CESTAT Weekly Round-up

Import of Spare Power Supply Not Subject to BIS Licence Requirement: CESTAT Sets Aside Customs Confiscation and Penalty Criticallog India PrivateLimited vs The Commissioner of CustomsCITATION : 2026 TAXSCAN (CESTAT) 277

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the confiscation of the imported spare power supply units and the penalty imposed on the ground that the imported goods did not fall within the purview of the requirement of mandatory certification under the Bureau of Indian Standards licensing regime.

The bench noted that the department had incorrectly applied the BIS certification requirement to spare components that were not intended for independent commercial sale. In view of this finding, the Tribunal concluded that the confiscation and penalty lacked legal basis.

Misclassification of Imported Medical Imaging Printers: CESTAT Upholds Differential Customs Duty Demand On Importer M/s. AGFA Healthcare India Pvt.Ltd. vs The Additional Director General (Adjudication) CITATION : 2026 TAXSCAN (CESTAT) 278

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the customs duty demand held that the company had incorrectly classified imported medical imaging printers under a tariff entry attracting lower duty.

The Tribunal upheld the demand for differential customs duty and dismissed the appeal made by the importer.

Manufacturing Activity Cannot be Treated as Exempted Service: CESTAT Sets Aside CENVAT Credit DemandM/s.Agrawal Metal Works Pvt.Ltd. vs Commissioner of Central Goods & Service Tax and Central ExciseCITATION : 2026 TAXSCAN (CESTAT) 279

The Customs, Excise and Service Tax AppellateTribunal (CESTAT) has set aside the demand raised observing that an activity that qualifies to be manufactured under the Central Excise Act cannot be treated as exempted service for the purpose of demanding reversal of CENVATcredit.

Since the appellant was engaged in manufacturing activity, the provisions for reversal of CENVAT credits cannot be invoked.Thus, the demand for CENVAT credits along with interest and penalties was set aside.

Customs Broker License Revocation is Harsh Penalty, Must be Based on Proven Involvement in Fraud: CESTATM/s. P T Varghese & Companyvs Commissioner of Customs CITATION : 2026 TAXSCAN (CESTAT) 280

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Bangalore Bench, partially allowed the appeal and held that harsh penal consequence of revocation of license depends on the involvement that the customs broker has in the alleged fraud.

In the present case, directions for the license revocation and forfeiture of security deposits were set aside. However, considering the violation of Regulation 10(d), the penalty of INR 50,000/- imposed was confirmed. The appeal was conclusively partially allowed by the two member bench of P.A. Augustian (Judicial Member) and Pullela Nageswara Rao (Technical Member).

Refund of Accumulated Credit Pertaining to Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess Not Permitted Beyond 2017: CESTAT Bank of India InvestmentManagers Pvt. Ltd vs Commissioner of CGST & Central Excise, Mumbai Central CITATION : 2026 TAXSCAN (CESTAT) 281

The Customs, Excise and Service Appellate Tribunal (CESTAT), Mumbai Bench, held that refund of accumulated credit pertaining to Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess is not permitted beyond 2017.

Accordingly, the bench of Ajay Sharma (Judicial Member), dismissed the appeals and held that the refund or transition of accumulated credit in the present case is not permitted.

Exemption Notifications Not Considered by Authority: CESTAT Allows Appeal of Rural Upskilling Institution CHECKMATE SERVICES PVT LTD vsCommissioner of C.E. & S.T.-VADODARA-I CITATION : 2026 TAXSCAN (CESTAT) 282

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Ahmedabad Bench, allowed an appeal as the Commissioner of C.E. & S.T. - Vadodara did not consider the notifications allowing exemptions for a rural upskilling institution.

The CESTAT observed that as per the entry, services provided by training providers were granted full exemption from payment of service tax and therefore the appellant were not liable to any service tax on their activity of training under the scheme DDU-GKY. The two member bench, comprising Dr. Ajaya Krishna Vishvesha (Judicial Member) and Satendra Vikram Singh (Technical Member), allowed the appeal accordingly.

CESTAT Overturns Excise Duty on CNG Valuation, Upholds Factory Price over Retail Price at HPCL Outlets M/s Bhagyanagar Gas Ltd vsCommissioner of Central Tax Guntur CITATION : 2026 TAXSCAN (CESTAT) 283

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside excise duty demands on Compressed Natural Gas (CNG), ruling that the factory price must be the correct basis for valuation rather than the retail selling price at Hindustan Petroleum Corporation Ltd. (HPCL) outlets.

Observing that the earlier order of 29.11.2023 squarely covered the same factual matrix, the Bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member)concluded: “we do not find any ground to uphold the orders of the Commissioner (Appeals), to the extent appealed against by the appellant.”

“Airport Service” Charges cannot be Taxed without Prior Authorization: CESTAT Clarifies Definitions, Allows Air India’s Appeal M/s. Air India Limited vsPrincipal Commissioner of Service Tax-I CITATION : 2026 TAXSCAN (CESTAT) 284

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reiterated the pre-condition of prior authorization to collect tax by the airport authority for “airport services”. It also clarified the definition of “tour operator services” and allowed the appeal in favour of Air India.

The two member bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) set aside the confirmed demand, interest and penalties and allowed the appeal with consequential relief.

CESTAT Quashes ₹3.85 Lakh Service Tax Demand, Holds TDS Paid Separately by NHAI Not Part of Taxable Value M/s Sheladia Rites (JV) vsCommissioner of Central Excise & Service Tax, Visakhapatnam - II CITATION : 2026 TAXSCAN (CESTAT) 285

In a recent ruling The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside ₹ 3,85,930 service tax demands and ruled that Tax Deducted at Source (TDS) paid by the National Highways Authority of India (NHAI) over and above the contract value cannot be included in the taxable value for service tax purposes

Tribunal noted that TDS is a statutory obligation under the Income Tax Act, borne by NHAI, and not part of the contract value charged by the appellant and applied the Supreme Court’s ruling in Bhayana Builders Pvt. Ltd. and the Chennai Bench’s decision in Indian Additives Ltd. (2025), both holding that amounts not forming part of contract value cannot be added to taxable service value.

Notifications Exempt EC & SHEC Only on Clean Energy Cess, Not on Excise Duty or CVD: CESTAT Grants Partial Relief for JSW Energy Commissioner of CustomsPreventive - Vijayawada vs JSW Energy Ltd CITATION : 2026 TAXSCAN (CESTAT) 286

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has clarified that exemption notifications for Education Cess (EC) and Secondary & Higher Education Cess (SHEC) apply only to the Clean Energy Cess (CEC) and not to excise duty or countervailing duty (CVD) on imported coal. The tribunal granted partial relief.

The Bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) held that a refund is not admissible for EC/SHEC paid on excise duty or CVD. So if EC/SHEC was wrongly collected on CEC, the refund must be recalculated and allowed, and observed that “a plain reading of the notifications indicates they exempt EC & SHEC only while discharging CEC in respect of goods falling under Tenth Schedule.”

Improper Procedure for Re-determination of Transaction Value of Power Banks: CESTAT Notes Lack of Evidence against Flipkart, Allows Appeal Flipkart India Private Limitedvs Commissioner of Customs CITATION : 2026 TAXSCAN (CESTAT) 287

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench was recently presented with a case concerning whether the assessable value of “Power Bank 5200mAH” imported by the Flipkart had been re-determined improperly.

The two member bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) allowed the appeal and set aside the order which had confirmed the demands on the basis of enhanced valuation of goods and dismissed the matter noting several judicial precedents.

No Service Tax on 'Notice Pay' and 'Bond Money' Recovered from Outgoing Employees: CESTAT Entitles Maruti Suzuki to Refund u/s 11BB M/s Maruti Suzuki India Ltd vsCommissioner of Service Tax-Delhi-iv CITATION : 2026 TAXSCAN (CESTAT) 288

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chandigarh Bench, held that refund was entitled to MarutiSuzuki India Ltd., the appellant. It was held that service tax on ‘notice pay’ and ‘bond money’ recovered from the employees leaving their job was not applicable.

The two member bench of S.S. Garg (Judicial Member) and P. Anjali Kumar (Technical Member) allowed the appeal with consequential relief, concurring with Ranbaxy Laboratories Ltd. v. Union of India and Ors and M/s Dow Chemicals International Pvt Ltd v. Commissioner of Service Tax - VII, Mumbai.

Capital Goods are 'Inputs' for Manufacture of Finished Goods: CESTAT holds SAIL Entitled to Cenvat Credit M/s Steel Authority of India vsCommissioner of CGST & Central Excise, Bolpur CITATION : 2026 TAXSCAN (CESTAT) 289

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, allowed an appeal noting erroneous findings by the Commissioner of CGST & Central Excise. The tribunal held that in the present case, capital goods were ‘inputs’ for manufacture of finished goods and the appellant was entitled for Cenvat Credit.

The tribunal observed that the appellant had correctly taken the credit on the items used for plants and machineries which were also used in the manufacture of finished goods. The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) allowed the appeal with consequential relief.

Assumed Suppression of Material Facts cannot Allege Intention to Evade Tax: CESTAT Held Goods not Liable for Confiscation or Penalties M/s Myntra Jabong India Pvt Ltdvs Principal Commissioner of Customs ACC CITATION : 2026 TAXSCAN (CESTAT) 290

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, ruled against the order of the Principal Commissioner of Customs ACC observing that assumed suppression of material facts cannot allege intention to evade tax. CESTAT held that the subject goods were not liable for confiscation or penalties and allowed the appeal in favour of Myntra Jabong India Pvt Ltd.

In such a case, as has been previously held, that the goods could not be held liable to confiscation and penalty could not be imposed under Section 114A. The bench, comprising Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member), set aside the order passed by the Principal Commissioner and allowed the appeal.

When Workmen are not Integrated into the Hiring Organization, Contract Cannot be Classified as Manpower Supply Services: CESTAT Allows Appeal filed by Larsen & Toubro M/s. Larsen & Toubro Ltd.(ECC Workshop & TLTRS) vs Commissioner of GST & Central Excise CITATION : 2026 TAXSCAN (CESTAT) 291

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chennai, held that when workmen are not integrated into the hiring organisation, their contracts cannot be classified as manpower supply services.

The two member bench, consisting of Ajauan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member), held the appellant eligible for consequential relief and set aside the previous orders.

Input Service Covers Services used in Relation to Business of Manufacture: CESTAT Refers to Rule 2(k) of Cenvat Credit Rules M/s.Hindustan Unilever Ltd. vsThe Commissioner of GST & Central Excise CITATION : 2026 TAXSCAN (CESTAT) 292

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Hyderabad Bench, referred to Rule 2(k) of the Cenvat Credit Rules and held that input service covers services used in relation to business of manufacture.

The two member bench of Vasa Seshagiri Rao (Technical Member) and P. Dinesha (Judicial Member) set aside the previous order in the present case and allowed the appeal with consequential benefits.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates