Fake or Fabricated Invoice Not necessary to reject Transaction value u/r 12 of Customs Valuation Rules: CESTAT
M/s Mittal Appliances Limited vs The Commissioner of Customs 2025 TAXSCAN (CESTAT) 295
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has stated that the transaction value is not the only basis for assessment of the duty. It is sufficient if the proper officer has reasonable doubt for the transaction value to be rejected under Valuation Rule 12.
In accordance with Rule 12 of the Customs Valuation Rules, 2007, the Deputy Commissioner denied the declared value. The assessee, who was upset with the Deputy Commissioner, appealed to the Commissioner (Appeals), who dismissed the appeal and maintained the Deputy Commissioner's decision. Before the Tribunal, the assessee has contested the Commissioner's (Appeals) ruling.
While dismissing the appeal, the bench ruled that rejecting the transaction value does not need proof that the invoice was fraudulent or falsified. Furthermore, it is not required to prove a family connection between the buyer and seller. It is sufficient if the proper officer has reasonable doubt for the transaction value to be rejected under Valuation Rule 12.
Data from NIDB cannot be Basis for Enhancement of Value under Customs Act: CESTAT
M/s Seafox Impex vs The Commissioner of Customs (Appeals) NewDelhi 2025 TAXSCAN (CESTAT) 296
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that data from the National Import Database (NIDB) cannot be the basis for enhancement of value under the Customs Act, 1962. The judicial member Rachna Gupta's single bench has ruled that the department still has the responsibility of proving the aforementioned claims. In the event that the burden is not met, the appellant's statement or payment of the differential duty will not be enough to waive the need to challenge the reassessment.
The government argued that following careful verification, the appropriate officer/assessing officer in the current appeals had reached the decision for value improvement. Following the aforementioned value boost, the appellant willingly paid the difference in duty. The aforementioned action by the appellant implies that the appellant has accepted the reassessment and enhancement. Consequently, the appropriate officer was not supposed to issue a speaking order in accordance with Section 17(5) of the Customs Act.
While granting the appeal, the tribunal ruled that the confirmation of differential duty violated both Rule 12 of the Customs Valuation Rules and Section 17(4) of the Customs Act, and as a result, it could be revoked.
Relief to Indian Oil Corporation: CESTAT Sets aside Order rejecting Customs Duty Refund Citing Limitation
Indian Oil Corporation Limited vs Commissioner ofCustoms-Jamnagar 2025 TAXSCAN (CESTAT) 297
In a ruling in favour of Indian Oil Corporation, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the order which rejected the refund of customs duty citing the bar of limitation.
Indian Oil Corporation Limited, the appellant imported Crude Petroleum Oil and filed into Bond B/E for warehousing under Section 46 of the Act and said B/E was assessed provisionally. Subsequently, they filed Ex-Bond B/E for home consumption under Section 68 of the said Act for clearance of warehoused goods, which was also assessed provisionally. Later on at the time of final assessment, demurrage charges came to be included in the assessable value, which was agitated by the said appellants. Eventually, the appeal was allowed in this regard. Feeling aggrieved from the said decision the department preferred an appeal before Tribunal and the same was rejected by the CESTAT vide order dated 13.10.2015.
A single bench of Dr. Ajaya Krishna Vishvesha, Member ( Judicial) viewed that when the Chartered Accountant has given a certificate after verification of accounts and corroborative evidences that the duty incidence has not been passed on to the customers then this certificate should not be brushed aside without any cogent reason and the lower Adjudicating Authority and the Commissioner (Appeals) has brushed aside the Chartered Accountant certificate without any cogent reason. The tribunal set aside the order and allowed the appeal.
No Stranger to Contracts, Including Customs Officer Cannot Modify FOB Value of Goods: CESTAT
M/S JBN APPARELS PVT LTD vs COMMISSIONER OF CUSTOMS-NEW 2025 TAXSCAN (CESTAT) 298
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has stated that no stranger to the contract, including any Customs officer has any right to interfere with the Free on Board ( FOB ) value of the goods.
The contested order was issued by the Commissioner (Appeals), who accepted the valuation for each shipping bill and released the bonds and bank guarantees related to the redemption penalty and fine. Nevertheless, he remanded the case to the Joint Commissioner, ordering that the permissible export profits in the eight shipping invoices be recalculated in light of the investigation and the evidence that the exporters had available. Before the Tribunal, the assessee has contested the Commissioner's (Appeals) ruling.
The bench allowed the appeal, ruling that the entire investigation, the SCN that followed, and the adjudication proceedings gave the false impression that the Customs officers had the authority to change the FOB value or that the drawback, MEIS, and ROSL, which must be paid as a percentage of FOB according to the drawback schedule and the FTP, could instead be paid on a different value that the officers decided.
Customs Broker not Responsible for Relocation of Client to New Premises after Completion of Address Verification: CESTAT
M/S AKANKSHA GLOBAL LOGISTICS PVT LTD vs COMMISSIONER,CUSTOMS-NEW DELHI 2025 TAXSCAN (CESTAT) 299
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that once address verification is finished, the customs broker is not liable if the client relocates.
According to the bench, the Customs Broker's responsibility cannot include confirming that the officers properly issued the certificate or registration. Naturally, nothing stops the customs broker from bringing these data to the attention of customs authorities for their evaluation and appropriate action if it learns that its customer received these credentials through deception or fraud. However, as long as the certificate or registration granted by a government official is legal, the customs broker cannot sit in judgment over it.
While allowing the appeal, the tribunal held that the impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporter was found to not exist during subsequent verification by the officers, added the bench.
Relief for NRAI: CESTAT finds No 'Actual User' Condition in Exemption Notification, Permits Sale of Imported Arms
M/s National Rifle Association of India vs Commissioner ofCustoms 2025 TAXSCAN (CESTAT) 300
National Rifle Associationof India (NRAI), the appellant, a national sports federation, imported arms and ammunition between November 2005 and December 2009 under an exemption granted for use in national and international championships.
The two-member bench, comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member)observed that the exemption notification did not mandate that the importer itself must use the arms but only required their use in approved championships. The tribunal found that there was no 'Actual User' condition and that NRAI's supply to affiliated associations did not violate the exemption.
The tribunal further determined that confiscation under Sections 111(d) and 111(o) was unjustified, as the import was lawful and the goods were used as intended. The tribunal quashed Rs. 3.45 crore customs duty demand and penalty.
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