CESTAT Weekly Round-up

The Tribunal observed that Balaji had correctly adjusted the pre-SCN deposit against the 25% penalty, meeting statutory requirements. Therefore, the same amount could not also be used to reduce duty liability. The tribunal upheld the duty demand of ₹5,32,85,623/- and dismissed Balaji’s appeal.

The two-member bench comprising Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) dismissed the appeal, holding that the pre-SCN penalty deposit cannot be re-appropriated toward duty. Duty demand of ₹5.32 crore confirmed

No Confiscated Goods and No Fake Invoices: CESTAT Sets Aside Penalty on Director Under Rule 26

The Principal bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the penalty imposed on the Director of a company, ruling that there were no confiscated goods or fake invoices under Rule 26 of the Central Excise Rules, 2002.

The tribunal noted that in the present case, no goods were confiscated, and there was no evidence of invoices being issued without actual supply. Consequently, the conditions for imposing a penalty under Rule 26 were not met, and the two-member bench, comprising Binu Tamta (Judicial Member) and P. V. Subba Rao (Technical Member), set aside the penalty imposed on Mr Arun, granting consequential relief.

Customs Dept has No Power to Merge Shipping Bills u/s 50 and 51 for Duty Assessment: CESTAT Sets Aside ₹55 Crore Export Duty Demand

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has ruled that Customs authorities lack statutory authority under Sections 50 and 51 to jointly assess multiple Shipping Bills for the determination of export duty.

The Bench comprising Dilip Gupta (President) and P.V. Subba Rao (Technical Member) rejected the Department’s approach, holding that the Customs Act nowhere permits the assessment of multiple Shipping Bills together.

It was observed that each Shipping Bill is a self-contained export declaration and the fundamental unit of assessment. The Tribunal held that the Commissioner’s action amounted to reassessment beyond jurisdiction, as no officer is empowered to combine Shipping Bills even for practical convenience.

Fe Content of Iron Ore to Be Determined on Wet Basis: CESTAT relies on Supreme Court Ruling to set aside Duty Demand

The Principal bench of Customs, Excise and Service Tax Appellate Tribunal CESTAT, New Delhi, has reaffirmed that Fe (iron) content in iron ore fines must be determined on a wet basis in line with the Supreme Court’s ruling in Gangadhar Narsingdas.

The Tribunal noted that the Commissioner had no discretion to disregard a binding Supreme Court decision. Also, administrative instructions or testing standards cannot override judicial pronouncements. The CBEC circular implementing the Supreme Court ruling had statutory force for departmental officers. Hence, assessing Fe content on a dry basis was contrary to both law and discipline.

The Bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) set aside the duty demand, penalties, and confiscations against all appellants, allowing the appeals with consequential relief.

Department Barred from Reopening Settled Classification: CESTAT Upholds Claim for Exemption of Duty on Light Green Float Glass

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench at New Delhi, dismissed the Revenue’s appeal and upheld the classification of Light Green Float Glass imported by Asahi India Glass Ltd. under CTI 7005 10 10, entitling it to exemption of duty.

The Tribunal held that Light Green Float Glass imported by Asahi India Glass Ltd. is correctly classifiable under CTI 7005 10 10; The goods are eligible for duty exemption under Notification No. 46/2011-Cus; and the Department’s reliance on CBIC Circular No. 23/2024 is misplaced, as it cannot override prior accepted appellate orders.

Accordingly, the two-member bench comprising Dilip Gupta (President) and Hemambika R. Priya (Technical Member) dismissed the Department’s appeal and upheld the impugned order of the Commissioner (Appeals).

Employee Welfare Expenses Forming Part of HR Policy Eligible for CENVAT Credit: CESTAT in SBI Cards Case

The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that employee welfare expenses forming part of a company’s HR policy are eligible for CENVAT credit.

The tribunal explained that since the issue involved interpretation of complex provisions and had been referred to a Larger Bench, the allegation of suppression with intent to evade tax could not be sustained.

The tribunal set aside the impugned order on both merits and limitation, holding that CENVAT credit on group mediclaim insurance was admissible and the demand was time-barred. The appeal was allowed with consequential relief to the appellant.

Taxpayer Not Entitled to Refund of Excess Excise Duty in Absence of Provisional Assessment: CESTAT

The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that an assessee who has not opted for provisional assessment is not entitled to claim a refund of excess excise duty paid.

The single-member bench comprising S. S. Garg (Judicial Member) observed that the Larger Bench of the Tribunal, through Interim Order No. 13/2025 dated September 12, 2025, had already settled the issue.

The Larger Bench, relying on the Mauria Udyog Ltd. judgment, held that an assessee who has not opted for provisional assessment is not entitled to claim a refund of excess duty paid under Section 11B of the Central Excise Act, 1944.

Service Tax Demand Notice without Categ: CESTAT sets Aside Order

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) recently set aside a service tax demand raised against an assessee noting that the Show Cause Notice (SCN) raising demand lacked category-wise quantification of tax, rendering it void ab Initio

The Bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) observed that a demand raised without identifying the exact service categories and quantifying tax under each head is unsustainable and void ab initio.

Accordingly, CESTAT set aside the impugned order confirming the ₹13.35 crore demand, along with interest and penalties and directed that consequential relief be granted to the appellant.

Value Loading on Solar Imports Unjustified Without Proof of Related-Party Dealings: CESTAT Dismisses Revenue Appeal in Customs Valuation Case

The bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, held that in the absence of evidence showing an international transaction between related parties, there is no justification for value loading on solar imports under the CustomsAct, 1962.

The Tribunal emphasized that under the Customs Act, 1962, value additions or disallowances can only be made when statutory conditions are not fulfilled, and not merely based on assumptions. Since there was no material to prove that the Hong Kong entity added any mark-up or that the transaction value was manipulated, the Revenue failed to discharge its burden of proof.

The Tribunal further held that the Adjudicating Authority’s approach akin to a transfer pricing analysis used in income tax assessments was misplaced in customs proceedings. Consequently, the Commissioner (Appeals)’s decision to set aside the value loading was upheld.

Accordingly, Revenue’s appeal was dismissed.

Door Handle “Cap Sub-Assembly” Held Classifiable as Part of Vehicle Body: CESTAT Denies 5% Concessional Duty Benefit

In a detailed classification ruling, the CESTAT Principal Bench, New Delhi, has held that the imported “Cap Sub-Assembly for Door Outside Handle” possesses the essential character of a finished door handle and is therefore classifiable under Customs Tariff Heading (CTH) 8708 29 00, which covers “parts and accessories of bodies” of motor vehicles.

The Bench comprising Dr Rachna Gupta (Judicial Member) and Ms Hemambika R. Priya (Technical Member) concluded that the Commissioner correctly classified the imported goods under CTH 8708 29 00 and upheld the ₹1.33 crore differential duty demand along with interest. The appeal was dismissed in its entirety.

The order reaffirms that door handles and their sub-assemblies, even in unfinished form, are integral parts of vehicle bodies and not miscellaneous accessories, and that specific tariff headings take precedence over residual entries for classification purposes.

CESTAT Has No Jurisdiction to Hear Appeals Involving Goods Imported as Baggage as Explicitly Barred by S. 129A(1) of Customs Act

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that it has no jurisdiction to hear appeals involving goods imported as baggage, as such cases are expressly excluded under the proviso to Section 129A(1) of the Customs Act, 1962.

The two-member bench comprising Sanjiv Srivastava (Technical Member) and K. Anpazhakan (Judicial Member) observed that the issue involved the confiscation of goods imported as baggage. It referred to Section 129A(1), which clearly bars the Tribunal from deciding appeals against orders of the Commissioner (Appeals) when such orders concern baggage import or export.

Service Tax on Renting of Immovable Property: CESTAT Holds Demand Time-Barred Amid Conflicting Judicial Views

The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the service tax demand raised for renting of immovable property was barred by limitation, as the issue was subject to conflicting judicial interpretations during the relevant period.

The tribunal pointed out that the department had not established any deliberate suppression or intent to evade tax, which is essential for invoking the extended limitation period under Section 73 of the Finance Act, 1994. The bench explained that in the absence of such intent, the demand raised was barred by limitation.

The tribunal set aside the demand of service tax, interest, and penalties, holding that the appellant was protected under Section 80(2) of the Finance Act, 1994, as the tax was paid promptly after the retrospective amendment. The appeal was allowed in full.

CESTAT Sets aside Service Tax demand on Insurance Surveyor, Cites 'No Suppression'

The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed an appeal, holding that a service tax demand based solely on a discrepancy with Income Tax Form 26AS is not sustainable and that the extended period of limitation was wrongly invoked.

On the limitation aspect, the tribunal found no 'suppression of facts'. The appellant was a registered assessee filing 'Nil' returns and maintaining proper financial records. Relying on the Supreme Court's decision in Pushpam Pharmaceuticals, the tribunal held that suppression must be a deliberate act, and where facts are known to both parties, an omission does not constitute suppression.

Consequently, the extended period of limitation was wrongly invoked, rendering the entire demand time-barred. Accordingly, the CESTAT set aside the demand and allowed the appeal.

Leased Dumpers and Tippers Not Registered in Service Provider’s Name: CESTAT Confirms Cenvat Credit Demand of Rs. 2.17 Cr, Sets Aside Penalty

The principal bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the Cenvat credit demand for Rs. 2.17 crore, ruling that the leased dumpers and tippers were not registered in the name of the service provider. The Tribunal set aside the penalty, recognising the appellant’s bona fide belief in claiming the credit.

However, the Tribunal recognised that the notification clearly stipulated that credit on dumpers/tippers would be available only if registered in the service provider’s name. Since the vehicles were registered with SEFPL, the Cenvat credit claimed for the period in question was not admissible. Therefore, the two-member bench of DR Rachna Gupta (Judicial Member)and Hemambika R. Priya (Technical Member) upheld the demand of Rs. 2.17 crore along with interest.

CESTAT denies Rs. 8.36 Cr Excess CVD Refund Claim w/o Reassessment beyond 1 Year Limitation under Customs Act

The Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, has held that no refund of excess CVD (Countervailing Duty) can be claimed without reassessment and beyond the one-year limitation period, dismissing Rs. 8.36 crore claim.

Additionally, the Supreme Court has consistently held that a claim based on the decision in another taxpayer’s case cannot reopen a finalised assessment. The Tribunal also noted that the Chartered Accountant’s certificate did not sufficiently establish that the incidence of duty was not passed on to the buyers, as required under Section 28D of the Customs Act.

Considering the above, the two-member bench comprising Dr Rachna Gupta (Judicial Member) and HemambikaR. Priya (Technical Member) held that the refund application was barred both on the ground of limitation and for failure to seek reassessment of the self-assessed Bills of Entry.

CESTAT Sets Aside Service Tax Demand on Pre-Amendment Reimbursable Expenses u/s 67 of the Finance Act, 1994

The principal bench of Customs, excise and service tax appellant tribunal (CESTAT) , Delhi held that reimbursable expenses received during 2012–13 do not form part of the taxable value of services. The Tribunal set aside the Commissioner (Appeals) order that had included these expenses in the service tax calculation.

The Tribunal, after considering the submissions, held that the reimbursements received by the appellant during 2012–13 were not part of the value of taxable services. The Tribunal emphasised that the Supreme Court judgment clearly defined that only the gross amount charged for “such service” is taxable, and any reimbursed expenses unrelated to the service itself cannot be included.

The Tribunal noted that the Commissioner (Appeals) erred in upholding the demand, as it failed to apply the law applicable during the relevant period. The CESTAT clarified that the legislative amendment of May 2015 cannot retrospectively affect earlier periods. Consequently, the impugned order demanding service tax on reimbursable expenses for 2012–13 was set aside, and the appeal was allowed.

Composite Works Contracts Not Taxable as ECIS: CESTAT Sets Aside ₹36 Lakh Service Tax Demand and Penalty

The principal bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi held that composite works contracts are not taxable as ECIS and the Tribunal set aside ₹36 lakh service tax demand and penalty.

The Tribunal noted that demands for periods before 31.03.2009 were barred by limitation, and that mere non-payment of tax could not be construed as intentional evasion. The Tribunal also referred to the decision in Uniworth Textiles Ltd. vs. CCE, holding that the burden of proving malafide on the part of the taxpayer rests on the department.

In light of the above, the two-member bench of Dr Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) concluded that the demand for service tax and penalty was unsustainable. The impugned OIA confirming demand under ECIS, even for the abated amount, was therefore set aside. The appeal was allowed, and the service tax demand of ₹36.38 lakhs along with penalty was set aside.

False Claim of Lack of Air Conditioning Facility: CESTAT Upholds Rs. 4.96 Lakh Service Tax and Penalty on Restaurant

The Principal bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed the appeal of M/s Gurukripa Shahenshah Veg & Non-Veg Restaurant, upholding the service tax demand and penalties after concluding that the appellant’s claim of absence of air-conditioning (AC) facility was unsubstantiated and intended to evade tax liability.

The Tribunal also noted that unless the appellant could provide cogent evidence proving the non-availability of AC during the disputed period, exemption under the relevant notification could not be granted.

The two-member bench comprising Dilip Gupta (President) and Hemambika R. Priya (Technical Member) affirmed the Order-in-Appeal, dismissing the appeal. The service tax demand of Rs. 4,96,013, along with equal penalties and additional penalties, was upheld.

The Tribunal concluded that the appellant’s claim of no AC facility was unsubstantiated, and the extended period of limitation was correctly invoked due to suppression and misrepresentation with the intent to evade service tax.

CESTAT Rules L&T’s Wheel Loaders Classifiable as ‘Front-End Shovel Loaders’, Quashes Extended Period Demand

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that wheel loaders imported by Larsen & Toubro Limited (L&T) are classifiable under “Front-End Shovel Loaders” and not under the category claimed by the company as “Other” machines used in mining.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) observed that the machines were self-propelled loaders with front-mounted buckets used to pick up and transport materials and that the end use in mining did not alter their classification. The tribunal explained that the correct classification of the goods is under Tariff Item 8429 5100.

The tribunal found merit in the appellant’s argument that there was no suppression for an extended period. The appeal was partly allowed, with the tribunal sustaining the classification under “Front-End Shovel Loaders” but granting relief to L&T by quashing the extended period demand, fine, and penalties.

Relevant Date for Export Duty is Date of Let Export Order, Not Loading Date: CESTAT in Bharat Mines Case

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the relevant date for determining the rate of export duty is the date on which the Let Export Order (LEO) is issued by the proper officer and not the date when the loading of goods begins.

The two-member bench comprising Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) observed that under Section 16(1)(a) read with Section 51 of the Customs Act, the applicable rate of duty must be determined based on the date of the LEO, which is the date the proper officer permits clearance and loading of goods for export.

The tribunal explained that the date of actual loading is not relevant for determining the duty rate. The tribunal pointed out that in this case, the LEO was granted on 09.06.2008, before the new notification took effect on 13.06.2008, and the revised rate could not apply.

Proceedings Against Deceased Proprietor 'Void Ab Initio': CESTAT Quashes Service Tax Demand

The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed an appeal, holding that tax assessment proceedings abate upon the death of a sole proprietor, and any order passed thereafter is 'void ab initio'.

The bench, comprising Ms. Binu Tamta (Judicial Member) and Ms.Hemambika R. Priya (Technical Member), agreed with the appellant. The Tribunal followed the principle laid down in Shabina Abraham, which held that an 'assessee' is the person liable to pay duty, and in the absence of a specific legal mechanism, proceedings cannot be continued against the legal heirs of a deceased sole proprietor.

CESTAT Sets aside Service Tax Demand on Contractor, Citing 'Bona Fide Belief' to Bar Extended Period

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed an appeal, holding that the invocation of the extended period of limitation was not justified as the appellant acted under a 'bona fide belief' of non-liability.

The CESTAT bench, comprising Mr. S. S. Garg (Judicial Member) and Mr. P. Anjani Kumar (Technical Member), sided with the appellant on the issue of limitation. The Tribunal held that the appellant, a small contractor, could not be compared to a large corporate entity and that the communication from HSWC created a 'bona fide belief' regarding taxability. It rejected the Revenue's argument that the appellant's non-cooperation justified the delay, stating the department could have used its own powers to obtain information.

Refund Claims for Unconstitutional Levies must be made in Civil Court: CESTAT Rejects Appeal, Citing Unjust Enrichment from ITC

The Chennai Regional Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that refund claims for levies later declared unconstitutional must be pursued in a civil court or writ petition, not under the statutory provisions of the Act. The tribunal further ruled that the appellant had failed to prove it had not been unjustly enriched by availing the tax amount as Input Tax Credit (ITC).

Further stated that the burden of proof lies solely with the appellant to demonstrate that the tax burden was not passed on. The tribunal found that the appellant's mere reversal of the ITC after the adjudication was insufficient proof, noting that the credit had been utilized and the appellant failed to provide the meticulous accounting required to establish non-utilization.

Consequently, the tribunal held that the appeal was not maintainable before it and that the appellant had failed to cross the bar of unjust enrichment. Finding no merit in the appeal, CESTAT rejected it.

Reliance on Form 26AS Insufficient & Notice Time-Barred: CESTAT sets aside Service Tax Demand

The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed an appeal, setting aside a service tax demand by holding that reliance on Form 26AS was insufficient to prove the levy and that the notice was barred by limitation.

The two member bench of Dr. Rachna Gupta (Judicial Member), held that the burden of proof lies on the Revenue to establish tax liability, especially in cases of ambiguity. Relying on Supreme Court decisions in Jai Prakash Industries Ltd.and Dilip Kumar & Company the tribunal found that the department had failed to discharge this burden. It noted that Form 26AS did not support the department's allegation of commission income, as no TDS was reflected. The tribunal also accepted the appellant's claim of providing catering services, which would be eligible for abatement.

Claim for 12% Interest on Service Tax Refund: CESTAT Upholds 6% Interest

The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed an appeal, upholding that interest on a service tax refund paid under protest during investigation should be granted at 6%, not the claimed 12%.

The two member bench of Dr. Rachna Gupta (Judicial Member), first affirmed that an amount paid 'under protest during investigation' is indeed in the nature of a pre-deposit. However, on the question of the interest rate, the tribunal held that the relevant provision, Section 35FF of the Central Excise Act, is 'plain and unambiguous'. It noted that a government notification (No. 24/2014-CE) had fixed the rate at 6% per annum.

Relief for Blue Star: CESTAT Rules Centralized Air-Conditioning Systems Qualify for Higher Abatement

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that centralized air-conditioning systems installed at sites form part of immovable property and qualify for a higher abatement of 60% under the Service Tax (Determination of Value) Rules, 2006.

The two-member bench comprising Mr. P.A. Augustian (Judicial) and Mrs. R. Bhagya Devi (Technical) observed that centralized air-conditioning systems, being permanently fixed and non-removable without damage, are immovable property.

The tribunal referenced CBEC Circular No. 58/1/2002-CX and explained that such systems cannot be treated as movable goods and held the appellant eligible for 60% abatement under Notification No. 24/2012-ST. The demand on this count was set aside.

CESTAT Allows CENVAT Credit on Service Tax Paid for Construction Services as Exclusion Applied Only from April 1, 2011

The Bangalore Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) allowed CENVAT credit on service tax paid for construction services, holding that the exclusion of such services from the definition of ‘input service’ under Rule 2(l) of the CENVAT Credit Rules, 2004, applied only from April 1, 2011.

The two member bench comprising D.M.Misra (Judicial Member) and Pullela Nageswara Rao (Technical Member) considered submissions from both sides and reviewed the records. It noted that the dispute centred on whether CENVAT credit on service tax paid for construction services during November 2010 to May 2011 was admissible.

It found that before April 1, 2011, construction services were not excluded from the definition of input service under the CENVAT Credit Rules, 2004. Since most of the demand related to this period, the Tribunal held that denial of credit for services availed before the amendment was not justified.

Rent to Foreign Government Office Taxable Without MEA Certificate: CESTAT Confirms Service Tax Demand

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that renting property to a foreign government office is taxable unless the assessee produces a certificate from the Ministry of External Affairs (MEA) as required under Notification No. 33/2007-ST dated 23 May 2007.

The tribunal referred to the Supreme Court’s judgment in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Co. and explained that tax exemption notifications must be interpreted strictly, and benefits cannot be granted without compliance with their conditions. The tribunal pointed out that the property was rented for business purposes and the service was taxable under the law.

Restaurant Services Provided in Non-Air-Conditioned Premises Remain Exempt under Mega Exemption Notification: CESTAT

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that restaurant services provided in non-air-conditioned premises are exempt from service tax under Mega Exemption Notification No. 25/2012-ST and that service tax demands raised solely on the basis of Form 26AS data are unsustainable.

The single-member bench comprising Mr. P.K. Choudhary (Judicial Member) observed that the department had issued the demand merely based on Form 26AS data without confirming the nature of receipts. It explained that not all entries in Form 26AS represent taxable income and pointed out that non-air-conditioned restaurant services are specifically exempt.

Holding the demand unsustainable, the CESTAT also ruled that there was no suppression or intent to evade tax. The appeal was allowed, and the demand, interest, and penalties were set aside.

Rajasthan State Road Transport Corp Not Liable for Service Tax on Display of Govt Advertisements on Buses : CESTAT

The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) observed that the appellant, being a government-owned transport undertaking, was not liable to pay service tax on the amount received from the State Government for displaying official advertisements on its buses.

The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and A.K. Jyotishi (Technical Member) observed that RSRTC’s role was limited to displaying government messages on its buses and did not amount to providing advertisement services. The bench pointed out that similar issues had already been decided in RSRTC’s favour in earlier cases and that the department’s invocation of the extended limitation period was unjustified.

CESTAT Questions Denial of CENVAT Credit on Inox Air’s Evaporative Loss of Liquid Gases During Transit, Remands Matter

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) observed that the denial of CENVAT credit on account of evaporative loss of liquid gases during transit required fresh examination and remanded the matter to the adjudicating authority for reconsideration.

The two-member bench comprising Vasa Seshagiri Rao (Technical Member) and one accompanying Member observed that the issue was identical to one previously decided in the appellant’s earlier appeal, where the matter was remanded for verification of scientific and documentary evidence explaining the loss.

The tribunal pointed out that the lower authorities had not examined the appellant’s explanation regarding temperature variation and weighing scale differences. The tribunal explained that the issue should be reconsidered in line with its earlier decision and that a consistent approach was necessary.

CESTAT Orders Fresh Verification of BSNL Chennai Telephones’ CENVAT Credit Based on Chartered Accountant’s Certificate

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) observed that the CENVAT credit claimed by BSNL Chennai Telephones required fresh verification and remanded the matter to the adjudicating authority for reconsideration based on a Chartered Accountant’s certificate.

The two-member bench comprising M. Ajit Kumar (Technical Member) and Ajayan T.V. (Judicial Member) pointed out that since the appellant is a public sector unit, an opportunity should be given to verify the evidence and examine the claim afresh.

The tribunal explained that the adjudicating authority should review the issue after considering the Chartered Accountant’s certificate and any other written or oral submissions made by the appellant.

Exempted Supplies made to ICB-based Petroleum Project: CESTAT quashes ₹87 Lakh Excise Demand

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed an excise duty demand of ₹87,71,656 against appellant, ruling that subcontractors supplying goods to contractors executing projects awarded through International Competitive Bidding (ICB) are also entitled to exemption.

The Tribunal, comprising of Angad Prasad (Judicial Member) and A.K. Jyotishi (Technical Member), observed that the purchase orders and Project Authority Certificates demonstrated that the supplies were indeed related to ICB-awarded petroleum projects. They also noted a letter from the Director General of Hydrocarbons, under RTI, confirming that blocks in the KG basin were allotted via ICB under the NELP policy.

It was found that the documents adduced by the appellant were sufficient enough to indicate that these materials were intended for use only in connection with the activity for which the work was awarded through ICB route. “In the facts of the case, we find there is no dispute that the appellant, as a sub-contractor, is eligible to supply materials towards a project allotted under ICB,” the Bench stated.

No Service Tax on Army Housing Projects before 01. 07.2010: CESTAT Grants Partial Relief to Sub-Contractor under Finance Act

In a recent ruling, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax is not leviable on the construction of residential quarters for Military Engineering Services (MES) prior to July 1, 2010, extending significant relief to the appellant.

The CESTAT bench, comprising of Angad Prasad (Judicial Member) and A.K. Jyotishi (Technical Member), held that no service tax is applicable for the said period. For the period thereafter, the Tribunal acknowledged that the appellant, being a sub-contractor, may be liable to pay tax but observed that there was no intent to evade tax, and therefore, the penalty under Section 78 was unwarranted.

Accordingly, the Tribunal partly allowed the appeal, deleting the demand and penalty for the earlier period and remanding the matter back for re-quantification of liability for the remaining period, if any, in accordance with law.

Service Provided to Foreign Airline Amounts to Export of Service under Finance Act: CESTAT Quashes Service Tax Demand

Translanka Air Travels (P)Ltd vs Commissioner of GST and Central Excise CITATION : 2025 TAXSCAN (CESTAT) 1193

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the overriding commission received by a General Sales Agent (GSA) from a foreign airline in convertible foreign exchange amounts to export of service and is not liable to service tax.

The Tribunal, comprising of Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member), agreed with the appellant’s submissions and noted that in the appellant’s own earlier cases, the same issue had been settled in its favour. It was further noted that the show cause notice reveals in para 14 that in the GSA agreement there is no specific clause about payment of any amount as Contract Fees for any specific purposes.

No Service Tax on Reimbursable Expenses or Crane and Forklift Hire Prior to 16.05.2008: CESTAT Allows Appeal under Finance Act

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has ruled in favour of appellant holding that reimbursable expenses and charges for crane/forklift hire cannot be included in the service tax valuation for the period 2006–2009. The Tribunal also set aside all penalties imposed under Sections 76, 77, and 78 of the Finance Act, 1994.

The Tribunal bench comprising Member (Judicial) A. Ramachandran and Member (Technical) K. V. Balamurugan observed that Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, which allowed inclusion of such costs, was struck down by the Delhi High Court and later upheld by the Supreme Court. Therefore, the Department’s demand for service tax on these expenses was unsustainable.

Regarding crane and forklift charges, the Tribunal noted that these services did not constitute Business Support Services prior to 16.05.2008, citing earlier CESTAT and High Court rulings. Consequently, the Tribunal allowed the appeals and quashed all associated penalties, emphasizing that the Department cannot levy tax or penalties based on incorrect service classification.

Penalty on Co-Noticee u/s 112(a) of Customs Act Set Aside by CESTAT: Mere Classification Dispute Not Grounds for Confiscation

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside a penalty of ₹1 lakh imposed on appellant under Section 112(a) of the Customs Act, 1962, holding that no penalty can be imposed on a co-noticee when the primary noticee has been exonerated.

The importer had already challenged the same order before the Tribunal in Customs Appeal, wherein the Tribunal, vide Final Order dated October 10, 2019, set aside the penalty imposed on the importer. The Tribunal held that the case involved an erroneous classification rather than any deliberate misdeclaration, and therefore confiscation under Section 111 and penalty under Section 112(a) were not sustainable.

Referring to that judgment, the Tribunal observed: “The fact that the goods correspond to declaration in respect of the description and value is sufficient to take the imported goods away from the application of these two clauses.”

Mere Procedural Lapse Not Penal Offence in Excess Customs Duty Drawback Claim: CESTAT Quashes Penalty u/s 114 & 114AA

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bench at Chennai has set aside penalties imposed on appellant and its Managing Director for allegedly availing excess duty drawback by understating freight charges in export shipping bills.

The Tribunal, presided by Vasa Seshagiri Rao (Technical Member), observed that declaring average freight in such cases was in accordance with the Board’s Circular. It was noted that while the appellants failed to review and rectify the freight declaration post-export, such lapse did not amount to misdeclaration. The Tribunal found no evidence of intentional wrongdoing or personal involvement of the Managing Director.

Accordingly, the CESTAT held that the penalties under Sections 114 and 114AA were unsustainable and ordered them to be set aside, while upholding the recovery of excess drawback and interest already paid.

No Service Tax without Proper Categorisation of Services: CESTAT Quashes Demands against HIMUDA for Vagueness and Lack of Specific Classification

The Bench, comprising Justice S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member), observed that the department had issued show cause notices listing multiple services without identifying the specific taxable category for each receipt.

The Tribunal observed that vague notices lacking detailed allegations deprive the assessee of a fair opportunity to defend and are therefore unsustainable. The appellate tribunal followed its recent rulings in Shri K. Mayakrishnan v. CCE, Puducherry and TMP Manoharan & Co. v. CCE, Puducherry, holding that a demand raised without precise service classification cannot be enforced.

CENVAT Credit Denied on Endorsed Bills of Entry without Hearing: CESTAT Remands Matter to Assistant Commissioner

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has remanded a matter back to the Assistant Commissioner after finding that CENVAT credit was denied on endorsed Bills of Entry without granting a hearing to the assessee, violating principles of natural justice.

The Tribunal, comprising Judicial Member P. Dinesha and Technical Member M. Ajit Kumar, observed that the Assistant Commissioner’s letter effectively denied CENVAT credit, making the appeal maintainable.

The Bench criticized both lower authorities for failing to afford the appellant a fair hearing or to examine the case on merits, terming the omission a “serious lapse resulting in miscarriage of justice.”

The CESTAT noted that the Commissioner (Appeals) should have either remanded the matter or sought a report instead of deciding the issue substantively without factual verification.

No Service Tax on Book Reversal Entries, Security and Electricity Deposits u/s Section 67 of Finance Act: CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bench at Chennai, has ruled in favour of appellant., quashing a service tax demand of ₹8.83 lakh raised by the Revenue. The demand pertained to amounts accounted as miscellaneous income due to reversal of prior year expenses, which the appellant contended were not related to renting of immovable property services.

The two-member bench comprising P. Dinesha, Member (Judicial) and Vasa Seshagiri Rao, Member (Technical), observed that the amounts in question were refundable electricity deposits and security deposits taken from tenants for potential damages. These were not received as consideration for renting immovable property.

The Tribunal relied on earlier rulings, including Team HR Services Pvt. Ltd. v. Commissioner of Central GST and VITP Pvt. Ltd. v. Commissioner of Central Tax, which held that refundable security deposits do not attract service tax. It also noted that the issue of taxability of renting immovable property was interpretative in nature and had attained finality only after the Delhi High Court’s ruling in Home Solutions Retail India Ltd. Consequently, the extended period of limitation could not be invoked.