The Tribunal stated that the Chapter 9 defines "spice" as products mainly used as condiments. The chemically treated Chilly Seeds are poisonous, unfit for human consumption, used solely for sowing, and labeled "TREATED WITH POISON - DO NOT USE FOR FOOD." They require permits under the Seeds Act, 1996, unlike food products requiring FSSAI compliance. Hence, they cannot be classified as spices under Chapter 9. The seeds merit classification under CTH 1209 as seeds for sowing, supported by Board Circular No. 03/2002-Cus.

License Condition "Subject to Notification" Not a Mandatory Payment Clause: CESTAT Quashes Customs Duty Demand on Gold Dore Bars

M/s. NarrondassManordass vs Principal Commissioner of Customs ACC (Import)

CITATION : 2026 TAXSCAN (CESTAT) 126

The Principal Bench ofCustoms, Excise & Service Tax Appellate Tribunal (CESTAT) at New Delhi, held that a licence condition stating imports were “subject to” a notification did not mandate duty payment or bar other exemptions. It quashed customs duty demand where the importer claimed NIL duty under the LDC exemption instead of a concessional rate in the DGFT licence. Thus, the Tribunal clarified that the phrase only indicates compliance and does not prohibit availing more beneficial exemptions.

The Tribunal declared the Customs duty demand and penalty under Section 112(a)(i) of the Customs Act, 1962, were unsustainable, set aside the impugned order and allowed the appeal filed. The Order was Pronounced on 07.01.2026.

Works Contract & Maintenance Services provided to NEEPCO for Power Generation Exempt from Service Tax: CESTAT

M/s. Amal Debnathvs Commissioner of C.G.S.T. and Central Excise

CITATION : 2026 TAXSCAN (CESTAT) 128

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata held that works contract and maintenance-related services provided to North Eastern Electric Power Corporation Limited (NEEPCO) are exempted from service tax.

The tribunal, noting the decision in Dhar Brothers Construction Company Pvt. Ltd., held that the services provided in relation to electricity generation/transmission were exempt during the entire relevant period under the applicable notifications.

Service Tax Demand Based Only on Income Tax Data without Verification and Corroborative Evidence Unsustainable: CESTAT

M/s. Roshan KumarBajaj vs Commissioner of CGST & Central Excise, Ranchi

CITATION : 2026 TAXSCAN (CESTAT) 129

In a recent ruling, the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Kolkata held that a service tax demand raised solely on the basis of third-party information received from the Income Tax Department, without proper investigation or corroborative evidence cannot be sustained.

The Tribunal further held that when the Department itself was uncertain about the correct classification of the service, invocation of the extended period was not required.

IEC Alert Active when OIO Passed: CESTAT Orders Reconsideration of Double Customs Duty Refund Claim

Prima Chemicals vsCommissioner of Customs (NS-III)

CITATION : 2026 TAXSCAN (CESTAT) 131

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Mumbai, with regards to the matter of customs duty paid twice on the same container, ordered reconsideration of the refund claim.

The appellant was directed to produce all relevant documents in support of the claim. The appeal was allowed.

Mere ITR Disclosure Cannot Trigger Service Tax Levy without Identifying Service & Recipient: CESTAT

Qaidjohar HusainiJawadwala vs Commissioner of CGST & Central Excise

CITATION : 2026 TAXSCAN (CESTAT) 132

The Mumbai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT), held that mere disclosure of turnover/income in an Income Tax Return ( ITR ) cannot automatically lead to Service Tax liability without identifying the nature of taxable service and recipient.

The tribunal stated that it neither specifies the taxable service provided by the appellant nor identifies the recipient of such service. In the absence of these fundamental aspects, the demand is not sustainable. It also referred to the matter of the same tribunal in Sarosh Homi Forbes v. Commissioner of CGST, Mumbai, in which the demand raised on the basis of Income Tax Returns was set aside by holding that a demand raised on the basis of third-party data without identifying the taxable service and its recipient, is unsustainable in law.

Penalty on alleged Individual Conspirator does not Stand after Demand & Penalty against Main Firm quashed: CESTAT

Basant PerumalMakhija vs Principal Commissioner

CITATION : 2026 TAXSCAN (CESTAT) 133

The New Delhi bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that once the demand and penalty against the main tobacco manufacturer were set aside, the penalty imposed on an alleged individual conspirator linked to the same allegations cannot survive.

With regards to the penalty under Section 29, the appellate tribunal said that “Penalty under rule 29 of the 2017 Rules can be imposed on a person who is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in an any other manner deals with any excisable goods which he knows or has reason to believe are liable to confiscation under the Central Excise Act … The penal provisions have to be interpreted strictly and in the absence of any evidence on record to show involvement of the appellant in the activity of Ashish Enterprises, no penalty can also be imposed upon the appellant” , said the bench.

Six-Month Procedural Limitation Under Service Tax Notification cannot be Pressed to Deny SEZ Refund: CESTAT in Renault Nissan Case

Renault NissanTechnology And Business Centre India Pvt. Ltd. vs Commissioner of GST & CE

CITATION : 2026 TAXSCAN (CESTAT) 134

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the six-month time limit under Notification No. 9/2009-ST cannot be pressed to deny refund of service tax to a Special Economic Zone(SEZ) unit when the substantive exemption flows from the SEZ Act.

The tribunal observed that if the six-month limitation under the notification is treated as absolute, the exemption under the SEZ Act would fail, which is not permissible in law. The tribunal pointed out that Section 11B of the CentralExcise Act is a beneficial provision and its one-year limitation period applies to refund claims by SEZ units. The tribunal set aside the impugned orders and allowed all the appeals with consequential benefits as per law.

Smuggling of Undeclared Memory Cards Concealed in Imported Metal Clips: CESTAT Upholds Penalty and Confiscation of Goods Against Importers

MAHENDER PAL SINGHvs COMMISSIONER OF CUSTOMS

CITATION : 2026 TAXSCAN (CESTAT) 135

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upholds the penalty given to father and son who had a shop for selling memory cards. The goods smuggled included memory cards and adaptors which were concealed in imported metal clips. The confiscation of goods ordered by the Director of Revenue Intelligence (DRI) was also held valid.

The bench, comprising Justice Dilip Gupta (President) and P. V. Subba Rao (Technical), also observed that the compliance with Section 14 of the Act read with Customs Valuation Rules, 1988 allows re-determination of transfer value. Finally, Sections 114A, 111(f), (ii), (l) and (m) were held to be correctly imposed for the confiscation of the imported goods.

Dummy Shipping bill used Only for Charges Calculation, No evidence of Fraud: CESTAT Sets aside Penalties on CONCOR CFS & Officials

M/s CONCOR CFS vsPrincipal Commissioner of Customs, Noida

CITATION : 2026 TAXSCAN (CESTAT) 136

The Allahabad bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) set aside penalties imposed on generation of a dummy shipping bill finding that it was made for internal calculation of dues and charges and not for any fraud.

“In the present case, there is no evidence on record that the dummy export application or dummy shipping bill were used for any purposes in the transaction of any business under the Act. At any rate, Section 114AA can be invoked only against the fraudulent exports as per the 27th report of the Standing Committee on Finance and the Appellants, not a fraudulent exporter, no penalty under Section 114AA can be imposed on the Appellants” said the bench.

Customs Duty Drawback Recoverable where Sale Proceeds Not Realised, Mere Receipt of Remittance Not Sufficient: CESTAT

B.A. Internationalvs Commissioner of Customs

CITATION : 2026 TAXSCAN (CESTAT) 137

The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal held that customs duty drawbacks are recoverable when sale proceeds are not realised correctly or have not been followed through properly and that mere receipt of remittance is not sufficient to avail the benefit of drawback.

The two member bench comprising Justice DilipGupta (President) and P. V. Subba Rao (Technical) held that the remittances were from persons not connected with the garments exported. The bench further held that as per Rule 16A of the Drawback Rules, the sale proceeds have to be realised and not any remittance would count. Since the purported buyer was not even from the same country in some cases, it is not possible to accept any remittance as the sale proceeds of the goods. Therefore, the tribunal held that recovery of drawback needs to be sustained as there is no prescribed time limit to recover it. However, the penalty under section 114 has been set aside.

Revenue must pay Interest on Pre-Deposit From Date of Deposit Till Refund: CESTAT Orders 12% Interest

Patel LabourContractors Pvt Limited vs Commissioner of Central Excise

CITATION : 2026 TAXSCAN (CESTAT) 138

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ),Ahmedabad held that when an assessee’s pre-deposit is refunded after the appeal succeeds, the Revenue is liable to pay interest from the date of deposit till the date of refund.

CESTAT allowed the appeal. It directed the Department to provide interest at 12% on the pre-deposit amount from the date of deposit till refund.

The appellate tribunal observed that when the rules itself fix the maximum penalty, imposing that maximum amount cannot be treated as inadequate or “not commensurate”. It was also noted that the Regulations do not provide for forfeiture of security deposit in the manner sought by the Department. Accordingly, the appeal was dismissed.

Importer Shifts address without Intimation, Returned Postal Covers: CESTAT Calls Conduct Not Bona Fide, Declines Relief

Mr. P.R. Elamuruguvs The Commissioner of Customs

CITATION : 2026 TAXSCAN (CESTAT) 140

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Chennai, has ruled that an importer cannot later use non-service of orders as a basis for seeking relief if he moved his company address without notifying Customs and made sure that postal covers were returned undelivered.

CESTAT observed that “The Appellant has not only vacated / changed its address, even not bothered to intimate the same to the Revenue, but has also instructed that postal letters to be returned, which is clearly after obtaining the release of the goods, which clearly shows that he did not come with clean hands.”

SSI Exemption Denied without Proof of Third-Party Brand Ownership: CESTAT Sets Aside Excise Duty Demand

Aashish Enterprisesvs Commissioner of GST

CITATION : 2026 TAXSCAN (CESTAT) 141

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside an excise duty demand, holding that SSI exemption cannot be denied in the absence of evidence that the brand name used indicates a connection with another person or mark is demonstrably the brand of a third party.

Blasting Services for Digging Wells for Farmers Qualify as Agricultural Services: CESTAT Sets Aside Tax Demand

Shri Narayan Lal vsCommissioner

CITATION : 2026 TAXSCAN (CESTAT) 142

The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that blasting services used for digging wells for farmers qualify as agricultural services.

The tribunal pointed out that the department failed to link the alleged differences in accounts to any specific taxable service. In the absence of such identification and analysis, the demand lacked legal basis. On this reasoning, the CESTAT set aside the service tax demand raised solely on the basis of accounting differences and allowed the appeal in favour of the appellant.