The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that following the Supreme Court's ruling in Intercontinental Consultants, reimbursed expenses could not be included in the value of taxable services.

The two member bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that since the respondent-assessee is a person, it cannot be held against her if she believed she was merely a dealer; she has the option to choose between the purchase price and the sale price, or MRP, therefore it is impossible that there was a plan to avoid paying service tax. Only because Amway referred to such a sum as "commission" and the appellant merely sold the items to the customer who requested a product at a specific MRP did the problem arise. The appellant is penalized and the demand for the longer period is revoked.

Springfield Shelters Pvt. Ltd., the appellant, is a company engaged in providing construction services. The appellant was registered under “Construction of Residential Complex Services” (CRCS) but filed returns under “Works Contract Service” (WCS) for the periods January 2010 to March 2010, April 2010 to March 2011, and April 2011 to June 2012.

The two-member bench comprising P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) observed that, as per the Supreme Court ruling in Larsen & Toubro Ltd., no service tax was leviable on construction activities carried out under composite works contracts prior to July 1, 2010.

The tribunal observed that the appellant’s projects were composite contracts and that they had duly remitted tax under WCS post-1.7.2010, where applicable. The tribunal explained that for the periods under dispute before July 2010, no service tax liability could arise under CRCS or WCS.

The two-member bench comprising P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) held that the family relationship and consistent undervaluation established mutuality of interest. The tribunal observed that the concept of lifting the corporate veil was applicable in family-controlled businesses where the formal corporate structure was being used to mask related transactions.

The tribunal ruled that lifting the corporate veil was justified, and valuation under Rule 9 was correctly applied. Since no penalty was confirmed by the Commissioner (Appeals) and no cross-appeal was filed, no penalty was imposed. The appeal was dismissed on the merits, granting no further relief to the appellant.

Sri Venkateswara Sago Products and several other sago and starch manufacturers, the appellants, challenged orders passed by the Commissioner of Central Excise (Appeals). The appeals were dismissed at the first appellate stage for non-compliance with the mandatory pre-deposit requirement under the Central Excise Act.

The tribunal pointed out that the proper course was to verify the appellants’ payment claims before proceeding to decide the appeals. It directed the first appellate authority to call for a report from the adjudicating authority regarding the alleged excise duty payments. The tribunal ordered a fresh de novo adjudication after verification, setting aside the earlier dismissal orders.

Sannam S-4 Management Services India Pvt. Ltd, the appellant/assessee is in the business of providing a range of consultancy services including exploring development opportunities in Indian market to international educational organizations. For carrying out this activity, the appellant has entered into an agreement with various universities all over the world, whereby the appellant agrees to enlighten the prospective students in India with the opportunities abroad.

The two-member bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that at least three parties and two separate supplies—the primary supply and the auxiliary supply should be involved in the provision of intermediate services. The fact that an individual who supplies the primary supply to another individual on a principal-to-principal basis cannot be regarded as a provider of an intermediary service was also made clear.

The two-member bench comprising Judicial Member S. S. Garg and Technical Member P. Anjani Kumar observed that refund adjudications made under Section 11B are final unless set aside through appellate processes under Section 35E. The tribunal held that the department could not seek to recover the refund on the basis of a change of opinion without first invalidating the original refund order through an appeal.

The two-member bench comprising Judicial Member Dr. D.M. Misra and Technical Member R. Bhagya Devi observed that the replacement goods had been supplied free of charge and the discount structure was part of a consistent commercial arrangement with Cisco, previously accepted by the department.

The tribunal further held that the confiscation, fine, and penalty were not sustainable, as the import was clearly a replacement, not a case of undervaluation or misdeclaration. The tribunal criticized the customs department for auctioning the goods while the appeal was still pending, without issuing fresh notice or obtaining permission from the appellate forum. The tribunal set aside the impugned order and directed the customs department to restore the full sale value of the auctioned goods to the appellant. The appeal was allowed.

The tribunal also ruled that there was no “service” rendered by the appellant to the mutual fund, which meant the activity could not be taxed or even treated as exempted service. The tribunal observed that the explanations added to Rule 6 and Rule 2(e) of the CCR in 2016, which attempted to expand the definition of exempted service to cover non-service activities, could not be applied retrospectively.

In a recent decision made by the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), it was held that imported wind turbine towers are to be classified as integral parts of wind-operated electricity generators (WOEG) under Customs Tariff Heading (CTH) 8503 and not as civil structures under CTH 7308.

The tribunal referred to Section Note 2(b) of Section XVI of the Customs Tariff Act, 1975, observing that parts solely or principally used with specific machines must be classified alongside those machines. The bench also placed reliance on Circular No. 1008/15/2015, which in turn referred to the Supreme Court’s decision in CCE Nagpur v. Hyundai Unitech Electrical Transmission Ltd. (2015), where towers were recognized as parts of electrical systems.

The tribunal pointed out that the classification cannot be decided based merely on structural appearance but must consider functional use. Since the towers were inseparable from the operation of wind power generators, they had to be treated as parts under CTH 8503.

Emami Agrotech Limited, a company engaged in the import, processing, and sale of edible oils, imported two consignments of crude palm oil from Singapore in November 2017. The consignments, arriving via vessels MT Express and MT Nan Lian 006, were subject to a BCD of 15% as per Notification No. 50/2017-Customs, amended by Notification No. 71/2017-Customs.

The CESTAT bench, comprising Shri Ashok Jindal (Judicial Member) and Shri K. Anpazhakan (Technical Member), meticulously analyzed the case. It observed that under Section 15(1)(a) of the Customs Act, the duty rate for goods entered for home consumption is determined by the date of filing the Bills of Entry.

The tribunal observed that the contract remained valid and enforceable, and that the appellant was not given a fair opportunity to rebut the Department’s assumption that the contractual terms had lapsed. It also observed that the Commissioner (Appeals) failed to consider the core arguments and misapplied factual findings.

The tribunal set aside the impugned appellate order and remanded the matter back to the Commissioner (Appeals) for fresh adjudication. The tribunal directed that the appeal be reconsidered based on the original grounds of challenge, and after giving the appellant a proper hearing. The appeal was allowed by way of remand.

The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) found that the Department had relied merely on entries from the profit and loss account without linking them to any specific invoice or service provided. The tribunal explained that taxability must be established based on evidence of actual service rendered and not inferred from book entries.

Cargo Yatri Private Ltd., the appellant, held a customs broker licence issued under CBLR, 2018. The dispute arose when customs authorities intercepted a consignment of black pepper and cigarettes misdeclared as perlite ores, imported under a bill of entry dated 4 March 2023.

The two-member bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) examined the structure of the CBLR and explained that customs brokers are entrusted with sensitive access to the customs system. The tribunal found that the appellant failed to perform the basic verification required under Regulation 10(n). The tribunal also observed that the breaches under Regulations 10(d) and 10(e) were not proven and that there was no evidence of misconduct or deliberate concealment.

U.B. Stainless Ltd., the appellant, is engaged in the manufacture of stainless steel welded tubes and pipes. The dispute arose when the department disallowed CENVAT credit of Rs. 6,02,379 availed on service tax paid for GTA services used in the outward transportation of goods from the factory to the customer’s premises for the period April 2017 to June 2017.

The single-member bench led by Judicial Member Ajay Sharma reviewed the contractual documents, including purchase orders that referred to “freight paid by supplier” or “freight inclusive,” and invoices where no separate freight component was charged.

The tribunal observed that the ownership and risk of the goods remained with the appellant during transit, and the transfer occurred only upon delivery at the customer’s premises. Relying on precedents such as Emco Ltd. and Roofit Industries Ltd., and the interpretation adopted by the Karnataka High Court in Bharat Fritz Werner, the tribunal held that in FOR destination sales, the customer’s premises can be treated as the place of removal.

The Bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that Middlings could not be treated as Washed Coal, as the process of coal washing yields three distinct products, all with separate uses and market values.

In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) of Delhi bench has held that rejection of the transaction value of paper cup machines based solely on previous which was set aside by the tribunal cannot be upheld. It stated that there is no apparent reason for rejection of the value.

The tribunal stated that under Section 14 of the Customs Act, 1962, the assessable value is primarily the transaction value unless exceptions apply. As per the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, particularly Rule 12, the proper officer can reject declared values only after establishing reasonable doubt, seeking additional information, and, if unsatisfied, following a sequential re-determination under Rules 4 to 9.

In this case, the bench of Binu Tamta (judicial member) and P.V. Subba Rao (accountant member) noted that neither the Deputy Commissioner nor the Commissioner (Appeals) provided such analysis or followed the prescribed procedure. Instead, they merely adopted the findings of an earlier order that had already been set aside, rendering their decisions unsustainable.

The appellate tribunal found that the phrase "relating to" used in the notifications had a broad scope and included various services that were integral to transmission and distribution of electricity, such as the erection of transmission lines. Thus, the services provided by the appellants were deemed exempt from service tax under the relevant notifications.

The two member bench comprising Somesh Arora(Judicial Member) and P.Anjani Kumar(Technical Member) referred to past decisions, including those involving Kedar Construction and Noida Power Company Ltd., where similar claims were upheld, confirming that services directly linked to transmission and distribution of electricity are eligible for the exemption.

The case arose when Deluxe Industrial Services was issued a show cause notice by the CGST and Central Excise Department alleging short payment of service tax amounting to Rs. 1,04,09,610 for the period April 2015 to March 2017. The demand was based solely on discrepancies found between figures declared in the company’s ITR and those declared in its ST-3 service tax returns. The department imposed penalties under Section 78 of the Finance Act, 1994, alleging suppression of facts.

The single-member bench comprising M.M. Parthiban (Technical Member) held that the case lacked the key elements required to invoke Section 78, namely fraud, willful misstatement, or suppression of facts. The tribunal observed that the appellant had made all necessary disclosures and that the tax was paid voluntarily along with interest

The tribunal also observed that both adjudicating authorities had substantially reduced the demand during proceedings and accepted most of the explanations and documentary evidence submitted. The tribunal explained the CBIC’s guidance that show cause notices must be issued only after a proper verification of facts and that adjudication must be judicious when SCNs are already issued without such verification.

Varad Vinayak Gardens, a proprietorship concern, had entered into contracts with MCGM for developing, maintaining, and securing public gardens and traffic islands. The Service Tax Department raised a demand of Rs. 3.6 crore on total receipts of approximately Rs. 33.96 crore for the period from 2010–11 to 2012–13, treating the entire consideration as taxable under “management, maintenance or repair service” before July 2012 and as a “bundled service” post-July 2012.

The tribunal found that the use of composite or bundled service classification under Sections 65A and 66F was unjustified, as the department did not show the impossibility of disaggregating services or any special rate applicability and that government contracts with municipal bodies like MCGM, particularly for non-commercial services, are often exempt or excluded by law and should not be broadly classified as taxable services without specific legal basis.

The appellant, Laurel Wires Ltd, had initially made the pre-deposit following a CESTAT directive in 2011. After the tribunal’s final order in 2018, the company sought a refund, which was sanctioned but without the interest mandated under Section 35FF of the Central Excise Act, as it stood before 2014. Aggrieved by the above action, the appellant filed an appeal via email with the Commissioner (Appeals) in Nagpur, adhering to the Information Technology Act’s provisions for electronic submissions.

The CESTAT noted that the appellant may have filed the appeal in the wrong forum due to a jurisdiction issue, but it was submitted on time at Nagpur as instructed and that if the Commissioner (Appeals) at Nagpur lacked jurisdiction, he should have either transferred it to the correct forum or returned it with proper directions. The bench observed that the time the appeal remained with the Nagpur office should be excluded when calculating the limitation period.

The Judicial Member, Dr Suvendu Kumar Pati, allowed the assessee’s appeal, set aside the impugned order, and directed payment of interest on the Rs. 20 lakh refund within two months, as per pre-2014 laws.

CESTAT observed that the adjudicating authority failed to examine the terms of employment or the statutory framework governing the directors’ roles. The Tribunal noted that the tax liability could not be determined without scrutinising the employment contracts.

It further noted that “the tax liability in the present instance could not have been determined unless with, and except by, reference to the contract of employment. In the absence of such enquiry, and further finding thereof in the impugned order, the determination that the claim under the Voluntary Compliance Encouragement Scheme (VCES), 2013, is false, and, thereby, warranting discard is not tenable.”

CESTAT allows 12% Interest on Delayed Refund of Service Tax Paid by Mistake

The appellant/assessee, Gajendra Singh Sankhla, had requested a refund of service tax that had been inadvertently paid on the building of independent or individual homes. Both lower authorities rejected the refunds, but the Tribunal granted them on the grounds of unfair enrichment, limitation, and merit after concluding that the construction was exempt from 01.07.2012 under Notification No. 25/2012-ST dated 20.06.2012 and was not taxable before that date.

According to the judicial member Ashok Jindal, the appellant/assessee paid service tax in error, which is completely non-refundable and would be considered a revenue deposit rather than service tax paid by the appellant. Consequently, the Central Excise Act's Section 11B clause is not relevant.

The Tribunal held that the appellant is entitled to 12% interest on postponed reimbursements. The department was ordered by the CESTAT to give the appellant 12% interest annually.

Eurotex Industries & Exports Ltd, the appellant is a 100% Export Oriented Unit (EOU), engaged in the manufacture of Cotton Yarn, falling under Chapter sub- heading 5205 11 and Knitted Grey Fabrics, falling under Chapter sub- heading 6002 92 of the Central Excise Tariff Act, 1985. In respect of the cotton yarn and the rejected waste generated during the course of manufacture of the said final product, the appellant had claimed the benefit provided under Notification No. 52/2003-Cus. dated 31.03.2003 for non-payment of duty on clearance of the said product outside the factory premises. However, non-payment of Central Excise Duty was objected to by the department and accordingly, proceedings were initiated for recovery of the Central Excise duty from the appellants.

A two-member bench of S.K. Mohanty, Member (Judicial) and M.M. Parthiban, Member ( Technical) held that the adjudged demands confirmed in the impugned order cannot be sustained and set aside the impugned order while allowing the appeal.

The appellant/assessee, Career Point Limited, offers taxable services such as commercial training, coaching, immovable property rental, works contract services, legal consulting, and manpower recruitment/supply agency services. In order to rent the aforementioned outward services, the appellant claimed credit for service tax paid on a variety of input services. As part of its business strategy, the appellant also subscribed to mutual fund units and invested excess monies in a variety of mutual funds.

The two member bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that there is no requirement that a service be provided by a service provider to a service recipient in exchange for payment when investing in mutual funds. The action would not qualify as "service" under Section 65B(44) of the Finance Act, 1994, in accordance with the guidelines established in numerous rulings.

While granting the appeal, the tribunal ruled that subscription and redemption of liquid mutual fund units do not qualify as "trading of goods" and, as a result, are not exempt services under Section 66D(e) of the Finance Act.

The two member bench comprising Somesh Arora(Judicial Member) and Satendra Vikram Singh(Technical Member) dealt with two main issues. First, it examined whether 4% SAD applied to stock transfers made by the assessee from its 100% EOU to group companies in the DTA without VAT payment. Referring to the Moser Baer India Ltd. case, the Tribunal held that SAD was applicable even if VAT was not paid, as long as the goods were notified under Section 3(5) of the Customs Tariff Act.

The two member bench comprising Ajayan T.V(Judicial Member) and Vasa Seshagiri Rao(Technical Member)referred to Rule 7 of the Service Tax (Determination of Value) Rules, which says the taxable value should be the actual consideration for the service, excluding reimbursed expenses. Since the appellant already paid service tax on the amount to Prof. Washio, the air travel costs were not considered part of the taxable value.

The appellate tribunal also cited previous cases and concluded that reimbursable expenses should not be taxed. Even if the air travel costs were considered part of the service fee, the appellant could claim CENVAT credit, making the matter neutral.

CESTAT held that the licensing authority failed to demonstrate how the appellant had violated Regulation 10(k). The tribunal comprising CJ Mathew (Technical Member) and Ajay Sharma (Judicial Member) set aside the revocation of the licence, forfeiture of the security deposit, and the imposed penalty and allowed the assessee’s appeal.

The two member bench comprising Angad Prasad(Judicial Member) and A.K.Jyotishi(Technical Member) referred to past rulings where penalties were not upheld in similar cases. It found no fraud or intent to evade. It held this was a case of delayed payment and filing, not suppression.

Since the investigation ended in 2016 and the SCN came only in 2018, the tribunal said the extended time limit and penalty were not justified. It set aside the ₹7.16 crore penalty under section 78 .

Challans Lost Due to Storage Issues: CESTAT Finds Service Tax Paid under Wrong Head, Declares No Shortfall [Read Order]

M/s. Bhogjora Enterprise vsCommissioner of Central Excise & Service Tax CITATION : 2025 TAXSCAN (CESTAT) 488

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Bhogjora Enterprise had fully discharged its service tax liability, finding that a portion of the tax had been paid under an incorrect accounting head and that the total payment matched the liability.

Bhogjora Enterprise, the appellant, is engaged in providing various taxable services and was duly registered under the service tax regime. The appellant had been making regular payments of service tax but during an audit, it was unable to produce the relevant challans to substantiate its payments due to their destruction caused by storage issues. Following the audit, the Department issued a show cause notice demanding Rs. 67,30,277. The Commissioner of Central Excise and Service Tax passed an Order-in-Original confirming the demand. Aggrieved by this, the appellant filed an appeal before the Tribunal.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that there was no shortfall in service tax payment and allowed the appeal, setting aside the order of the Commissioner. The tribunal ruled that the appellant would be entitled to consequential reliefs as per law.

It is not acceptable to lose time due to third-party delays. The Limitation Act cannot be used to extend the time restriction for allowing a delay in filing for a refund. Only the provisions of the aforementioned statute permit a reimbursement of money collected or paid as tax under FA 1994. The Tribunal cannot consider any new issue that was submitted as a miscellaneous petition that goes beyond the parameters of the Show Cause Notice and would permit the initiation of an entirely new case.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the department had not conducted any independent study of the factory’s operations, nor had it presented corroborative evidence such as movement of vehicles, buyer statements, or financial trails. Relying on precedents such as Shi Mahavir Ferro Alloys Pvt. Ltd. and Agrasen Sponge Pvt. Ltd., the tribunal explained that input-output ratios, by themselves, cannot justify a duty demand without supporting evidence.

The tribunal further ruled that the extended limitation period was not justified, as there was no suppression of facts or misstatement by the appellant. Since all relevant data had been available to the department well before the show cause notice was issued, the delay was held to be fatal to the proceedings.

The tribunal held that the alleged mis-declaration of weight and value was not supported by credible or professional evidence. The re-assessment of value based on unrelated imports and flawed weighment processes lacked legal validity. The use of statements, uncorroborated by documentary evidence, was found insufficient to sustain the serious allegations made.

Dabur India Limited, the appellant, had imported ‘Lemoneez’, a lemon-based concentrate from Nepal, and initially classified the product under Tariff Item 2202 99 20, which also attracted 12% IGST. Later, the department issued a show cause notice alleging that the product was misclassified and ought to be classified as a soft drink concentrate under Heading 2106 90 19, attracting 18% IGST.

The two-member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) held that the classification of ‘Lemoneez’ must be based on its composition and manufacturing process, not on its end use. The tribunal found that the product met the standards for reconstituted juice under the Harmonized System Explanatory Notes and retained the essential characteristics of natural lemon juice.

The tribunal held that the Commissioner had selectively read the explanatory notes and misapplied the legal criteria. The tribunal further ruled that mere misclassification, in the absence of any misdescription or concealment, does not constitute suppression or wilful misstatement.

Relief for Nokia India: CESTAT allows Refund of Excess CVD, Rules Challenge to Original Assessment Not Mandatory

Nokia India Sales Pvt. Ltd., the appellant, imported mobile phones and paid CVD at a higher rate during various periods in 2014 and 2015, without claiming the benefit of Notification No. 12/2012-CE. Following the Supreme Court’s decision in SRF Ltd. v. CC, which clarified eligibility for concessional duty under the notification, Nokia filed refund claims for the excess duty paid.

The two-member bench comprising Dr. D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) observed that the issue of maintainability could not be reopened since it had attained finality. The tribunal accepted the Chartered Accountant’s certificate as valid proof that the duty was not passed on to customers. The tribunal also agreed that the refund claim was not time-barred, as the relevant date should be computed excluding the date of payment.

The two member bench of Ashok Jindal (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that allegations of clandestine removal by the appellants cannot be supported by statements recorded during the investigation that were later retracted by the appellants. According to the tribunal, the appellant cannot be found guilty of clandestine removal. As a result, it is unsustainable to demand a duty and impose penalties on the appellants.

M/s VCI Hospitality Ltd., the appellant/assessee, was registered with the Service Tax Department. The company signed a contract with World Resort Ltd. (WRL), Bangalore, to conduct promotional activities for the marketing and sales of Golden Palm Hotel & Spa. These activities include placing ads in magazines, television channels, and daily newspapers, putting up hoardings, hiring a telephone company, and educating the public about the hotel's facilities and amenities, among other things.

The two-member bench of Hemambika R. Priya (technical member) and Binu Tamta (judicial member) has noted that the promotional activities for the marketing and sales of Golden Palm Hotel & Spa, which included placing hoardings, contracting and reaching people over the phone, informing the public of the hotel's amenities, and inserting advertisements in daily newspapers, magazines, and television channels, are not covered by Section 66D of the Finance Act or any exemption notification.

CESTAT allows SAD Refund based on TR-6 Challans to Prove Duty Incidence Borne by Importer
Varian Medical SystemsInternational (India) Appellant Pvt. Ltd. vs Commissioner of Customs

The single bench of Anil G. Shakkarwar (Technical Member) has observed that only contention on the basis of which refund was rejected is that the appellant-importer has not established that the appellant had borne the incidence of customs duty. With the copies of TR-6 challans, it is established that the appellant had borne the burden of SAD. The tribunal overturned the decision and ordered the initial authorities to reimburse Rs. 2,87,801 for SAD.