Annual Customs, Excise and Service Tax Case Digest: CESTAT Rulings 2025 (Part 9)
This article summarises all CESTAT orders published in the Taxscan.in. 'Limitation Not Applicable to Pre-Deposit Refunds': CESTAT Orders 12% Interest from Date of Deposit M/s. Alliance Francaise De Delhivs Commissioner of Central Goods 2025 TAXSCAN (CESTAT) 501 Coming to the facts of the present case, the appellant, M/s. Alliance Francaise De Delhi, is an Indo-French...
This article summarises all CESTAT orders published in the Taxscan.in.
'Limitation Not Applicable to Pre-Deposit Refunds': CESTAT Orders 12% Interest from Date of Deposit
M/s. Alliance Francaise De Delhivs Commissioner of Central Goods 2025 TAXSCAN (CESTAT) 501
Coming to the facts of the present case, the appellant, M/s. Alliance Francaise De Delhi, is an Indo-French cultural centre specialising in French language teaching and cultural events. Show-cause notices were issued in 2009 and 2010, alleging non-payment of service tax under four categories, namely Commercial Trading or Coaching Services, Club or Association Services, Business Support Services, and Renting of Immovable Property Services. The demand was confirmed in an Order-in-Original dated 15.10.2012.
The bench noted that the pre-deposit was made solely to avail the statutory appeal remedy and could not be treated as a duty. The Tribunal ruled that the refund claim was not subject to the one-year limitation under Section 11B of the Act.
Club Building Charges Included in Construction Are Part of Bundled Service and Not Separately Taxable: CESTAT
M/s Shyam Construction vsCommissioner of Customs 2025 TAXSCAN (CESTAT) 502
Shyam Construction, a unit of New Mount Trading & Investment Company Ltd., engaged in the construction of residential complexes, was issued a show cause notice alleging short payment and evasion of service tax under various service categories, including “Club or Association Service.”
The bench, comprising P.K. Choudhary (Judicial Member) and Anil G. Shakkarwar (Technical Member), examined the statutory provisions and found that for a service to qualify as “Club or Association Service,” it must be provided by a club or association to its members in exchange for a subscription or other consideration. The club had not yet come into existence, no services were being provided to any members at the time, and the amount collected was merely part of the construction cost.
CESTAT Rules CENVAT Credit Admissible on Business-Related Services such as Rent-a-Cab, Housekeeping, and Promotion
M/s. L&T Arun ExcelloReality Pvt. Ltd vs Commissioner of GST and Central Excise 2025 TAXSCAN (CESTAT) 503
L & T Arun Excello Reality Private Limited, the appellant, is engaged in the construction of residential complexes and is registered under the Works Contract Service. During an audit, the department alleged that the appellant had wrongly availed of CENVAT credit of Rs. 4,39,857 on various input services, including rent-a-cab, housekeeping, and business promotion. A show cause notice was issued invoking the extended period under the proviso to Section 73(1) of the Finance Act, 1994, and also proposing the imposition of a penalty under Section 78.
The two-member bench comprising Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) held that the cross-objections were indeed maintainable and should have been adjudicated, especially since the appellate authority had invited them. The tribunal observed that there was no evidence in the show cause notice to justify invoking the extended period of limitation.
Once Main Noticee Settles Under SVLDRS, Penalty on Co-Noticees Cannot Survive: CESTAT
Banas Enterprises vsCommissioner of CGST & Central Excise 2025 TAXSCAN (CESTAT) 504
Banas Enterprises, the appellant, was penalised under Rule 26(1) of the Central Excise Rules, 2002, for allegedly purchasing excisable goods (plastic granules) illegally cleared without payment of duty by Narendra Plastics Pvt. Ltd. Following an investigation by the Directorate General of Central Excise Intelligence ( DGCEI ), it was found that Narendra Plastics Pvt. Ltd. had cleared 1309 metric tons of plastic granules without issuing excise invoices and without paying duty.
After hearing both sides, the single-member bench Dr. Ajaya Krishna Vishvesha (Technical Member) observed that the decision in Vipinbhai Kantilal Patel, rendered by a Division Bench, was binding and directly applicable to the facts of the case. The tribunal distinguished the revenue’s reliance on Four R Associates, observing that it was a single-member decision and could not override the binding precedent laid down by a Division Bench.
Statements Recorded during Investigation must Comply with S. 9D of Central Excise Act before Reliance: CESTAT
Abhinav Agrawal vs TheCommissioner, Customs & Central Excise 2025 TAXSCAN (CESTAT) 505
Abhinav Agrawal, Sunil Agrawal, and Krishna Iron Strips & Tubes Pvt. Ltd., the appellants, were issued a show cause notice alleging clandestine manufacture and removal of excisable goods such as MS Ingots, MS Flats, and galvanized pipes. The case arose from a search conducted by the DGCEI at the factory, office, and residence of the directors, during which documents, computers, handwritten ledgers, and Rs. 19 lakh in unaccounted cash were seized.
The two-member bench comprising Justice Ashok Jindal (Judicial Member) and P. Anjani Kumar (Technical Member)found that the allegations of clandestine removal were primarily based on assumptions and unverified documents. The tribunal further explained that the statements relied upon by the department were not validated through Section 9D procedures and could not be treated as admissible evidence.
Service Tax Paid under Mistake of Law: CESTAT Allows Refund with 12% Interest
M/s Meenu Builders vs TheCommissioner of Central Excise, Central Goods & Service Tax 2025 TAXSCAN (CESTAT) 506
Meenu Builders, the appellants/assessee, were building a single house in accordance with a work order from the Rajasthan Housing Board. They paid duty from July 1, 2008, onward, which was exempt under Notification No. 25/2012-ST dated June 20, 2012 (Sl. No. 14B). According to Notification No. 30/2012-ST dated June 20, 2012, the appellant was required to pay 50% service tax under Sl. No. 14B of the aforementioned notification, and the Rajasthan Housing Board was responsible for the remaining 50% through a reverse charge mechanism.
The single bench of Ashok Jindal (Judicial Member) has observed that even though the assessee filed a claim under Form-R, indicating that they had initially treated the payment as a duty but later claimed it was not, the Central Excise Act, 1944's section 11B provision of limitation would not apply for refunds of service tax paid in error on exempted services.
In cases where service tax is paid by mistake, the only questions are whether Section 11B's provisions apply to refunds and whether a 6% or 12% interest rate should be applied. The tribunal concluded that the appellants could request a refund of the money they and the service receiver paid, plus 12% interest.
Clandestine Removal Charges Without Corroboration of Recovered Documents is Invalid: CESTAT
Abhinav Agrawal vs TheCommissioner, Customs & Central Excise 2025 TAXSCAN (CESTAT) 507
Abhinav Agrawal, the appellants/assessee are in appeal against the impugned order confirming the demand of duty on account of clandestine removal of goods along with interest and penalty imposed on all the appellants. A show-cause notice was sent to the appellants for the period of October 28, 2010, to July 6, 2011, alleging that they were involved in the clandestine removal of goods. Based on the statements and documents seized during the investigation, it was alleged that the appellant was involved in the activities of clandestine removal and manufacturing of goods without payment of duty. Therefore, it is proposed to demand the duty along with interest and to impose a penalty on the appellants.
The two member bench of Ashok Jindal (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that it is not possible to rely on documents that were collected during the course of the inquiry to support the charge of clandestine removal of commodities.
Trademark Ownership Must Be Verified via Registrar, Not Unreliable Websites: CESTAT Confirms Exemption Eligibility for Small Service Provider
Shri Satnam Singh Oberoi vsCommissioner of Service Tax 2025 TAXSCAN (CESTAT) 508
Satnam Singh Oberoi and Harvinder Singh Oberoi, the appellants, had provided the renting of immovable property and franchise services to Texla Electrovision, a partnership firm run by their spouses. Each appellant received monthly rent and royalty, and initially availed of the small service provider exemption under Notification No. 6/2005-ST, as amended. After crossing the threshold, they paid service tax on the consideration received.
The tribunal comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) found that the certificates issued by the Registrar of Trademarks conclusively established ownership and overruled the department’s objection based on third-party website data. The tribunal held that the benefit of the exemption notification was wrongly denied and deserved to be restored.
Both appeals were allowed, and the portion of the order denying exemption to the appellants was set aside. The tribunal directed that appropriate consequential relief be granted as per law.
Customs Broker cannot be penalised u/s 114AA of Customs Act for Mere Failure to Physically Verify Importer's Premises: CESTAT
HIM Logistics Private Limited vsCommissioner of Customs 2025 TAXSCAN (CESTAT) 509
The assessee/appellant, HIM Logistics Private Limited, is a customs broker. The assessee is involved in the import and export consignment clearance business. M/s. Jagdamba Enterprises requested the assessee's assistance in order to clear the import shipment. Before the contested consignment, the assessee cleared eleven consignments from M/s Jagdamba Enterprises.
While allowing the appeal, the two member bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has held that the allegations that the appellant did not physically verify the premises of the importer, are not sufficient to fasten the appellant with the penalty. It has not been established that the appellant handled this consignment with any malafide motive. It is essential to establish an intentional or deliberate act or omission and to the act of abetment for imposition of penalty under Section 114AA of the Customs Act.
Cement Cleared in Packaged Form with RSP Qualifies for Concessional Duty under Notification, Irrespective of Buyer: CESTAT
M/s. Jaypee Rewa Plant vsCommissioner of Customs, Central Excise & CGST 2025 TAXSCAN (CESTAT) 510
Jaypee Rewa Plant and Jaypee Bela Plant, both units of Jaiprakash Associates Ltd., were engaged in the manufacture and sale of cement. During the period from January 1, 2008, to February 28, 2011, the appellants cleared cement in 50 kg retail packages to various buyers, including government agencies like the Directorate General of Supplies and Disposals (DGS&D). The appellants paid excise duty under Serial No. 1A of Notification No. 4/2006-CE, which prescribes concessional duty rates for cement cleared in packaged form with an RSP.
The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) observed that the only relevant criteria under Notification No. 4/2006-CE, as amended, were whether the cement was cleared in packaged form and whether it bore an RSP, not the nature of the buyer. The tribunal observed that the Weights and Measures Rules do not prohibit affixing an RSP on goods sold to institutions, and there is no statutory bar to treating such sales differently if the goods are otherwise retail-packaged.
The tribunal also found no evidence of suppression or intent to evade, making the invocation of the extended limitation period and imposition of penalties unsustainable. The tribunal set aside the orders of the adjudicating authority and allowed both appeals. The demand for differential duty, interest, and penalty was quashed.
Mere Mismatch in Gold Content in Dore Bar Imports Not Sufficient to Prove Customs Duty Evasion: CESTAT
Mr. Naresh Vijayvargiya vsPrincipal Commissioner of Customs 2025 TAXSCAN (CESTAT) 511
Naresh Vijayvargiya, the appellant, served as the former Chief Financial Officer (CFO) of MMTC-PAMP India Pvt. Ltd., a company engaged in importing and refining gold dore bars. The customs department issued an order on December 31, 2022, imposing a penalty of Rs. 50 lakhs on Mr. Vijayvargiya under Section 112(a)(ii) of the Customs Act, 1962.
The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that evasion, under Section 112(a)(ii), must involve a deliberate and conscious effort. The final gold content often fluctuated after testing, and the company had voluntarily adjusted duty payments and sought refunds where applicable. The tribunal held that the appellant's actions did not indicate any fraudulent intent or abetment of duty evasion.
The tribunal ruled that a normal variation in gold content in dore bar imports could not be treated as an attempt to evade duty. Consequently, the penalty of Rs. 50 lakhs imposed on Naresh Vijayvargiya was set aside, and the appeal was allowed.
Interest on Delayed Refund Post-Provisional Assessment: CESTAT Orders Payment to HPCL u/s 11BB of CEA
M/s. Hindustan Paper CorporationLimited vs Commr. of CGST & Central Excise, Shillong 2025 TAXSCAN (CESTAT) 512
Hindustan Paper Corporation Limited,appellant-assessee,had cleared goods on a provisional assessment basis. After finalizing the provisional assessments for the period from September 1998 to March 2005, it was found that the assessee had paid Rs. 2,37,28,797/- excess Excise Duty. The assessee then filed a refund claim for this amount, which was rejected by the Order-in-Original (OIO) dated 2nd March 2010.
The two member bench comprising R. Muralidhar (Judicial Member) and Rajeev Tandon(Technical Member) noted that the assessments for 2004, 2005, and 2006 had confirmed excess excise duty of Rs. 2.37 crore was paid. These assessments were not challenged by the department and had attained finality.
The CESTAT set aside the later order and allowed the appeal, holding that the assessee was entitled to interest as directed earlier.
Penalty on Co-Noticee Not Maintainable if Main Noticee Settles Tax Dues Under SVLDRS, 2019: CESTAT
Brijeshkumar Pravin Bhai Patelvs Commissioner of Central Excise 2025 TAXSCAN (CESTAT) 513
Brijeshkumar Pravin Bhai Patel,appellant-assessee,was issued a show cause notice along with M/s. Brij Construction Company for service tax demand. A separate notice was issued to him for penalty. The Joint Commissioner, through order dated 16.02.2017, confirmed the demand, ordered recovery from the company, and imposed a penalty of Rs. one lakh each on the partners, including the assessee.
A single member bench of Dr.Ajaya Krishna Vishvesha(Judicial Member) heard both sides and examined the records. It noted that in similar cases, once the main noticee’s service tax demand was settled under SVLDRS, 2019, the penalty on the co-noticee did not hold. Referring to its earlier decision in M/s. Phenix Construction Technologies, the CESTAT held that the penalty of Rs. one lakh imposed on the assessee under was not sustainable and set it aside.
In short, the appeal is allowed.
Relief for Hindustan Zinc Ltd: CESTAT Rules Structural Steel Used for Chimney Support Qualifies as Capital Goods, Eligible for Credit
M/s. Hindustan Zinc Ltd vs TheCommissioner, Central Excise CGST 2025 TAXSCAN (CESTAT) 514
Hindustan Zinc Ltd., the appellant, is engaged in the manufacture of zinc and lead and had installed a captive power plant within its factory premises. The company availed CENVAT credit on various capital goods, inputs, and steel structures used in the erection of the plant and its associated chimney.
The bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that structural steel used for the chimney’s erection was essential for its functioning, so it constituted accessories or components of capital goods. The tribunal held that credit on these items was admissible under Rule 2(a)(A) of the CENVAT Credit Rules.
The tribunal also held that the matter involved interpretational issues previously decided in favour of the appellant, so, penalty and interest were not justified. The impugned order dated 31 January 2022, passed by the Commissioner, disallowing credit, imposing penalties, and demanding interest, was set aside. All thirteen appeals filed by Hindustan Zinc Ltd. were allowed.
Metal Lease Charges are Part of Transaction Value, Not Post-Import Interest: CESTAT Upholds Inclusion in Customs Valuation
M/s MMTC Pamp India Pvt. Ltd vsPrincipal Commissioner of Customs 2025 TAXSCAN (CESTAT) 515
MMTC Pamp India Pvt. Ltd., a company engaged in refining and minting gold and silver, imported dore bars from various international suppliers under actual user licenses. The company operated under contracts that treated it as a bailee, with ownership of the goods retained by foreign suppliers until final settlement based on assay testing.
The bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) after examining the agreements and the appellant’s communications with the Reserve Bank of India and State Bank of India, found that the metal lease charges were not in the nature of interest but were directly linked to the transaction itself. The tribunal observed that no interest was disclosed to the RBI, but lease charges were acknowledged as a recurring obligation.
Mere Non-Disclosure without Deliberate Evasion Not Enough: CESTAT Quashes Rs. 2 Crore Penalty on Former Managing Director
Mr. Rajesh Khosla vs PrincipalCommissioner of Customs 2025 TAXSCAN (CESTAT) 516
Rajesh Khosla had challenged an order dated December 31, 2022, passed by the Principal Commissioner of Customs (Import), New Delhi, which imposed the penalty on the ground that he had failed to inform customs authorities that the final valuation of imported gold dore bars was based on assay-confirmed quantities determined post-import, and not on the provisional invoices used at the time of import clearance.
The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that there was no basis to conclude that Rajesh Khosla had consciously attempted to evade customs duty. The tribunal observed that the gold content sometimes turned out to be lower than declared, leading to overpayment and refund claims, an inconsistency that contradicted the notion of intentional evasion.
CVD and SAD Paid Post-GST Eligible for CENVAT Credit Under Earlier Regime: CESTAT Allows Cash Refund u/s 142(3)
M/s Asiatic Drugs &Pharmaceuticals Pvt. Ltd vs Commissioner 2025 TAXSCAN (CESTAT) 517
Asiatic Drugs and Pharmaceuticals Pvt. Ltd., the appellant, is a manufacturer and exporter of pharmaceutical products. Before the rollout of GST, the company imported raw materials under Advance Authorization licenses, which allowed duty-free imports on the condition that the export obligation was fulfilled. When the appellant failed to meet the export obligations in part, it voluntarily paid the applicable Basic Customs Duty (BCD), Countervailing Duty (CVD), and Special Additional Duty (SAD), along with interest, after July 1, 2017, the date GST came into force.
The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) held that the claim was rightly covered under Section 142(3) of the CGST Act and that the mere timing of payment post-GST did not disqualify it. The tribunal observed that the CVD and SAD were duties that would have been eligible for credit under the pre-GST regime, and since such credit could not be utilized after July 1, 2017, a refund in cash was both justified and legally permissible.
Relief for Sony India: CESTAT Confirms Importers Not Availing Credit Are Eligible for Concessional CVD at 1%
M/s. Sony India Private Limitedvs Commissioner of Customs 2025 TAXSCAN (CESTAT) 518
Sony India, the appellant, had initially paid 6% Countervailing Duty (CVD) at the time of importation under Sl. No. 263A(i) of Notification No. 12/2012-CE. Later, based on the Supreme Court’s ruling in SRF Ltd. v. Commissioner of Customs, which clarified the eligibility criteria for a 1% concessional rate under Sl. No. 263A(ii), the company sought reassessment of its Bills of Entry, claiming that it had not availed CENVAT credit on the inputs or capital goods.
The two-member bench comprising Dr. D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) found that the appellant had rightly approached the appellate route and that the original remand directions to reassess in light of the SRF Ltd. decision were not followed.
The tribunal rejected the department’s claim that the concessional rate was sought as an afterthought and explained that the appellant’s request was based on a settled legal position that applied to similarly situated importers. It also observed that various customs authorities had granted refunds post-reassessment in similar matters.
Relief for Godrej and Boyce: CESTAT Rules Mere Non-Submission of Re-Warehousing Certificates Not Sufficient to Sustain Duty Demand
M/s Godrej And Boyce Mfg vsCommissioner of CGST 2025 TAXSCAN (CESTAT) 519
The appeal arose from an order of the Commissioner (Appeals) which upheld the demand of duty on the ground that the appellant failed to furnish re-warehousing certificates for clearances made between October 2003 and November 2008 under exemption Notification Nos. 22/2003-CE and 53/2003-Cus (NT).
The single-member bench of Dr. Suvendu Kumar Pati (Judicial Member) examined the remand directions and the department’s obligations under Circular No. 579/16/2001-CX. The tribunal observed that despite efforts by the department, the required verification could not be completed due to administrative challenges, and there was no evidence on record to confirm or deny receipt of goods.
The tribunal also took note of the appellant’s limited cooperation but concluded that in the absence of evidence from the consignee’s jurisdiction and failure to follow the verification protocol under the CBEC circular, the demand could not be sustained solely on the ground of missing re-warehousing certificates. The tribunal set aside the Commissioner (Appeals)’s order and allowed the appeal, granting consequential relief to Godrej and Boyce Manufacturing Co. Ltd.
Paper Importer Claims Customs Duty Exemption Using Forged Scrips: CESTAT Upholds ₹65.42 Lakh Duty Demand
M/s Raja Ram And Company vsPrincipal Commissioner of Customs (Import) 2025 TAXSCAN (CESTAT) 520
The Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld a demand of Rs. 65.42 lakh in customs duty against Raja Ram and Company, holding that the importer had used forged Duty Free Scrips to claim exemption from customs duty and that such fraud nullifies any benefit, irrespective of the importer’s alleged intent or knowledge.
The two-member bench comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) held that the importer’s ignorance was no defense in the face of clear evidence of forged instruments being used for duty payment. The tribunal cited Supreme Court rulings in Munjal Showa Ltd. and CESTAT decisions in Nidhi Enterprises and Bimal Paper Pvt. Ltd., explaining the legal principle that fraud vitiates everything.
Irregularities in Phytosanitary Certificates Alone Do Not Prove Origin Fraud: CESTAT
M/s Kesar Spices vs Commissionerof Customs-Mundra 2025 TAXSCAN (CESTAT) 521
Kesar Spices, the appellant, imported a consignment of “walnuts in shell” from Afghanistan and claimed exemption from Basic Customs Duty under Notification No. 99/2011-Cus dated 09.11.2011, read with the SAFTA Rules of Origin. The benefit was claimed on the strength of a Certificate of Origin (COO) issued by the Afghanistan Chamber of Commerce and Industries. The goods were imported through Mundra Port and were covered by 1650 bags.
The tribunal observed that the COO was not invalidated or denied by the Afghan authorities and that no follow-up verification or inter-governmental consultation was undertaken as required under SAFTA. It held that the phytosanitary certificates, even if found to contain errors or inconsistencies, were not determinative of the origin of the goods and could not override the verified COO.
Excel Sheet Retrieved from Pen Drive Without Certificate u/s 138C of Customs is Inadmissible Evidence: CESTAT
M/s. Composite Impex vs ThePrincipal Commissioner of Customs (Import) 2025 TAXSCAN (CESTAT) 522
Composite Impex, an importer of automotive safety glass from China, and its partner Rajiv Dhuper, challenged an order passed by the Principal Commissioner of Customs, ICD-Tughlakabad, New Delhi, which had confirmed demands for differential customs duty, interest, and penalties based on alleged under-valuation of imported goods.
The two-member bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member), observed that under Section 138C of the Customs Act, any electronic record must be accompanied by a valid certificate to be admissible as evidence. The tribunal referred to the Supreme Court judgments in Anvar P.V. v. P.K. Basheer and Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, which mandates strict compliance with the evidentiary rules for electronic documents. It held that the Excel sheet was inadmissible in the absence of the certificate required under Section 138C.
Importer’s Admission on Undervaluation of Goods Does not Absolve Customs from Verification before Redetermining Value: CESTAT
M/s. Krishna Impex Internationalvs Commissioner of Customs (ICD) 2025 TAXSCAN (CESTAT) 523
The appeal was filed by Krishna Impex International, which faced allegations of undervaluing consignments of Tussah Silk Yarn imported between 2005 and 2008. The Revenue authorities, relying heavily on the statement of the proprietor, Shri Amarnath Jhunjhunwala, had re-determined the value and imposed differential duty, penalty, and redemption fine.
The Tribunal found that the basis for revaluation was flawed as it lacked substantive verification or evidence apart from the self-incriminatory statement of the importer. The statement itself was conditional in nature, with the repeated use of the phrase “might be” when estimating actual values, which clearly indicated uncertainty and lacked conclusive admission.
In addition, it noted several landmark decisions including Eicher Tractors Ltd. v. Commissioner of Customs, Sanjivani Non-Ferrous Trading Pvt. Ltd., and Neeraj Silk Mills, reiterating that the burden of proving undervaluation lies with the department. Without any inquiry into the quality, quantity, or characteristics of the goods, or any proof of contemporaneous imports at higher prices, the Tribunal concluded that the customs authorities had failed to discharge their burden of proof.
Affiliation Fees Collected by University from 2012- 2016 Exempted from Service Tax: CESTAT
Principal Commissioner of CGST& Central Excise, Jabalpur vs M/s. Rani Durgawati Vishwavidyalaya 2025 TAXSCAN (CESTAT) 524
The Revenue had raised a demand of over ₹1.58 crore as service tax on affiliation fees and rental income collected by the university during July 2012 to December 2016. However, the Commissioner (Appeals) had earlier set aside this demand, recognizing the services as part of core educational functions.
On appeal by the Revenue, the CESTAT reaffirmed the exemption, stating that affiliation activities are integral to the delivery of higher education, thus falling under the negative list of services or within the scope of exempted educational services under Notification No. 25/2012-ST.
The bench of Binu Tamta (judicial member) and Hemambika R Priya (Technical member) cited precedents including the Karnataka High Court’s ruling in Rajiv Gandhi University of Health Sciences, upheld by the Supreme Court, which clarified that affiliation services are directly linked to education and therefore not taxable.
CENVAT Credit Availed Without Separate Records for Exempted and Dutiable Goods: CESTAT Orders Demand Recomputation
The Andhra Sugars Ltd vsCommissioner of Central Tax 2025 TAXSCAN (CESTAT) 525
The Hyderabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a manufacturer availing CENVAT credit on input services used for both dutiable and exempted goods without maintaining separate records must recompute the credit attributable to exempted goods, and that the extended period of limitation and penalties are not applicable in the absence of suppression or fraud.
The tribunal ruled that for the period before April 1, 2008, the appellant must pay the amount demanded in the show cause notices, as there was no statutory provision for proportionate reversal. For the period after April 1, 2008, the appellant may recompute and reverse only the proportionate credit attributable to exempted goods as per Rule 6(3A).
The tribunal observed that the issue was interpretative and that extended limitation under Section 11A was not applicable due to the absence of suppression, fraud, or willful misstatement. Accordingly, the penalty under Rule 15(2) and Section 11AC was also set aside.
Freight and Insurance Included in Assessable Value for FOR Destination Sales: CESTAT
Pawan Power & Telecom Ltd vsCommissioner of Central Tax 2025 TAXSCAN (CESTAT) 526
Pawan Power & Telecom Ltd, the appellant, is a manufacturer of PVC/HDPE/XLPE insulated and sheathed aluminium copper cables and AAA conductors. The goods were supplied to various electricity boards under contractual purchase orders, which, according to the department, obligated the appellant to bear costs such as packing, forwarding, freight, insurance, and unloading up to the point of delivery.
The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) observed that the appellant argued the existence of a separate ex-works price and denial of insurance costs, but the contract terms showed that both freight and insurance were contractually included and the buyer’s premises was the final point of acceptance.
CESTAT denies CENVAT Credit on Iron and Steel Items due to Unverified Usage in Capital Goods
M/s Simbhaoli Sugar Ltd. vsCommissioner, Central Excise, Noida 2025 TAXSCAN (CESTAT) 527
The Allahabad Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) denied CENVAT credit claimed on iron and steel items due to the assessee’s failure to provide sufficient evidence proving their use in the fabrication, repair, or maintenance of capital goods or supporting structures.
The tribunal held that the burden of proof was on the assessee, who did not justify the claim with evidence. Therefore, the claim for Cenvat Credit was rejected, and the interest and penalties were confirmed. The Commissioner (Appeals) upheld the order due to lack of credible defense and evidence.
Reimbursed Expenses Excludable only When 'Pure Agent' Conditions u/r 5 of Service Tax Rules are Satisfied: CESTAT
Rakesh Kumar Agarwal vsCommissioner of Central Excise & CGST 2025 TAXSCAN (CESTAT) 528
The appellant, Shri Rakesh Kumar Agarwal, is a government-approved property valuer who provides land and property valuation services to banks and financial institutions for loan-related purposes. Based on information received from the Income Tax Department for the financial years 2015-16 and 2016-17, the service tax department found that the appellant had received gross payments of Rs. 34,67,283 and Rs. 26,67,360, respectively, but had not paid service tax on these amounts.
The two-member bench comprising Judicial Member P.K. Choudhary observed that the facts were squarely covered by the Supreme Court’s judgment in Intercontinental Consultants. The tribunal clarified that for reimbursement to be excluded, the service provider must meet all eight conditions under Rule 5(2), including separate disclosure, no profit on the reimbursed amounts, and the client’s authorization for third-party payments.
The tribunal ruled that the impugned orders could not be sustained as they were passed without considering the legal position settled by the apex court. Accordingly, both appeals were allowed, and the service tax demands along with penalties were set aside, granting consequential relief to the appellant.
Branded Pan Masala and Gutkha Cleared Without Paying Excise Duty: CESTAT upholds Evasion Charges
Shri Sandeep Matta vsCommissioner of CGST & Central Excise - Indore 2025 TAXSCAN (CESTAT) 529
Acting on intelligence, the Central Excise Department conducted simultaneous searches at five locations on 13 July 2015, seizing goods, machinery, and 6.76 lakh in cash. The total value of seized goods was 25.85 lakh. Statements recorded during the operation confirmed that no stock registers were maintained and goods were sold without bills.
The single-member bench comprising Dr. Rachna Gupta (Judicial Member) found that the appellants had admitted to manufacturing and selling Pan Masala and Gutkha without proper authorization or invoices. They could not produce any permission from the brand owners for manufacturing goods in their name. The tribunal observed that admissions made in statements require no further proof, and the evidence on record was sufficient to uphold the charges.
CESTAT Quashes Service Tax Demand, Holding Diesel Generator Set Lease Was Deemed Sale Not Taxable as Service
M/S SPAIN ELECTRONOTICS vsCOMMISSIONER(APPEALS-I) 2025 TAXSCAN (CESTAT) 530
The primary issue concerned a show cause notice dated 05.07.2013, alleging that the appellant had provided taxable services by leasing 1000 KVA DG sets to Indian Oil Corporation Limited (IOCL) for use at the Panipat-Jalandhar LPG pipeline. The department argued that the appellant retained control over the equipment, and therefore the transaction was chargeable under Section 65(105)(zzzzj) of the Finance Act, 1994 as a service.
The Tribunal found merit in this argument, noting that the equipment was clearly identified, delivered, and controlled by IOCL during the lease term, with the appellant having no residual right of usage or transfer. It held that the transaction fell squarely under Article 366(29A)(d), and therefore, service tax was inapplicable. The Bench concluded that only VAT could have been levied by the State on such contracts.
With respect to another show cause notice dated 15.09.2015 and a subsequent demand dated 04.04.2016, the Tribunal held that the appellant had sold DG sets and performed incidental installation and commissioning without charging any additional amount. It ruled that this did not amount to provision of “works contract services” as contended by the department.
CESTAT Upholds Service Tax Demand, Citing Validity of Levy on Renting of Immovable Property
SATNAM KAUR vs COMMISSIONER OFCENTRAL EXCISE AND SERVICE TAX 2025 TAXSCAN (CESTAT) 531
Satnam Kaur had challenged an order dated August 29, 2013, passed by the Commissioner (Appeals), Meerut, which confirmed a service tax demand on rental income received from commercial entities, Koutons Retails India Ltd. and Bharti Retails India Ltd. The appellant had argued that renting immovable property should not be subject to service tax, relying on a stay granted by the Supreme Court in a similar case involving the Retailers Association of India (2011). However, the tribunal noted that multiple High Courts had already upheld the constitutional validity of the levy.
The case originated from scrutiny of the appellant’s service tax returns, which revealed non-payment of tax on rental income between October 2009 and September 2011. A show-cause notice was issued in September 2011, but the appellant neither submitted a written reply nor attended personal hearings.
The bench, comprising Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member), dismissed the appeal, stating that the impugned order was legally sound. The tribunal upheld the service tax demand, interest, and the reduced penalty, concluding that no interference was warranted. The stay application was also disposed of accordingly.
CESTAT Sets Aside Penalty on Freight Forwarder as it Finds No Evidence of Intended Export
Saurav Chopra vs Commissioner ofCustoms
2025 TAXSCAN (CESTAT) 532
Coming to the facts of the case, a show-cause notice was issued on 28-8-2014 to the appellant and six others, including Anil Gadodia and Mayur Ranjan. The notice stated that the assessee had actively participated in a smuggling syndicate by arranging fraudulent exports of red sanders to China. The accusations were based on statements claiming that Chopra had facilitated the transport of consignments totaling over 30 metric tonnes of Red Sanders, some of which were later seized by Hong Kong Customs.
The Tribunal also relied on its earlier rulings in the cases of Anil Gadodia and Mayur Ranjan. The bench further noted that “The appellant may be a freight forwarder, but in the absence of any evidence that the goods were to be exported, a penalty could not have been imposed upon the appellant.”
'Trading Activity Not Taxable as Business Auxiliary Service': CESTAT Quashes Service Tax Demand
M/s. Agarwal Traders vsCommissioner (Appeals) Central Excise & CGST 2025 TAXSCAN (CESTAT) 533
In this case, the assessee appealed against the order passed by the Commissioner (Appeals), CGST and Central Excise, which had upheld a demand for service tax on commissions earned by the appellant for selling Vodafone SIM cards and recharge vouchers during April to June 2012.
The Tribunal observed that the assessee’s role was purely a trading activity, conducted on a principal-to-principal basis with Vodafone, and did not involve promoting or marketing services as an agent. It noted that Vodafone had already paid service tax on the SIM cards and recharge coupons, making the additional demand on the appellant amount to double taxation.
The CESTAT, comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member), set aside the impugned order and allowed the assessee’s appeal.
CESTAT confirms Duty on Sprout Sale Proceeds Retained by Job Worker in Malt Manufacturing
M/s.Malsters & Blenders(India) Pvt. Ltd. vs Commissioner of Central Excise 2025 TAXSCAN (CESTAT) 534
The Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has upheld a ruling requiring the appellant, M/s. Maisters & Blenders (India) Pvt. Ltd., to include the value of sprouts sold to third parties in the assessable value of malt manufactured on a job-work basis for United Breweries Limited (UBL). The tribunal dismissed the appeal filed by the company and confirmed the demand of Rs. 14,88,495 in unpaid excise duty, along with interest and penalties, for the period from April 2016 to June 2017.
During the audit, it was observed that the appellant, engaged in manufacturing malt for UBL, had not included the proceeds from the sale of sprouts, which is a by-product of barley processing, in the assessable value of the malt. The agreement between the parties stipulated that the thin and sprout by-products would accrue to the benefit of the job worker, Maisters & Blenders. The authorities observed that the sale proceeds of these sprouts should have been added to the cost of production of malt, as per Section 4(1)(b) of the Central Excise Act, 1944, read with the Central Excise Valuation Rules, 2000.
CESTAT relied on a previous ruling involving the same appellant, where the tribunal had held that the sale proceeds of sprouts must be included in the assessable value of malt supplied to UBL. The bench, comprising Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member), upheld the impugned order.
Relief for Samsung: CESTAT Rules Imported ‘Assembly Front’ Falls Under ‘Display Assembly’ for Customs Duty Exemption
Samsung India Electronics Pvt.Ltd. vs Deputy Commissioner of Customs 2025 TAXSCAN (CESTAT) 535
Samsung India, the appellant, is engaged in the manufacture and sale of mobile phones and imports ‘Assembly Fronts’ used in high-end models such as the Galaxy Note 10. These assemblies consist primarily of AMOLED display screens, along with other components like metal frames, vibration motors, sub-PCBA, and non-detachable batteries. The company claimed exemption from basic customs duty on these imports under the aforementioned notification, which exempts “Display Assembly” used in mobile phone manufacturing.
The two-member bench comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) ruled in favor of Samsung. The tribunal held that the Notification does not require that the assembly consist “only” of display-related components and that no such limitation can be read into the text. The tribunal explained that exemption notifications must be interpreted by their language, not external intent or executive policies like the PMP.
Physical Verification At Exporter’s Premises Not Mandatory for Customs Brokers, Verification via Reliable Documents is Sufficient: CESTAT
M/s United Cargo Services vsCommissioner of Customs 2025 TAXSCAN (CESTAT) 536
United Cargo Services, the appellant, is a licensed Customs Broker whose license was revoked by the Commissioner of Customs (Airport & General), New Delhi, through an order dated 11.11.2024. The order also imposed a penalty and forfeited the security deposit.
The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) found that the allegations under Regulations 10(d) and 10(e) were vague and unsupported by specific evidence. It was observed that a Customs Broker is not responsible for assessing the value of goods or ensuring the exporter’s ongoing operations. Their responsibility is limited to verifying credentials through valid documents, which the appellant had done.
The tribunal observed that the inquiry officer had found no violation by the Customs Broker and that the adjudicating authority failed to provide any valid reason to disregard the inquiry report. It reiterated that the obligation under Regulation 10(n) can be fulfilled through document-based verification, and there is no requirement for physical inspection of the exporter’s premises.
‘Made in China’ Marking on Some Cartons Not Sufficient to Prove Smuggling Without Test Report or Documentation: CESTAT
Shri Santosh Kumar vsCommissioner of Customs (Preventive) 2025 TAXSCAN (CESTAT) 537
The case arose from a town seizure conducted by the Directorate of Revenue Intelligence (DRI) at a godown in Dankuni, West Bengal, where firecrackers valued at Rs. 5.82 crore were discovered and alleged to be of foreign (Chinese) origin.
The single-member bench comprising R. Muralidhar (Judicial Member) observed that no test reports or documentary evidence had been submitted to substantiate the claim of Chinese origin. The tribunal explained that under the Customs Act, the burden of proof lies on the department in cases involving non-notified goods, and that in the absence of corroborative evidence, markings on “some cartons” were insufficient to prove smuggling.
The tribunal ruled that the proceedings suffered from serious evidentiary and procedural flaws, including a failure to establish the foreign origin of the goods and a disregard for principles of natural justice. It found that the penalties imposed were unsustainable in law and accordingly set aside the order of the Commissioner (Appeals) insofar as it related to the imposition of penalties on the appellants. The appeal was allowed with consequential relief.
Export Cargo Handling Not a Taxable Service, Cenvat Credit Reversal u/r 6 Not Applicable: CESTAT
Commissioner of CentralExcise-Kutch vs Transworld Terminals Private Limited 2025 TAXSCAN (CESTAT) 538
Transworld Terminals Private Limited, the respondent, is engaged in providing cargo handling and warehousing services for import and export consignments. For the period from 2011–12 to 2015–16, the department, based on CERA audit observations, issued a show cause notice alleging short reversal of Cenvat credit of Rs. 1,71,80,619 under Rule 6 of the Cenvat Credit Rules.
The two-member bench comprising Mr. Somesh Arora (Judicial Member) and Mr. Satendra Vikram Singh (Technical Member)observed that regular audits conducted by the department had not raised any objection regarding Cenvat credit reversals. It held that the invocation of the extended limitation period was unjustified. The tribunal further relied on the 2023 CESTAT Chennai decision in St. John CFS Park Pvt. Ltd., which clarified that services explicitly excluded from the definition of taxable service could not be artificially treated as exempted services just to invoke Rule 6 of the CCR.
The tribunal ruled that export cargo handling, being outside the service tax scope, did not qualify as an exempted service and thus did not attract reversal of credit under Rule 6(3). The tribunal dismissed the department’s appeal and upheld the order passed by the Commissioner (Appeals), holding that no Cenvat credit reversal was required and the demand was unsustainable.
Quotations from Unrelated Suppliers Not a Valid Basis for Customs Revaluation: CESTAT
M/s MMM Overseas Pvt Ltd vs ThePrincipal Commissioner of Customs 2025 TAXSCAN (CESTAT) 539
MMM Overseas Pvt. Ltd., the appellant, imported iron and self-drilling screws from China. Following a search at the residence and godown of its Director, Mahesh Sabharwal, the Directorate of Revenue Intelligence (DRI) initiated proceedings alleging undervaluation of imports. The revenue relied on quotations retrieved from the appellant’s email account and invoices from another importer, Sagar Impex, to re-determine the transaction value.
The tribunal held that documents from unrelated suppliers cannot be used for customs valuation unless supported by direct relevance and verified through proper procedures. It emphasized that Section 138C of the Customs Act mandates a certificate for electronic evidence, and its absence rendered the email printouts inadmissible.
The tribunal also observed that statements from third parties like Khusagar Aggarwal, made in different proceedings, cannot be relied upon unless the person is produced as a witness and subjected to cross-examination, in line with the principles of natural justice and the requirements of Section 138B of the Customs Act. The tribunal found that once this inadmissible evidence was excluded, there was no valid basis to reject the transaction value declared by the appellant.
CESTAT finds Impugned Order Cryptic in Nature: Remands Matter for Denovo Adjudication
Rishab Mineral Industries vsCommissioner of Central Goods, Service Tax & Central Excise 2025 TAXSCAN (CESTAT) 540
The appellant, Rishab Mineral Industries, is engaged in the manufacture of quartz/silica/other mineral powders/lumps, etc. The department observed that the appellant was liable to pay service tax under the reverse charge mechanism on the taxable service of Rs. 10.54 lakhs in service tax for Transport of Goods by Road (GTA) from 2011-12 to 2015-16.
The bench observed that, on the face of it, the principle of audi alteram partem, or hearing both sides, has not actually been violated, as the assessee did not file a reply to the SCN. The bench noted that the authorised representative of the appellant had appeared before the original adjudicating authority and sought an adjournment from 16.03.2017 up to 10.04.2017 for filing his reply and for making his submissions. But as the reply was not submitted on 10.04.2017, the original adjudicating authority, based on the available record, decided the matter.
The bench, by going through the impugned order, noted that it was cryptic in nature. The tribunal noted that, except for relying upon the decision of this tribunal in the case of M/sMSPL Limited vs. Commissioner of Central Excise, Belgaon reported 2009 (013) STR 0554, no other findings have been given by the Commissioner (Appeals). The bench remanded the matter back to the original adjudicating authority.
Denial of Tax Credit Violates Articles 14 & 300A: CESTAT Holds Rejection of Transitional Credit Refund on Limitation Grounds Unsustainable
M/s. Advance Micro FertilizersPvt.Ltd. vs Commissioner of Central Excise 2025 TAXSCAN (CESTAT) 541
The appellant, M/s. Advance Micro Fertilisers Pvt. Ltd., a manufacturer of agricultural products such as insecticides and plant growth regulators, had deposited the service tax under the existing law but could not avail the Cenvat credit due to the transition to GST. The company carried forward the credit through the TRAN-I form under Section 140 of the CGST Act, 2017.
The tribunal noted that Section 142(3) of the CGST Act mandates the disposal of refund claims under the existing law, irrespective of limitations under Section 11B of the Central Excise Act 1944.
The bench, by going through the decisions of various high courts, observed that denial of credit of tax or duty paid under existing law would amount to a violation of Articles 14 and 300 A of the Constitution of India and that, according to Article 300 A of the Indian Constitution, unused credit is recognised as a vested right and property.
CESTAT allows Appeal Restoration on 20% Pre-Deposit in Customs Duty Case Involving Identical Imported Machine
M/s. Office Plus Limited vsCommissioner of Customs (Imports) 2025 TAXSCAN (CESTAT) 542
Coming to the facts of the present case, the appellant was appointed as a super distributor by M/s. Panasonic Asia Pacific Limited imported facsimile machines of the Panasonic Brand into India for onwards sale to regional distributors. The machines were classified by the appellant under Customs Tariff Item (CTI) 8443 32 60, whereas the department believed it fell under CTI 8443 39 70. Due to which a Show Cause Notice was issued, and later the SCN was confirmed by the additional commissioner.
The bench disposed of the modification applications on the condition that both the appellant and Jagjeet Singh make a deposit of 20% of the penalty amount confirmed within a period of six weeks from the date of the order, and the matter was restored to the Commissioner (Appeals).
The bench, consisting of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member), clarified that if the appellant and Jagjeet Singh fail to make the pre-deposit within six weeks from today, the appeal(s) filed before the Commissioner (Appeals) shall stand dismissed.
Certificate u/s 36B of Central Excise Act is Mandatory for Admissibility of Printouts fom Seized Electronic Evidence :CESTAT
M/s. Composite Impex vs ThePrincipal Commissioner of Customs 2025 TAXSCAN (CESTAT) 543
Automotive windshields (automotive safety glasses) of different sizes for different models were imported by Composite Impex, the assessee, and were categorized under customs tariff. Max of M/s. Dongguan Benson Automobile Glass Co. Ltd., China, sent an Excel sheet printout of the data retrieved from "WeChat" to the assessee's partner, Rajiv Dhuper, claiming that the assessee had suppressed the actual transaction value and engaged in undervaluation.
The Tribunal pointed out that the printout was taken from secondary evidence, specifically the pen drive, which, according to section 138C of the Customs Act, could not have been used as evidence in the absence of a certificate.
The two member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical) has observed that, “that a printout generated from a secondary electronic evidence that has been seized, cannot be admitted in evidence unless the statutory conditions laid down in section 36B of the Central Excise Act are complied with.”
Mere Postal Dispatch Without Proof of Delivery Does Not Satisfy Service Requirements u/s 37C(1) of Central Excise: CESTAT
M/s Hotel Elora vs Commissionerof Central Excise 2025 TAXSCAN (CESTAT) 544
Hotel Elora, the appellant, challenged the dismissal of their appeal by the Commissioner (Appeals), who rejected it on the ground of limitation. The Order-in-Original dated 26.02.2022 had allegedly never been received by the appellant. It was only after recovery proceedings began that the appellant became aware of the order and requested a copy, which was received on 09.08.2022. The appellant then filed an appeal on 02.11.2022.
The two-member bench comprising Judicial Member P.K. Choudhary observed that mere dispatch of an order is not enough, and the department must provide proof of delivery in accordance with the law. In the absence of such proof, the presumption of service is not legally sustainable. The tribunal held that the dismissal of the appeal on limitation was unjustified and contrary to legal requirements.
The tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) to decide the case on merits, without re-examining the limitation issue. The appeal was allowed by way of remand.
Service Tax on Conversion Charges for Long-Term Industrial Lease: CESTAT Allows Refund u/s 104 of Finance Act
Commissioner of Central Goods& Service Tax vs M/s. Sesame Foods Pvt. Ltd. 2025 TAXSCAN (CESTAT) 545
The Revenue-appellant,challenged the order that set aside the order-in-original and allowed the respondent’s refund claim under Section 104 of the Finance Act, 1994. In this case, Sesame Foods Pvt. Ltd.,respondent-assessee,was a 100% EOU engaged in manufacturing sesame-based products. It was allotted 20,000 sq. mt. industrial plot by RIICO through a 99-year lease dated 21.05.1999.
The two member bench comprising Binu Tamta(Judicial Member) and Hemambika R.Priya(Technical Member) noted that the refund was rightly allowed, as no service tax was applicable on conversion charges paid to RIICO for changing the land use from industrial to commercial. This refund was granted under Section 104(2) of the Finance Act, 1994.
The Commissioner (Appeals) checked if the respondent had passed the tax burden to others. The respondent provided a certificate confirming the tax amount of ₹1,50,44,629 paid to RIICO was not passed on. The company’s accounts also showed this amount as refundable from the government.
Relief to Punjab Gramin Bank: CESTAT Rules Cenvat Credit Allowed Without ISD Registration If Reflected in ST-3 Returns
Punjab Gramin Bank vsCommissioner of Central Excise, Goods & Service Tax 2025 TAXSCAN (CESTAT) 546
Punjab Gramin Bank, the appellant, is a registered service provider under the categories of banking and financial services, business auxiliary services, and card-related services. During audit proceedings for the financial year 2017-18, the department alleged that the appellant wrongly availed Cenvat credit on Education Cess, Secondary and Higher Education Cess, Swachh Bharat Cess, and Krishi Kalyan Cess.
The single-member bench of S.S. Garg (Judicial Member) observed that the appellant was performing ISD-like functions and that the distribution of credit through ST-3 returns aligned with the functional intent of an input service distributor. The tribunal observed that substantive benefits cannot be denied due to procedural lapses, particularly when there is no dispute regarding the receipt and use of input services.
No Retrospective Effect to S.114AA of Customs Act: CESTAT Sets Aside Penalty
INDUSIND MEDIA ANDCOMMUNICATIONS LIMITED vs PRINCIPAL COMMISSIONER 2025 TAXSCAN (CESTAT) 547
Indusind Media and Communications Limited, appellant-assessee, filed a Bill of Entry on 26.6.2003. After investigation, a Show Cause Notice was issued on 27.6.2014 proposing recovery of differential duty, confiscation of goods, redemption fine under section 125, and penalties under sections 112(a) and 114AA of the Customs Act.
The tribunal reviewed the arguments and records. It kept the redemption fine of Rs. 10,00,000 unchanged because the Supreme Court had upheld the earlier order. It reduced the penalty under section 112(a) from Rs. 10,00,000 to Rs. 5,00,000, considering the lower duty amount.
The two member bench comprising Justice Dilip Gupta(President) and P.V.Subba Rao(Technical Member) partly allowed the appeal by setting aside the penalty under section 114AA, lowering the penalty under section 112(a), and confirming the rest of the order.
CESTAT Dismisses Appeals as Legal Heirs Settle Tax Dispute Under SVLDR Scheme
Padmini vs The Commissioner ofCGST & Central Excise 2025 TAXSCAN (CESTAT) 548
The appeals were filed by Padmini, K. Ramesh, K. Jegadeesan and Arayee, all legal heirs of the deceased proprietor, challenging a 2015 order passed by the Commissioner of Central Excise (Appeals-I), Salem. During proceedings, their consultant R. Balagopal informed the tribunal that the matter had been resolved under the SVLDR scheme, with the tax liability already discharged.
The tribunal's order brings closure to the long-pending tax dispute that had continued even after the original appellant's death. CESTAT Bench pronounced the dismissal order in open court, upholding the finality that comes with settlement under the SVLDR scheme.
Setback to Schlumberger: CESTAT Disallows Cenvat Credit of Education and SHE Cess as Refund Not Permissible Post-GST
M/s Schlumberger Asia ServicesLtd vs Commissioner of Excise and Service Tax 2025 TAXSCAN (CESTAT) 549
Schlumberger Asia Services Ltd., the appellant, had filed a refund claim amounting to Rs. 49,28,511 on August 30, 2019, for unutilized Cenvat credit of the said cesses lying in their credit ledger as of June 30, 2017. Following the introduction of the GST regime on July 1, 2017, the appellant sought to transfer the unutilized balance into the GST system and later claimed a refund for the amounts that remained unadjusted.
The single-member bench of S.S. Garg (Judicial Member) quoted the High Court’s ruling in Muthoot Finance Ltd. v. Union of India, which held that refund of such cesses post-GST is not maintainable, as there was no enabling provision under the GST framework. The tribunal also observed that the refund claim could not be revived or entertained merely because the assessee was unable to utilize the credit, especially when the levy itself had been abolished and not carried forward under the new tax law.
CESTAT Abates Customs Appeals as Sole Appellant Dies, Invokes ‘No Taxation of the Dead’ Principle
Smt. Chand Kavar Bhandari vsCommissioner of Customs 2025 TAXSCAN (CESTAT) 550
Chand Kavar Bhandari, the proprietrix of B.M. Shah Corporation had filed the appeals challenging an order passed by the Commissioner of Customs in 2013. However, during the pendency of the proceedings, she passed away on February 1, 2018, at the age of 83. Her death certificate, issued by the Greater Chennai Corporation, was submitted before the tribunal by her advocate, Shri R. Ramkumar.
The bench ruled that the appeals automatically abated under Rule 22 of the CESTAT (Procedure) Rules, 1982. This rule states that legal proceedings shall abate upon the death of an appellant unless a successor-in-interest or legal representative applies to continue the case within 60 days. In this instance, no such application was filed.
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