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 March 01st 2026 to March 8th 2026.
IT Facility Management Services Not Taxable as Maintenance: CESTAT Quashes ₹4.5 Crore Service Tax Demand M/s. Network SolutionsPrivate Limited vs The Commissioner of Service Tax CITATION: 2026 TAXSCAN (CESTAT) 258 The Customs, Excise and Service TaxAppellate Tribunal has set aside a demand for service tax of ₹4.5 crore, holding that IT Facility Management...
IT Facility Management Services Not Taxable as Maintenance: CESTAT Quashes ₹4.5 Crore Service Tax Demand M/s. Network SolutionsPrivate Limited vs The Commissioner of Service Tax CITATION: 2026 TAXSCAN (CESTAT) 258
The Customs, Excise and Service TaxAppellate Tribunal has set aside a demand for service tax of ₹4.5 crore, holding that IT Facility Management Services cannot be classified as “Management, Maintenance or Repair Service” during the relevant period.
Applying the principles of classification under Section 65A, the Tribunal held that incidental maintenance could not alter the essential character of the service.On limitation, the Tribunal held that there was no suppression of income, as the matter arose only from the audit assessment.
Minimum Percentage of NPK for Classification Under 'Other Fertilizer' Questioned: CESTAT Remands Appeal Sikko IndustriesLimited vs C.C.E.-Ahmedabad-II CITATION: 2026 TAXSCAN (CESTAT) 259
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, remanded an appeal wherein the minimum percentage of Nitrogen (N), Phosphorous (P) and Potassium (K) for classification as fertiliser under Chapter 31 was questioned.
The single member bench considered classification of “soil conditioner” as had been done in Narmada Bio-chem Pvt Ltd (2019). The tribunal, via Dr. Ajaya Krishna Vishvesha (Judicial Member), allowed the appeal by remanding it and gave certain detailed directions to the Adjudicating Authority.
CESTAT Sets Aside ₹47.96 Lakh Service Tax Demand on Road & Canal Works, Holds Exemption Cannot Be Denied Based Solely on Form 26AS M/s Shailja Construction vs Commissioner, CGST &Central Excise, Agra CITATION: 2026 TAXSCAN (CESTAT) 260
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, set aside the demand of service tax of Rs. 47.96 lakh on road and canal works. In the present case, it was held that exemption cannot be denied based solely on Form 26AS.
CESTAT noted that additional documents submitted by the appellant have not been considered before demanding service tax. The single member bench set aside the demand of service tax as the services were exempted. P.K. Choudhary (Judicial Member) found the impugned order to be suffering from legal infirmities and allowed the appeal.
CESTAT Reiterates Extended Period of Limitation Not Invokable When there is a Bona-fide Belief about Non-taxable/Exempted Nature of the Services M/s MVM Business Services vs Commissioner of CentralExcise & CGST, Noida CITATION: 2026 TAXSCAN (CESTAT) 261
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reiterated that extended period of limitation cannot be invoked when there is a bona-fide belief of the appellant that the nature of services rendered is non-taxable or exempted.
The bench of Sanjiv Srivastava (Technical Member) held that a demand made by invoking extended period cannot be upheld and set aside the impugned order by allowing the present appeal.
S. 11BB of Excise Inapplicable Where Amount Paid Under Protest Without Adjudicated Duty: CESTAT Directs 12% Interest On Refund M/S T T LIMITED vs Commissioner, Central Goods &Service Tax, Meerut CITATION : 2026 TAXSCAN (CESTAT) 262
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, held that Section 11BB of the Central Excise Act, 1985 is inapplicable where an amount is paid under protest without adjudicated duty. The tribunal directed a 12% interest on refund.
The tribunal took note of Principal Commissioner Central Goods and Service Tax v. M/s Parle Argo Private Limited and held that when rate of interest is not prescribed, interest at 12% per annum is awarded on revenue deposit. The bench, comprising P. K. Choudhary (Judicial Member) ruled that the Section 11BB was inapplicable so interest was not to be calculated from expiry of three months from the date of filing of refund application. Instead, it was held to be calculated from the date of deposit.
Service Tax Demand on Cab Services to Wipro SEZ Unit Set Aside: CESTAT Quashes ₹20.23 Lakh Service Tax Demand Nine Wheels Rent-A-Cab vs Commissioner of Central TaxRangareddy - GST CITATION : 2026 TAXSCAN (CESTAT) 263
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Hyderabad has quashed a service tax demand of ₹20.23 lakh against Nine Wheels Rent‑A‑Cab, holding that cab services provided to Wipro’s Special Economic Zone(SEZ) unit qualify for exemption under the SEZ Act.
The bench of Angad Prasad ( judicial member), A.K. Jyotishi( technical member ) cited the GMR Aerospace Engineering Ltd ruling to emphasize that Finance Act notifications cannot restrict SEZ exemptions. So the condition of within SEZ was not applicable, the demand was unsustainable, and the Commissioner’s order was set aside.
CA's Certificate on Excess Payment Under Scrutiny: CESTAT Remands Service Tax Refund Claim M/s Kailash Advertising Agency vs Commissioner of CGST& Central Excise, Howrah CITATION : 2026 TAXSCAN (CESTAT) 264
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has remanded a refund dispute, directing the adjudicating authority to re‑examine the Chartered Accountant’s certification of excess service tax payment.
The bench R. Muralidhar (judicial member) ruled that the adjudicating authority decide the matter afresh, in accordance with law, within three months of receiving the order.
CA Certificate Insufficient to Conclude that the Incidence of Tax has been Passed on to the Customer: CESTAT Remands Matter to RSA M/s Margadarsi Marketing Pvt Ltd vs Commissioner ofCentral Excise CITATION : 2026 TAXSCAN (CESTAT) 265
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, held that a Chartered Accountant (CA) Certificate is insufficient to conclude that the incidence of tax has not been passed on to the customer. In a matter related to this, CESTAT remanded the case to theRefund Sanctioning Authority (RSA).
The bench of A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) remanded the matter back to the RSA for re-computing the amount of consequential refund admissible on merit and re-assess if the appellant had crossed the bar of unjust enrichment.
CESTAT Confirms ₹16.78 Crore Service Tax Demand and Equal Penalty on Wrongful Double Availment of Cenvat Credit M/s Prithvi Information Solutions Ltd vs Commissioner ofCentral Tax Rangareddy - GST CITATION : 2026 TAXSCAN (CESTAT) 266
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has upheld a service tax demand of ₹16.78 crore along with an equal penalty under Section 78 of the Finance Act, 1994, for wrongful double availment of Cenvat credit.
The bench of Angad Prasad (judicial member) and A K Jyotishi (Technical Member) held that the credit taken by the appellant was irregular and therefore, rightly demanded, and held that imposition of penalty under section 78 was tenable and sustainable.
Horticulture Services Exempt from Service Tax: CESTAT Confirms Only ₹12,870 Shortfall on Manpower Supply Services M/s Prasad Engineering vs Commissioner of CGST &Central Excise, Jamshedpur CITATION : 2026 TAXSCAN (CESTAT) 267
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that horticulture services, such as garden upkeep, watering, fertilization, and spraying of insecticides, are exempt from service tax and confirmed only a minor shortfall of ₹12,870 relating to manpower supply services, payable with interest but without penalty.
Accordingly all penalties imposed earlier were set aside, and the appellant was granted consequential relief of pre-deposit after adjusting the payable ₹12,870 plus interest, and the appeal was disposed of.
Superstar Rajinikanth Wins Appeal: CESTAT Rules Renting of Raghavendra Mandapam for Hotel Use Not Liable to Service Tax R. Rajinikanth vs Commissioner of GST & Central Excise CITATION : 2026 TAXSCAN (CESTAT) 269
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) allowed the appeal filed by Superstar Rajinikanth and held that renting of Raghavendra Mandapam for running a hotel is not liable to service tax under the Finance Act, 1994.
The tribunal pointed out that the building continued to be used as a hotel and falls within the exclusion provided for buildings used for accommodation including hotels. The tribunal set aside the impugned orders and allowed the appeal with consequential relief.
Hindustan Shipyard Not Liable to Include Travel & Accommodation Costs of Foreign Consultants in Service Tax Value: CESTAT Commissioner of Central Tax Visakhapatnam - GST vs M/sHindustan Shipyard Ltd CITATION : 2026 TAXSCAN (CESTAT) 270
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, has dismissed the Department’s appeal, confirming that expenses incurred towards air travel, accommodation, and local facilities for foreign specialists deputed by a Russian vendor are not includable in the taxable value of Consulting Engineering Services under the reverse charge mechanism.
Accordingly, the Tribunal upheld the Commissioner’s order and dismissed the Department’s appeal.
Words 'Proper Officer' Expunged from Impugned Order: CESTAT Disposes Appeal for De Novo Adjudication Commissioner of Customs, Chennai-II (Imports) vs ShriInderjeet Singh Narang CITATION : 2026 TAXSCAN (CESTAT) 271
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chennai, disposed of an appeal for de novo adjudication, expunging the words ‘proper officer’ from the Order-in-Original passed by the First Appellate Authority.
CESTAT, via Vasa Seshagiri Rao (Technical Member) and P. Dinesh (Judicial Member), disposed of the appeals, remanding the matter for de novo adjudication in accordance with the law by the appropriate officer authorized under Notification No. 29/2022.
Export Benefit Cannot be Denied Unilaterally by Customs Authorities: CESTAT Allows Appeal, Notes Legal Infirmity M/s. Ganges Internationale Private Limited vs Commissioner of Customs CITATION : 2026 TAXSCAN (CESTAT) 272
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, allowed an appeal and noted legal infirmity, holding that export benefits cannot be denied unilaterally by Customs authorities.
The two member bench of Vasa Seshagiri Rao (Technical Member) and P. Dinesha (Judicial Member) also took note about certain legal infirmities with respect to Sections 51 and 17. CESTAT therefore allowed the appeal, setting aside the order of the Commissioner.
Service Tax Penalty Imposed not Permissible as Land Belongs to Govt of Meghalaya, Not Intended for Sale: CESTAT Allows Appeal M/s Asian Housing & Constructions Pvt. Ltd vsCommissioner of CGST & Central Excise, Kolkata CITATION : 2026 TAXSCAN (CESTAT) 273
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Kolkata Bench, allowed an appeal wherein the penalty imposed was not permissible as the subject land belonged to the Government of Meghalaya which is not intended for sale to prospective customers.
The two member bench of the CESTAT, comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member), held that the penalty is not imposable, that the demand has been set aside and the appellant has paid the total service tax payable by them.
CESTAT Rules Customs Cannot Reject Declared Export Price with 11% Mark-Up Absent Evidence; Transaction Value Must be Accepted in Iron Ore Duty Case M/s S.K. Sarawagi & Co. Pvt Ltd vs Commissioner ofCustoms Visakhapatnam - CUS CITATION : 2026 TAXSCAN (CESTAT) 274
The Customs, Excise andService Tax Appellate Tribunal (CESTAT) Hyderabad held that Customs authorities cannot arbitrarily reject the declared export price of iron ore fines by applying an 11% mark‑up without substantive evidence, and the transaction value corroborated by the sale contract and Bank Realization Certificate (BRC) must be accepted unless cogent reasons are recorded for its rejection.
The bench of A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) held that the rejection of transaction value was not proper, legal, or correct. The impugned order was set aside, and the matter was remanded to the assessing officer to finalize the assessment strictly based on the transaction value reflected in the BRC.
Re-assessment did not Follow the CVRs, Examination Sought before Assessment: CESTAT Allows Appeal Chandan Steel Limited vs Commissioner of Customs (Import),Nhava Sheva CITATION : 2026 TAXSCAN (CESTAT) 275
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Mumbai, allowed an appeal noting that the re-assessment did not follow the Customs Valuation (Determination of Valuation of Imported Goods)Rules, 2007 (CVR) and that the assessee sought an examination of goods before initial assessment.
Additionally, CESTAT held that the misdeclaration is not in line with the facts of the case and the confiscation, fines and penalties are thus not sustainable. The two member bench of M.M. Parthiban (Technical Member) and Dr. Suvendu Kumar Pati (Judicial Member) also held that the CVR provisions have not been followed and therefore, set aside the order passed by the Commissioner (Imports).
15% Retention on Statutory Port Dues is Reimbursement of Overheads, Not Commission Under BAS: CESTAT M/s Kakinada Seaports Ltd vs Commissioner of CentralExcise & Service Tax, Visakhapatnam - II CITATION : 2026 TAXSCAN (CESTAT) 276
The Customs, Excise andService Tax Appellate Tribunal (CESTAT) Hyderabad has clarified that the 15% retention on statutory port dues was only a reimbursement of overheads and taxes permitted under its concessionaire agreement with the Government of Andhra Pradesh, and this retention could not be treated as commission or consideration under Business Auxiliary Service (BAS).
After examining all the matters bench, Angad Prasad(judicial member)and A.K. Jyotishi (technical member )held that service tax was not leviable on the 15% retention, set aside the adjudicating authority’s orders.
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