CESTAT Weekly Round-up

No Service Tax on Blasting & Quarrying for Road Works: CESTAT says Registration not required when No Tax Payable

Balaji Traders vsCommissioner, CGST & Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 145

Blasting, quarrying and allied activities conducted for road construction are not liable to Service Tax, held by the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), New Delhi bench. Where no tax is payable due to exemption, the appellant/assessee cannot be compelled to obtain service tax registration or file returns, said the tribunal.

The tribunal observed that "In the light of 46th amendment, any service in the nature of works which involves utilization of goods is classifiable only as works contract service and that the transfer of goods in such contract has to be considered as the deemed sale.” Accordingly, the Tribunal set aside a service tax demand of ₹2.68 crore raised against the assessee for the period October 2012 to March 2017. The appeal was allowed accordingly.

Customs Fails to Disclose Method Adopted to Redetermine Confiscated Goods Value: CESTAT Remands Matter for Revaluation

M/s. GyanguruEnterprises vs Commissioner of customs

CITATION: 2026 TAXSCAN (CESTAT) 146

The Customs, Excise and Services Tax Appellate Tribunal (“CESTAT”) notes that the customs department has failed to disclose the method adopted to redetermine the value of confiscated imported goods. When appeal against the order dated 04.01.2022 of the Commissioner of Customs, the Tribunal remanded the matter for re-valuation.

The tribunal decided that the matter should be remanded back for proper re-valuation of duty, interest and penalty. It noted that principles of natural justice should be followed and reasonable opportunity is to be given to the appellant to state their case, both orally and in writing.

Refund arises out of Excise Duty Demand Deletion must be Claimed through Separate Statutory Procedure, Not Before Tribunal: CESTAT

Jeevan Diesels &Electricals Ltd vs The Commissioner of GST Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 147

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that refund issues arising out of the deletion of excise duty demand must be claimed through a separate statutory procedure and the same cannot be claimed or appealed for before the tribunal.

The tribunal observed that any refund claim arising as a consequence of an order must be pursued through separate proceedings. It added that CESTAT cannot go into the issue of the refund. The tribunal did not see any justification for entertaining this appeal. The appeal of the appellant was dismissed.

Arm-Blade Assembly without Motor Classified as Parts, Not Complete Wiper: CESTAT

Mitsuba Sical IndiaPvt. Ltd. vs Commissioner of Customs

CITATION: 2026 TAXSCAN (CESTAT) 148

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai held that the arm-blade assembly without the motor was classifiable as ‘part’ under CTH 85129000, not a complete wiper under CTH 85124000.

It was held that Rule 2(a) cannot be applied as it can apply only in those cases where an incomplete article substantially represents the complete article. Since there is no complete article, due to the absence of a motor, the Rule is inapplicable.

‘Amazon Internet Services Not An ‘Intermediary’: CESTAT Quashes Service Tax Demand on Data Hosting Services

M/s. Amazon Internet Services Pvt.Ltd. vs Commissioner ofCGST (East)

CITATION : 2026 TAXSCAN (CESTAT) 149

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that Amazon Web Services’ India arm is not an “intermediary” and set aside service tax demands raised on data hosting services provided to its overseas group entity.

The tribunal set aside the service tax demand, interest, and penalty on data hosting services. The issue of penalty on marketing services was remanded for limited verification. The appeal was partly allowed.

CESTAT Reduces Customs Penalty to ₹5,000 Considering Demise of Importer’s Wife

Shri Mallesh Cheekotivs Commissioner of Customs

CITATION: 2026 TAXSCAN (CESTAT) 150

The Customs, Excise and Service Tax Appellate Tribunal, Chennai Bench (CESTAT), reduced the penalty imposed under the Customs Act, 1962, after considering the personal hardship faced by the importer and the absence of deliberate violation of law.

The Tribunal accepted the appellant’s request not to redeem the vehicle and waived the redemption fine. Considering the penalty imposed under Section 112(a) of the Customs Act, 1962, the Bench held that although a technical violation existed, the facts of the case justified leniency. Considering the humanitarian aspect and absence of mala fide intent, the Tribunal reduced the penalty from ₹25,000 to ₹5,000.

Buyer’s Premises as ‘Place of Removal’: CESTAT Reaffirms CENVAT Credit Eligibility on GTA Services in Ramco Cements Case

M/s. Madras CementsLimited vs Commissioner of GST and Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 151

The Customs, Excise and Service Tax Appellate Tribunal of Chennai Bench (CESTAT) reaffirmed that outward freight qualifies for credit when ownership and risk pass at the buyer’s premises, constituting the expression “place of removal” under the Central Excise Act, 1944, and the eligibility of Goods Transport Agency (GAT) services as “input service” under the CENVAT Credit Rules, 2004.

In the light of failure of adjudicating authority in examining the contractual documents and sale terms to determine the correct place of removal, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for limited factual verification regarding the nature of contracts, transfer of ownership, and inclusion of freight in the sale price. Further, the authority was directed to re-adjudicate the matter strictly in accordance with settled legal principles.

Mahatma Gandhi University Eligible for ₹1.47 Cr Service Tax Refund on Legal, Security, Manpower & Works Contract Services: CESTAT

Mahatama Gandhi University of Medical Sciences AndTechnology vs Commissioner of Central Goods, Service Tax, Central Excise,Jaipur-I

CITATION: 2026 TAXSCAN (CESTAT) 152

The Customs, Excise, Service Tax Appellate Tribunal ( CESTAT ), Jaipur has ruled that Mahatma Gandhi University of Medical Science and Technology is not a body corporate and directed the refund of ₹1,47,62,737 paid under the reverse charge mechanism.

The tribunal held that the University is eligible for a refund of ₹1.47 crore, paid under the reverse charge mechanism towards service tax on legal services, security services, manpower supply services, and works contract services, as the university is entitled to exemption under Mega Exemptions Notifications No.25/2012-St dated 20.06.2012 and is entitled to receive the full refund to the University.

Mahatma Gandhi University is ‘Non-Profit Trust as a Charitable Institute’ and not ‘Body Corporate’: CESTAT holds no Service Tax Liability under RCM

Mahatama GandhiUniversity of Medical Sciences And Technology vs Commissioner of Central Goods,Revenue Service Tax, Central Excise, Jaipur-I

CITATION: 2026 TAXSCAN (CESTAT) 152

The New Delhi bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) held Mahatma Gandhi University is not a ‘Body Corporate’ and confirmed it as “Not-Profit Trust as a Charitable Institute” that is eligible for the refund of service tax under the reverse charge mechanism (RCM),and directed the full refund of ₹1,47,62,737.

The tribunal held that the University is eligible for a refund of ₹1.47 crore, paid under the reverse charge mechanism towards service tax on legal services, security services, manpower supply services, and works contract services, as the university is entitled to exemption under Mega Exemptions Notifications No.25/2012-St dated 20.06.2012.

No Differential Excise Duty Demand on SKO Intermixed with MS & HSD in Pipeline: CESTAT sets aside Order against HPCL

Hindustan Petroleum Corporation Ltd. vs Commissioner ofCentral Excise

CITATION: 2026 TAXSCAN (CESTAT) 153

The Mumbai Bench of the Customs, Excise, Service Appellate Tribunal (CESTAT) recently set aside an impugned order passed by the Commissioner of Central Excise, demanding differential excise duty demand on Superior Kerosene Oil (SKO) intermix with Motor Spirit (MS) or High-Speed Diesel (HSD) at the rate of duty applicable with MS/HSD.

The tribunal noted that all three products (MS, HSD, and SKO) are transported in the pipeline and SKO as interface gets mixed to either MS or HSD. As per section 4 of Central Excise Act,1944, the excise duty is to be payable on the transaction value at the time of removal of goods in the factory. Therefore, the Tribunal allowed the appeal and quashed the duty demanded at the rates applicable to MS or HSD as unsustainable.

Service Tax Exemption Not Automatic for SEZ Supplies, Authorised Operations Proof Mandatory: CESTAT

Trishaa Rose Garden vsCommissioner of GST

CITATION: 2026 TAXSCAN (CESTAT) 154

The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that service tax exemption for services supplied to SEZ (Special Economic Zone) units/developers is not automatic, and can be claimed only when the service provider proves that the services were used for “authorised operations” under SEZ Act.

The tribunal held that the appellant was not entitled to service tax exemption for supplies made to SEZ units, since the mandatory approval/documentation requirements were not met. The exemption claim was rejected.

Landscaping & Garden Maintenance Taxable as ‘Management, Maintenance or Repair Service’: CESTAT upholds Service Tax Demand

Trishaa Rose Garden vsCommissioner of GST and Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 154

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Chennai held that the service of landscaping and garden maintenance activities comes under “Management, Maintenance or Repair Service”, therefore attracts service tax.

The appellate tribunal held that the activities are correctly classifiable as taxable “management, maintenance or repair service”.

Article 243W Does not Grant Tax Immunity to Private Contractors: CESTAT confirms Service Tax on Park & Garden Maintenance

M/s. Trishaa RoseGarden Pvt. Ltd vs Commissioner of GST and Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 154

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Chennai held that Article 243W of the Constitution does not grant tax immunity to private contractors executing outsourced municipal functions.

The tribunal held that services provided by the appellant to the Coimbatore Municipal Corporation cannot be treated as sovereign functions and cannot escape from levy of service tax. Therefore, service tax is leviable.

Windmills Not Immovable Property: CESTAT Quashes Service Tax Demand on Sundaram Fasteners

Sundaram Fasteners Ltd.vs Commissioner of GST & Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 155

The Customs, Excise and Service Tax Appellate Tribunal, Chennai Bench (CESTAT), set aside the service tax demand raised on the leasing of windmills, holding that windmills do not qualify as immovable property and therefore cannot be subjected to service tax under the category of renting of immovable property under the Finance Act, 1994.

The CESTAT ruled that leasing of windmills does not attract service tax under the category of renting of immovable property and set aside the entire demand along with penalties.

No Service Tax Leviable on Foreign Logistics Services: CESTAT

Sundaram Fasteners Ltd. vs Commissioner of GST &Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 155

The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that services rendered by foreign service providers outside India cannot be subjected to service tax under the reverse charge mechanism when such services are neither performed nor consumed in India.

The Tribunal decided that the demand was unsustainable in law since the Department had misapplied the provisions of the Finance Act, 1994 by attempting to tax offshore services. Accordingly, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief.

Service Tax Paid by Mistake Cannot Be Adjusted Against Future Liability: CESTAT Directs TVS Motor to Seek Refund

M/s. TVS Motor CompanyLtd vs Commissioner of GST and Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 156

The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that service tax paid by mistake cannot adjust against future service tax liability and must claimed only through statutory refund process.

The tribunal observed that appellant failed to show burden of service tax not passed on, and unjust enrichment applied. The tribunal pointed out that refund proceedings cannot be used as substituted for statutory remedies or adjustments not permitted by law. The tribunal dismiss appeal and uphold demand of service tax with interest.

Retail Visual Identity Elements are Immovable Once Installed: CESTAT Quashes Excise Duty Demand

ConsolidatedEngineering Company vs Commissioner of Central Excise, Goods & Service Tax

CITATION: 2026 TAXSCAN (CESTAT) 157

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand on Retail Visual Identity (RVI) elements as they become immovable once they are installed. These are also used in petrol pumps.

The impugned order was held not sustainable in law and was set aside on merit and limitation by the Tribunal as it allowed both appeals brought forth by the Appellant.

Residuary Entry Cannot be Applied to RVI Elements without Excluding Other Classifications: CESTAT

ConsolidatedEngineering Company vs Commissioner of Central Excise, Goods & Service Tax,Faridabad

CITATION: 2026 TAXSCAN (CESTAT) 158

The Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) held that residuary entries of classification cannot be applied without excluding other classifications. The items under scanner were Retail Visual Identity (“RVI”) Elements.

There was no finding in the impugned order to suggest that the RVI Elements were not classified under any other tariff heading so it was covered under 9405. The tribunal observed that the duty on the parts has been paid by the appellant and no further value was added to the parts.

CESTAT Rejects Raymond’s Excise Refund Claim Filed After 13 Years, Holds S. 11B Limitation Strictly Applicable to CENVAT Credit Reversal

Raymond Limited vsCommissioner of CGST & Central Excise Nashik Commissionerate

CITATION: 2026 TAXSCAN (CESTAT) 159

The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed Raymond Limited’s appeal and held that the refund claim filed after a long delay of nearly thirteen years was barred by limitation under Section 11Bof Central Excise Act, 1944.

The Tribunal further observed that the reversal of credit could not be treated as payment under mistake of law merely because subsequent decisions in other cases took a different view. It explained that refund claims based on later judicial pronouncements in other assessees’ cases cannot reopen matters that have already attained finality.

Co-Owners of Rental Property cannot be Association of Persons for Joint Service Tax Assessment: CESTAT

Naresh Gopaldas Lundand Eight Others vs Commissioner of GST & Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 160

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) recently held that co-owners of an immovable property that is rented out cannot have their respective shares be treated as an “Association of Persons” (AOP) for the purposes of conducting joint service tax assessment.

The tribunal concluded that the individual appellants are entitled to be assessed separately for Service Tax in respect of their respective shares of rental income from the property, setting aside the impugned orders passed by the Commissioners (Appeals) and allowing the appeals.

Extended Period cannot be invoked when Normal Period Demand settled on Merits: CESTAT favours IDP Education

Commissioner of CentralExcise Goods and Service Tax vs M/s.IDP Education India (P.)Ltd.

CITATION: 2026 TAXSCAN (CESTAT) 162

The New Delhi bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has dismissed the Revenue’s appeal seeking invocation of the extended period of limitation in the case of IDP Education India (P.) Ltd.

The bench of Binu Tamta (Judicial member) and Hemambika R. Priya (Technical member) held that “the issue stands decided on merits for the normal period and as a result, the present appeal filed by the Revenue limited to the invocation of the extended period does not survive.”

Cash Calls in Oil & Gas from Unincorporated Joint Ventures Not Taxable as Service: CESTAT Quashes Service Tax Demand

Oil India Limited vsCommissioner, CGST

CITATION: 2026 TAXSCAN (CESTAT) 163

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ),New Delhi (Principal Bench) held that the cash calls in oil and gas from Unincorporated joint ventures are not taxable as service as it is a cost sharing activity.

Unless the Department identifies a specific activity rendered by one party to another for a clearly agreed consideration, service tax cannot be levied. The contributions made for common expenses or discharge of shared liabilities do not become taxable merely due to payment transactions, ruled the tribunal.

CESTAT upholds Service Tax Penalty on ATC Logistics for Non-Filing of ST-3 Returns, Holds Willful Suppression Established

ATC Logistics Pvt. Ltdvs Principal Commissioner of CGST & Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 164

The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Kolkata has upheld the penalty under Section 78 of the Finance Act, 1994 imposed on ATC Logistics Pvt. Ltd., holding that the revenue established the wilful suppression.

According to the tribunal, this non-filing clearly established the mala fide intention to evade tax. The non-filing came outside only after the departmental investigation. Therefore, it held that the revenue invoking demand including penalty is proper and justified.

Bona Fide Belief Bars Extended Limitation u/s 73: CESTAT Quashes ₹3.72 Lakh Service Tax Demand

M/s Stone Heights Infravs Commissioner of Central Excise & CGST, Gautam Buddha Nagar

CITATION: 2026 TAXSCAN (CESTAT) 165

The Customs, Excise and Service Tax Appellate Tribunal of Allahabad Bench (CESTAT), held that extended limitation under Section 73 of the Finance Act, 1994 cannot be invoked in the absence of suppression or wilful misstatement and here the assessee acted under a bona fide belief and all transactions were duly recorded, thereby setting aside the service tax demand confirmed against the assessee.

The Tribunal emphasized that the appellant had acted under a bona fide belief, therefore invocation of the extended period under Section 73 of the Finance Act, 1994 was not justified. Accordingly, the service tax demand of ₹3.72 lakh, along with interest and penalties, was set aside, and the appeal was allowed in favour of the assessee.

Tobacco Leaves Threshing Not Taxable under BAS: CESTAT sets aside Service Tax Demand

M/s Chebrolu Agros PvtLtd. vs Commissioner of Central Excise And Service Tax

CITATION: 2026 TAXSCAN (CESTAT) 166

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that service tax cannot be levied on threshing charges received for tobacco leaves, holding that such activity is not taxable under the category of Business Auxiliary Service (BAS). It also set aside the GTA liability.

The Tribunal set aside the entire service tax demand under both BAS and GTA categories and allowed the appeal in favour of the assessee.

Interactive Flat Panels classifiable as ADP Machines: CESTAT Sets Aside ₹34.89 Cr Customs Duty Demand

Hitevision Tech IndiaPvt. Ltd vs Commissioner of Customs

CITATION: 2026 TAXSCAN (CESTAT) 167

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside a customs duty demand of ₹34.89 crore holding that the imported Interactive Flat Panels (IFP) are correctly classifiable as Automatic Data Processing (ADP) machines under Customs Tariff Heading (CTH) 8471, and not as monitors under CTH 8528.

The impugned ‘Interactive Flat Panel’ remain classified at the 4- digit level under CTH 8471 and their parts under CTH 8473, as self- assessed. The appeal hence succeeds and the impugned order is set aside’ ruled Ajayan T V (Judicial Member) and M. Ajit Kumar (Technical member)

VAT paid on Sale of Copyright of ‘Kolangal’ Dubbed Serials: CESTAT Quashes Service Tax Demand on Ananda Vikatan

Ananda VikatanProductions Pvt. Ltd. vs Commissioner of GST & Central Excise

CITATION: 2026 TAXSCAN (CESTAT) 168

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has quashed the service tax demand raised on Ananda Vikatan Productions Pvt. Ltd. relating to the sale of copyright observing once the intangible copyright is cooped and marketed, then it qualifies as goods. Thus, VAT (Value Added Tax) attracts.

It found that the appellant had assigned exclusive rights in the dubbed serials for a perpetual period, amounting to a sale, and therefore the authority should have verified VAT payment instead of taxing the same transaction under service tax.Accordingly, the service tax demand was set aside by the tribunal.

Service Tax Exemption for Non-Commercial Govt Buildings: CESTAT Remands Matter for Fresh Verification of Documents Under Notification

M/s Shubham Electricals vs Commissioner (Appeals – I)

CITATION: 2026 TAXSCAN (CESTAT) 169

The New Delhi bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has remanded service tax matter related to works executed in non-commercial government buildings for submission of evidence.

CESTAT allowed the appeals by way of remand, sending the matter back to the Additional Commissioner with directions to give the appellant a proper opportunity to present evidence, and pass an appropriate order.

CESTAT allows Service Tax Refund for Nokia, Denial on Rent-a-Cab, Outdoor Catering & Security Services Set Aside

Nokia Solutions andNetworks India Private Limited vs Commissioner of GST and Central Excise

CITATION : 2026 TAXSCAN (CESTAT) 170

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT ) has allowed refund of service tax amounting to Rs. 46 lakhs denied to Nokia Solutions and Networks India Pvt. Ltd.

The Tribunal upheld the denial of ₹4,220, holding that invoices were not raised on the SEZ unit. Therefore the bench granted partial relief to Nokia.

Confederation Indian Industry Not Liable to Service Tax on Convention Reimbursements and MES Income: CESTAT

Confederation of IndianIndustry vs Commissioner of Central Excise and Service Tax

CITATION: 2026 TAXSCAN (CESTAT) 171

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Chandigarh held that the Confederation of Indian Industry (CII) is not liable to pay service tax on reimbursement of expenses under convention services and income earned from the Modular Employment Scheme (MES).

CESTAT set aside the service tax demand for the period 01.10.2010 to 31.03.2012, which included tax of ₹39,034 on convention expense reimbursements and ₹1,25,818 on MES income under the category of Business Auxiliary Service.

Customs Broker Not Liable for Employee’s Acts Without Mens Rea: CESTAT

M/s. Sanco Trans Ltd vsCommissioner of Customs

CITATION: 2026 TAXSCAN (CESTAT) 172

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal(CESTAT) ruled that a customs broker could not be penalised under the Customs Act for alleged fraudulent export activities carried out by its employees in the absence of evidence showing knowledge, intent, or involvement of the employer.

The Tribunal ruled that vicarious liability cannot be mechanically imposed on an employer for acts committed by employees unless it is established that such acts were committed with the knowledge, consent, or for the benefit of the employer. In the absence of any evidence showing deliberate involvement or mens rea on the appellant, the penalty could not be sustained.

CHA Violations to Be Dealt Under CHALR, Not Customs Act: CESTAT

M/s. Sanco Trans Ltd vsCommissioner of Customs

CITATION: 2026 TAXSCAN (CESTAT) 172

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal(CESTAT) ruled that procedural or professional lapses attributable to a CustomsHouse Agent (CHA) fall within the regulatory framework of the Customs House Agents Licensing Regulations, 2004 (CHALR) and not Customs Act, 1962.

The Tribunal found that the allegations against the appellant fell squarely within the scope of the licensing regulations. In the absence of any evidence showing deliberate involvement or mens rea, the penalty imposed under the Customs Act was held to be unsustainable.

CESTAT Upholds DRI’s Power to Issue SCN u/S.4 of Customs Act in Recovery of Drawback Amount

M/s. Sanco Trans Ltd vs Commissioner of Customs

CITATION: 2026 TAXSCAN (CESTAT) 172

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the Directorate of Revenue Intelligence (DRI) has jurisdiction and is empowered under Section 4 of the Customs Act, 1962 to issue show cause notices (SCN) proceedings for recovery of drawback amounts peculiarly cases involving fraudulent or erroneous grant of drawback.

The objections regarding lack of jurisdiction of the DRI were ruled to be no longer sustainable in law. Accordingly, the CESTAT upheld the validity of the SCNs issued by the DRI and rejected the challenge raised by the appellant on jurisdictional grounds.

Cost of Barrels Used at Depot Cannot Be Deducted from Sale Price of Barreled Bitumen for Excise Valuation: CESTAT in Nayara Energy Case

NAYARA ENERGY LIMITEDvs Commissioner of C.E

CITATION: 2026 TAXSCAN (CESTAT) 173

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) ruled that barrels cost used for packing Bitumen at depots cannot be deducted from sale price of barreled Bitumen for determining assessable value for payment of excise duty.

The tribunal explained that when goods are transferred to a depot for sale after clearance from the factory, valuation is required to be done under Rule 7 of the Central Excise Valuation Rules, 2000. Under this rule, the normal transaction value of goods sold from the depot must be adopted, and the cost of packing cannot be excluded.

CA Certificate on Discounts Using Actual Data Cannot Be Disregarded Without Reasoned Contradiction: CESTAT in Hawkins Case

Hawkins Cookers Limitedvs Commissioner of Central Goods & Service Tax, Ludhiana

CITATION: 2026 TAXSCAN (CESTAT) 174

The tribunal allowed the appeal and held that the Chartered Accountant certificate on discounts using actual data was valid and the corresponding discount claims could not be disallowed.

Discount Claims Cannot Be Rejected on Assumption that Octroi Not Levied in Some States: CESTAT in Hawkins Cooker Case

M/s Hawkins CookersLimited vs Commissioner of Central Goods & Service Tax, Ludhiana

CITATION: 2026 TAXSCAN (CESTAT) 174

In a recent ruling, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that discount claims cannot be rejected merely on the assumption that Octroi is not levied in some States, in the case concerning Hawkins Cookers Limited.

The tribunal allowed the appeal and held that discount claims cannot be rejected merely on the assumption that Octroi is not levied in some States.

Penalty Not Sustainable Where Service Tax Under RCM Paid Before SCN & No Intent to Evade Shown: CESTAT in Reliance Cellulose Case

Reliance Cellulose Products Ltd vs Commissioner of CentralTax Medchal

CITATION: 2026 TAXSCAN (CESTAT) 175

In a recent ruling, the Hyderabad Bench of the Customs,Excise and Service TaxAppellate Tribunal (CESTAT) held that penalty under Section 78 cannot be imposed when service tax under Reverse Charge Mechanism was paid before issue of show cause notice and there was no intention to evade tax.

The tribunal set aside the penalty imposed under Section 78 and partly allowed the appeal, while the rest of the order was upheld.

Customs cannot Demand Disproportionate Bank Guarantee for Provisional Release: CESTAT cuts 70% to 30%

SHREEJI AGRI COMMODITY PVT LTD vs ASSISTANT COMMISSIONEROF CUSTOMS

CITATION: 2026 TAXSCAN (CESTAT) 176

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad has modified the bank guarantee amounting to nearly 70% of the value of the goods, and restricted it to 30% of the differential duty.

Service Tax Dept Cannot Take Different Stand to Disallow CENVAT Credit When Refund Sanction Not Challenged: CESTAT

M/s Teg India Pvt. Ltd. vs Commissioner of Central Goodsand Service Tax

CITATION: 2026 TAXSCAN (CESTAT) 177

The Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) held that the service tax department cannot take a different stand to disallow CENVAT Credit when refund sanction had not been challenged.The Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) held that the service tax department cannot take a different stand to disallow CENVAT Credit when refund sanction had not been challenged.

No case has been made to support the view that suppression, mis-statement, mis-representation, fraud, collusion, etc. has been made, it has been held that the impugned orders cannot be sustained. The appeals were allowed by the Tribunal.

Royalty & Dead Rent Collected for Grant of Mining Leases Not Taxable as ‘Renting Of Immovable Property’: CESTAT

Mining Engineer vs Commissioner of CGST-Alwar

CITATION: 2026 TAXSCAN (CESTAT) 178

In a recent ruling, the Principal Delhi Bench of the Customs, Excise, Services TaxAppellate Tribunal (CESTAT) held that royalty and dead rent collected for grant of mining leases is not taxable as renting of immovable property service.

The tribunal set aside the impugned order and held that royalty and dead rent collected for grant of mining leases are not liable to service tax under renting of immovable property service, and allowed the appeal.

Grant of Mining Rights is Exercise of Sovereign Function, Covered Under Negative List: CESTAT

Mining Engineer vs Commissioner of CGST-Alwar

CITATION: 2026 TAXSCAN (CESTAT) 178

In a recent ruling, the Principal Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that grant of mining rights by the Government was an exercise of sovereign function and was covered under the Negative List, and hence not liable to service tax.

The tribunal holded that grant of mining rights was a sovereign function covered under the Negative List and not liable to service tax. The impugned order was set aside and the appeal was allowed.

Customs Cannot Override DGFT’s EODC: CESTAT Sets Aside Duty and Penalty on Vedanta Ltd

Vedanta Ltd vs Commissioner of Customs

CITATION: 2026 TAXSCAN (CESTAT) 179

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the duty and penalties imposed on Vedanta Ltd, holding that the customs authorities cannot override the Directorate General of Foreign Trade’s (DGFT) Export Obligation Discharge Certificate (EODC) once the same is issued.

The Tribunal categorically held that customs authorities cannot override DGFT’s certification of export obligation fulfilment. It set aside the duty demand, interest, and penalties imposed on Vedanta Ltd., allowing the appeal with consequential benefits.

CA Certification with Self Declaration Sufficient for 4% SAD Refund: CESTAT Criticises ‘Perfunctory’ Rejection

Kalpataru Power Transmission Ltd. vs Commissioner ofCustoms

CITATION: 2026 TAXSCAN (CESTAT) 180

The Chennai bench ofCustoms, Excise and Service Tax AppellateTribunal (CESTAT) ruled that CA certificate with self declaration sufficient for allowing 4% SAD ( SpecialAdditional Duty ) refund.

The appellate tribunal, noting the CBEC Circulars, said that a CharteredAccountant’scertificate coupled with a self-declaration is sufficient to establish that the burden of duty has not been passed on.

No Excise Duty on Export Goods Damaged in Transit Before Reaching Port: CESTAT Allows Toyota Kirloskar’s Appeal

M/s. Toyota Kirloskar Auto Parts Private Limited vs TheCommissioner (LTU)

CITATION: 2026 TAXSCAN (CESTAT) 181

The Bangalore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) holded that no excise duty was payable on export goods that got damaged in transit and destroyed before reaching port of export, and allowed appeal.

The tribunal observed that goods destroyed before export qualify for remission of duty. The tribunal also observed that reopening the 2008 case using extended limitation was not valid. The tribunal set aside the order and allowed the appeal with consequential relief.

Pro-Rata, Development and Erection Charges Linked to Power Transmission Not Taxable Under Service Tax: CESTAT Orders Re-computation in GETCO Appeal

Gujarat Energy TRANSMISSION Corporation Ltd vs Commissionerof CGST and Central Excise- Gandhinagar

CITATION: 2026 TAXSCAN (CESTAT) 182

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable on pro-rata charges, development charges and erection charges collected by a state electricity transmission utility in relation to transmission of electricity. The bench, thus, remanded the matter for re-computation of tax on material cost and contingency charges.

The Tribunal noted that the matter had already been remanded by the lower appellate authority for re-computation due to lack of complete data. The Bench directed the appellant to furnish necessary details before the adjudicating authority. It further directed that re-computation should be carried out.

CESTAT Denies Refund of Unutilised CENVAT Credit under Rule 5 on Factory Closure After 2012 Amendment

M/s Mann Feeds Pvt. Ltd. vs Commissioner of Central Excise& Service Tax

CITATION: 2026 TAXSCAN (CESTAT) 183

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed an appeal seeking refund of unutilised CENVAT credit, holding that there is no statutory provision allowing refund of accumulated credit on closure of a manufacturing unit after the amendment of Rule 5 of the CENVAT Credit Rules, 2004 w.e.f. April 1, 2012.

The Tribunal rejected the contention that the adjudicating authorities exceeded the scope of the show cause notice on the ground that the proposal for rejection was clearly based on Rule 5 read with Section 11B of the Act.

Actuator and Tube Connector in iMT Systems Not “Parts of Clutch”, Classifiable
Under Residual Entry: CESTAT in Hyundai Case

The Commissioner of Customs vs M/s.Hyundai Transys IndiaPrivate Limited

CITATION: 2026 TAXSCAN (CESTAT) 184

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that actuator assemblies and tube connector assemblies used in intelligent manual transmission (iMT) systems of motor vehicles cannot be classified as “parts of clutch” and are instead classifiable under the residual tariff entry covering other parts and accessories of motor vehicles.

The Tribunal ruled that the goods were correctly classifiable under CTI 8708 9900 as “other parts and accessories” of motor vehicles. Consequently, it set aside the proposals for confiscation, redemption fine and penalties.

CESTAT Sets Aside Rs.57.96 Lakh Demand in Bharat Sanchar Nigam Ltd. Appeal, Holds CENVAT Credit on Telecom Towers and Pre-fabricated Buildings Cannot Be Denied

Bharat Sanchar Nigam Ltd vs Commissioner of Central Goods& Service Tax

CITATION: 2026 TAXSCAN (CESTAT) 185

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has held that CENVAT credit on telecom towers and pre-fabricated buildings used for providing mobile services is admissible, in line with settled precedent by the Supreme Court. The appeal filed by Bharat Sanchar Nigam Ltd (BSNL) was thus allowed.

In view of the binding precedent of the Supreme Court and the settled position of law, the Tribunal held that the denial of CENVAT credit was unsustainable. Accordingly, the appeal filed by BSNL was allowed.

Service Tax Demand on Amount Received for Modernisation and Upgradation of Sugar Mills Found Unsustainable: CESTAT Allows Appeal

M/s Nawanshahr Cooperative Sugar Mills vs Commissioner ofCentral Excise

CITATION: 2026 TAXSCAN (CESTAT) 186

The Chandigarh Bench of the Customs, Exciseand Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand raised under the category of Renting of Immovable Property, holding that amounts received for upgradation and modernisation of a sugar mill cannot be treated as consideration for any taxable service.

The Tribunal held that the arrangement between the parties was in the capacity of a joint venture and, therefore, lacked the essential element of service provider and service recipient. In the absence of any taxable service, the demand under Renting of Immovable Property was found to be unsustainable in law.

Revenue-Sharing Between Hospital and Diagnostic Centres Not Liable to Service Tax: CESTAT allows Fortis Healthcare Appeal

Fortis Heathcare Ltd vs Commissioner of Central Excise andService Tax

CITATION: 2026 TAXSCAN (CESTAT) 187

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed an appeal filed by Fortis Healthcare Ltd., holding that revenue-sharing arrangements between a hospital and diagnostic service providers do not attract service tax under the category of “Support Services of Business or Commerce”.

The CESTAT allowed the appeal filed by Fortis Healthcare Ltd., and granted consequential relief.

Member-Only Services by Cooperative Society Not Taxable under Service Tax: CESTAT Applies Doctrine of Mutuality

The Perumatty Service Co Operative Bank Ltd vsCommissioner of Central Excise & Service Tax, Calicut

CITATION: 2026 TAXSCAN (CESTAT) 188

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the appeal filed by a cooperative society, holding that service tax demand under the category of Banking and Other Financial Services is unsustainable when services are provided exclusively to its own members.

The Tribunal held that the appellant, being a cooperative society and not a business entity, was not liable to pay service tax on legal services received from advocates.

Clandestine Removal Proven Through Private Diary & S.14 Admissions: CESTAT Upholds Excise Duty and Penalty on Tobacco Manufacturer

M/s Kunwar Bahadur Shri Kishan vs Commissioner of CentralExcise, Lucknow

CITATION: 2026 TAXSCAN (CESTAT) 189

The Customs, Excise and Service Tax Appellate Tribunal, Allahabad (CESTAT) held that clandestine manufacture and removal of excisable goods stands proved where a privately maintained diary recovered from the factory premises is corroborated by voluntary admissions recorded under Section 14 of the Central Excise Act, 1944, thereby justifying confirmation of duty demand, interest, and penalty on the manufacturer.

Tribunal held that once the facts of clandestine removal stood admitted and corroborated by documentary evidence, there was no requirement for the Department to adduce further proof. Accordingly, the Tribunal upheld the confirmation of duty under Section 11A of the Central Excise Act, 1944, along with interest and penalty imposed on the appellant firm under the Central Excise Rules, 2002.

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