CESTAT Weekly Round-up
This weekly round-up provides an analytical summary of the key stories related to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reported on Taxscan from February 8th 2026 to February 15th 2026.
Software Preloaded in Imported Hardware Includible in Customs Value: CESTAT Upholds Duty Demand, Drops Penalty against Wipro Wipro vs Commissionerof Customs CITATION: 2026 TAXSCAN (CESTAT) 190 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai has held that the value of software preloaded in imported networking equipment is includible in...
Software Preloaded in Imported Hardware Includible in Customs Value: CESTAT Upholds Duty Demand, Drops Penalty against Wipro
Wipro vs Commissionerof Customs
CITATION: 2026 TAXSCAN (CESTAT) 190
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai has held that the value of software preloaded in imported networking equipment is includible in the assessable value of hardware for customs duty purposes.
The Tribunal upheld the duty demand only for the normal limitation period along with interest, set aside invocation of the extended period, and completely dropped penalties. The matter was remitted for re-quantification of duty limited to the normal period.
CESTAT Allows CENVAT Credit on Construction Services Used for Renting of Immovable Property, says Appellant Eligible to Take Credit
M/s DLF Cyber CityDevelopers Limited vs Commissioner of Central Excise & Service Tax
CITATION: 2026 TAXSCAN (CESTAT) 191
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bench at Chandigarh has held that CENVAT credit cannot be denied on input services used for construction of immovable property, when such property is subsequently used for providing taxable Renting of Immovable Property Service. The Tribunal set aside the demand raised by the Department, holding the impugned order to be unsustainable in law.
The Tribunal allowed the appeal and set aside the demand, interest and penalties. The matter was heard by a bench comprising Justice S.S. Garg, (Judicial Member), and P. Anjani Kumar (Technical Member).
CESTAT Upholds Service Tax Demand u/s 73(2) on Security Agency, Grants Cum-Tax Benefit on Recalculation
M/s. PNG Detective & Security Pvt. Ltd vsCommissioner, Central Excise & Service Tax Alwar
CITATION: 2026 TAXSCAN (CESTAT) 192
The Principal Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at New Delhi has upheld the confirmation of service tax demand, interest and penalties arising out of alleged suppression of taxable value of taxable services. The Tribunal rejected the contention that the demand was based on mere presumptions.
The Tribunal upheld the invocation of the extended period, noting non-registration under manpower supply services and failure to comply with statutory filing requirements. Penalties under Sections 73 and 77 were also sustained, subject to re-calculation in line with the revised demand.
Electricity Wheeled to State Electricity Board Grid Amounts to Sale: CESTAT Denies CENVAT Credit on Fuel Used in Captive Power Plant
M/s Jindal Stainless Ltd vs Commissioner of CentralExcise, Goods Service Tax
CITATION: 2026 TAXSCAN (CESTAT) 193
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that CENVAT credit is not admissible on inputs used for electricity generation, where the entire electricity generated was wheeled out to the Haryana State Electricity Board grid and not used within the factory. The Tribunal held that such transfer of electricity to the grid constitutes a sale under the Central Excise Act, 1944.
On the issue of limitation, the Tribunal held that the extended period could not be invoked as there was no evidence of suppression or wilful misstatement. Accordingly, the demand raised under the extended period and all penalties were set aside. The appeal was thus partly allowed.
CESTAT Allows Refund of Service Tax on Head Office Services Used for Export, Orders Limited Remand
M/s. eShakti com Pvt.Ltd. vs Commissioner of GST and Central Excise
CITATION: 2026 TAXSCAN (CESTAT) 194
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that input services used beyond the factory premises, including those availed at the head office or corporate office qualify as “specified services” for the purpose of refund under Notification No. 41/2012-ST.
The impugned orders were set aside to the extent they rejected refund claims, and the appeals were allowed by way of remand. The order was pronounced by a Bench comprising P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member).
CESTAT Sets Aside Demand on ISD-Distributed Advertisement Services, Holds Booking of Expenses at Head Office Not Covered by Rule 7
Kansai Nerolac Paints Ltd vs Commissioner of CentralExcise, Goods & Service Tax, Faridabad
CITATION: 2026 TAXSCAN (CESTAT) 195
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside demands raised on CENVAT credit availed on advertisement agency services distributed by the input service distributor. The Bench held that Rule 7 of the CENVAT Credit Rules, 2004 does not require such expenses to be booked in the books of account of the manufacturing unit.
In view of the settled legal position, the Tribunal held that the show cause notices and the impugned order could not be sustained. Accordingly, all three appeals were allowed with consequential relief.
Service Tax Demand on Adda-fees under ‘BSS’ Category is Not Sustainable in Law: CESTAT
Rohan And Rajdeep Infrastructure Pvt Ltd vs Commissionerof Central Excise & Service Tax
CITATION: 2026 TAXSCAN (CESTAT) 196
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside multiple service tax demands confirmed on adda fees, holding that such collections made under ‘Build, Operation and Transfer’ agreement for development of a public bus terminal do not constitute taxable “Business Support Service” under the Finance Act, 1994.
The Tribunal also held that a substantial part of the demand was barred by limitation, as the department had failed to establish suppression, fraud or misstatement necessary for invocation of the extended period.
CESTAT Quashes Reclassification-Based Customs Duty Demand on Natural Rubber Latex Imports u/s 28 on Limitation Grounds
TTK Protective Devices Ltd vs Commissioner of Customs
CITATION: 2026 TAXSCAN (CESTAT) 197
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the demand, interest and penalty arising from reclassification of imported natural rubber latex concentrate, holding that the show cause notice was barred by limitation.
The Tribunal held that there was a genuine divergence of views on classification and the Department had failed to establish any suppression of facts. Consequently, the invocation of the extended period under Section 28(4) of the Customs Act was held to be unsustainable.
No Fault with IO allowing Interest Rate at 12%: CESTAT Rejects appeal Contrary to Provisions of S. 11BB
M/s Sheela Foam Ltd vs Commissioner, Central Excise &CGST, Noida
CITATION: 2026 TAXSCAN (CESTAT) 198
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bench at Allahabad has held that where refund is governed bySection 11B of the Central Excise Act, 1944, the interest payable is strictly in terms of Section 11BB and the notified rate thereunder, and not at 12% as claimed.
The Tribunal held that the amount claimed as refund following its earlier order was nothing but Central Excise duty and such refund is governed by Sections 11B and 11BB of the Central Excise Act, 1944. Therefore, interest is payable only at the rate notified under Section 11BB and not at 12% as claimed.
Deposit to be Treated as Amount Illegally Retained by Department: CESTAT Orders 12% Interest on Refund u/s 11BB
CITATION: 2026 TAXSCAN (CESTAT) 199
The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that interest at the rate of 12% per annum is payable on amounts deposited during investigation and subsequently refunded. The Bench held that such deposits cannot be treated as “duty” under Section 11BB of the Central Excise Act, 1944.
The impugned Order-in-Appeal was modified and the Adjudicating Authority was directed to pay interest of 12% on the sanctioned amount. The appeal was allowed with consequential relief.
Commission on Services to Foreign Universities Not ‘Intermediary Service’ under Rule 2(f): CESTAT Sets Aside Service Tax Demand
M/s Auscan Consultants India Ltd vs Commissioner ofCentral Excise and Service Tax, Chandigarh-I
CITATION: 2026 TAXSCAN (CESTAT) 200
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bench at Chandigarh has set aside the demand of service tax holding that commission received from foreign educational institutions for services rendered does not fall under “intermediary services” but qualifies as export of service.
The Tribunal noted that in identical matters it had been held that such services qualify as export of service and the demands were set aside. In view of the settled position, the Tribunal held that the impugned order confirming service tax demand is not sustainable in law.
Service Tax Paid Under Partner’s PAN to Be Adjusted Against Firm’s Liability: CESTAT Partly Allows Appeal
M/s Deepa Construction vs Commissioner of Central GoodsService Tax, Central Excise, Raipur
CITATION: 2026 TAXSCAN (CESTAT) 201
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Bench at New Delhi has held that service tax paid under the PAN of a partner is liable to be adjusted against the liability of the partnership firm.
The appeal was partly allowed to the extent that service tax paid under the partner’s PAN is to be adjusted against the firm’s liability. The demand on sub-contract services was upheld, and the matter relating to computation of demand on Works Contract Service and Transportation of Goods was remanded to the original authority for reconsideration.
Use of Imported Helicopter for Non-Revenue Private Flights Violates Condition No. 104: CESTAT Upholds Confiscation
Indian Metal and Ferro Alloys Limited vs Commissioner ofCustoms (Preventive)
CITATION: 2026 TAXSCAN (CESTAT) 202
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bench at New Delhi has held that use of an imported helicopter for non-revenue private flights violates Condition No. 104 of the Exemption Notification. The Bench justified confiscation and duty demand.
The Customs Appeal filed by the company was dismissed and filed by the Department seeking enhancement of penalties was dismissed.
Customs Broker Not Required to Conduct Physical KYC Verification of Exporters, Govt Issued Certificates Presumed Authentic: CESTAT
M/S ATR LOGISTICS INDIA PVT LTD vs COMMISSIONER OF CUSTOMSAIRPORT & GENERAL
CITATION: 2026 TAXSCAN (CESTAT) 203
The Customs, Excise and Service Tax Appellate Tribunal, New Delhi Bench, held that a Customs Broker is not required to conduct physical verification of exporters and may rely upon government-issued documents, which carry a legal presumption of genuineness under Section 79 of the Evidence Act, 1872.
The Tribunal set aside the order passed by the Commissioner and directed that the appellant’s licence be restored.
Approval Of Resolution Plan By NCLAT Bars Continuation Of Revenue’s Service Tax Appeal: CESTAT
The Commissioner of GST & Central Excise vs Hindustan National Glass & Industries Ltd
CITATION: 2026 TAXSCAN (CESTAT) 204
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench, has held that a Service Tax Appellant by the Revenue cannot continue after the approval of the Resolution Plan by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016.
The Tribunal ruled that such an appeal would stand abatement and would be infructuous. The case was disposed of as abated without considering the merits of the service tax liability.
RCM Service Tax Demand Cannot Be Raised Solely on Foreign Currency Expenditure Shown in Balance Sheet : CESTAT
M/s Shree Venkatesh Films Pvt. Limited vs Commissioner of CGST & Central Excise
CITATION: 2026 TAXSCAN (CESTAT) 205
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax under the Reverse Charge Mechanism (RCM) cannot be raised merely on the basis of foreign currency expenditure appearing in the balance sheet without ascertaining the type of service. The Tribunal has set aside the demand of service tax along with interest and penalties.
The Tribunal held that under both tax regimes, it is necessary for the Department to establish the service received, its taxability, and the place of providing the service being within India. Since the Department had not done so, the demand was held to be unsustainable. The Tribunal set aside the service tax demand, interest, and penalties.
CENVAT Credit Denial Unsustainable Without Evidence Of Exclusive Use For Exempt Services: CESTAT
M/s Shree Venkatesh Films Pvt. Limited vs Commissioner of CGST & Central Excise
CITATION: 2026 TAXSCAN (CESTAT) 205
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that denial of CENVAT credit is not permissible unless the Department proves that the input services were exclusively used for providing services which are exempted.
The tribunal observed that the Department had not produced any evidence of documentary and factual nature to prove that the input services in dispute had been used exclusively for exempt activities. It also observed that the mere mention of exempt turnover and balance sheet figures would not be sufficient. Hence, it set aside the disallowance of CENVAT credit along with consequential interest and penalties.
Failure To Establish Public Utility Of Internal Roads: CESTAT Remands ₹6.73 Lakh Service Tax Demand
M/s. Shri Balaji Construction Co vs Commissioner of Central Excise & CGST
CITATION: 2026 TAXSCAN (CESTAT) 206
The New Delhi Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the order of the lower authorities and remanded the service tax demand of ₹6.73 lakh, observing that the issue of whether the internal roads were constructed for use by the general public had not been properly examined by the lower authorities.
The Tribunal noted that the appellant has claimed that the work order has been issued by the JDA, which is a government authority. It held that the issue of public use of the roads needed to be re-examined. Further, the tribunal set aside the impugned order and remitted the matter to the Adjudicating Authority to examine the documents and decide the exemption issue afresh.
Service Tax Demands Against Aircel Extinguished After NCLT-Approved Resolution Plan Under IBC: CESTAT
M/s. Aircel Ltd vs Commissioner of GST & CE
CITATION: 2026 TAXSCAN (CESTAT) 207
In a recent ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai Bench held that service tax demands stand extinguished following the approval of a Resolution Plan by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC)
The Bench of Justice P. Dinesha, Member (Judicial), Vasa Seshagiri Rao (technical) held that once the Resolution Plan is approved by the Adjudicating Authority under Section 31 (1) of Insolvency and Bankruptcy Code, 2016 (IBC), then ‘no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan’.
Denial of JSW Steel’s CENVAT Credit on GTA Services Solely on Rule 2(p) Amendment and Abatement Notifications is Legally Unsustainable: CESTAT
JSW Steel Limited vs Commissioner of GST and CentralExcise
CITATION: 2026 TAXSCAN (CESTAT) 208
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chennai has set aside a demand of ₹139.2 crore, ruling that the denial of CENVAT credit for Goods Transport Agency (GTA) services based solely on the 2008 amendment to Rule 2(p) and abatement notifications was legally unsustainable.
The bench of P. Dinesha (judicial member), Vasa Seshagiri Rao ( technical member) held that the appeal is thus allowed by way of remand, with consequential relief in accordance with law. Interest and penalties, if any, will be determined only after re‑examination.
CENVAT Credit On Escort And Security Services For Goods In Transit Requires Determination Of Place Of Removal: CESTAT
M/s. GE T&D India Ltd vs Commissioner of GST andCentral Excise
CITATION: 2026 TAXSCAN (CESTAT) 211
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) has held that the eligibility of CENVAT credit for escort and security services used for the transportation of goods of high value depends on the determination of the place of removal and therefore their eligibility cannot be determined mechanically.
The Tribunal comprising Justice P. Dinesha[Judicial Member] and Vasa Seshagiri Rao[Technical Member] explained that credit could not be denied mechanically and must be decided based on facts specific to each transaction.
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