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 14th 2026 to March 20th 2026.
Management Consultancy Service is Self Service, not Business Support or Auxiliary Service: CESTAT Rules No Tax Applicable M/s Bharathi Cement CorporationPvt Ltd. vs Commissioner of Central Tax Guntur - GST CITATION : 2026 TAXSCAN (CESTAT) 293 The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Hyderabad Bench, reiterated that...
Management Consultancy Service is Self Service, not Business Support or Auxiliary Service: CESTAT Rules No Tax Applicable
M/s Bharathi Cement CorporationPvt Ltd. vs Commissioner of Central Tax Guntur - GST
CITATION : 2026 TAXSCAN (CESTAT) 293
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Hyderabad Bench, reiterated that management consultancy service is not covered within the category of Business Support Service or Business Auxiliary Service, it will not be eligible for service tax as it is self service.
The tribunal observed that the appellant has paid the demanded amount to the tune of INR 18,57,880/-. It was also noted that some of the employment agreements were entered well before the management consultancy agreement.
Reimbursement Received For Warranty Expenses From Foreign Manufacturer Not Taxable: CESTAT quashes Service Tax Demand Against IBM India
CITATION : 2026 TAXSCAN (CESTAT) 294
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT)Bangalore Bench has held that reimbursements received from an overseas manufacturer on warranty costs expenses do not amount to a taxable service. The Tribunal has clarified that a flow of money towards reimbursements of expenses does not amount to a taxable service in absence of any other service being rendered for consideration.
Further, it was held by the Tribunal that suppression could not be invoked as facts were known to the department and third party vendors had already discharged service tax on their respective invoices.
CESTAT allows CENVAT Credit on Issuance of Pre-Amendment Invoices, upholds Six Month Time Limit Rule Cannot be Applied Retrospectively
Tamil Nadu Newsprint and Papers Limited vs Commissioner of GST andCentral Excise
CITATION : 2026 TAXSCAN (CESTAT) 295
The Customs, Excise and Service Tax Appellate Tribunal [CESTAT] Chennai Bench held that the six-month period as introduced in the CENVAT Credit Rules 2004, cannot be applicable retrospectively to deny credit on invoices that were issued prior to the amendment.
Therefore,it held that the introduction of the limitation period regulated the timing of the availment of credit prospectively and could not deny a vested right.Hence it set aside the impugned order and granted consequential relief to the assessee.
Once NCLT Approves Resolution Plan under IBC, Appeal Serves No Purpose: CESTAT disposes Aircel Ltd’s Service Tax Appeal
Aircel Limited vs Commissioner of GST and Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 296
The Customs, Excise and Service Tax Appellate Tribunal[CESTAT] Chennai Bench has disposed of the Service Tax appeal filed by Aircel Limited after taking note of the approval of the company’s Resolution Plan by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC).
Accordingly, the Tribunal held that in the context of the approved resolution plan under the IBC, the present proceedings of the Service Tax appeal could not be continued and the appeal stood disposed of.
Distribution of Credit can only be Questioned at the ISD End and not at the End of the Recipient: CESTAT Decides on Exide CENVAT Credit case
M/s Exide Industries Ltd vs Commissioner of Central Goods & ServiceTax, Faridabad
CITATION : 2026 TAXSCAN (CESTAT) 297
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chandigarh, held that distribution of credit can only be questioned at the Input Service Distributor (ISD) end and not at the end of the recipient.
The two member bench of S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) reiterated the settled principle that distribution of credit can only be questioned at the ISD end and not at the end of the recipient. Therefore, questioning the same at the end of the appellant is not sustainable in law. The appeal has accordingly been allowed.
Discount Offered is not Includible in Assessable Value of Demo Vehicles: CESTAT Rejects Service Tax Appeal
M/s.Hindustan Motor Finance Corporation Ltd vs The Commissioner of GST& Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 298
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chennai Bench recently held that the discount offered would not be includible in the assessable value of demo vehicles and rejected a service tax appeal filed by a finance corporation.
With reference to the above, the two member bench comprising Vasa Seshagiri Rao (Technical Member) and P. Dinesha (Judicial Member) did not find any merit in the appeals and dismissed the same.
Service Tax Liability on Threshing and Redrying of Tobacco Leaves not Under Business Auxiliary Services : CESTAT
M/s Green Leaf Tobacco Threshers Ltd vs Commissioner of Central Excise& Service Tax, Guntur
CITATION : 2026 TAXSCAN (CESTAT) 299
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Hyderabad Bench, held that service tax liability on threshing and redrying of tobacco leaves does not arise under the category of Business Auxiliary Services (BAS).
The tribunal observed that service tax liability on threshing and redrying of tobacco leaves does not arise under the category of BAS and reliance for the same has been placed on ML Agro Products Ltd v. CCCE & ST, Guntur. CESTAT also observed that in order to fall under GTAS in terms of Section 65(50b), service has to be provided by a GTA in relation to transport of goods.
Sale of Gold Coins Settled with Supplier: CESTAT Rules in favour of South Indian Bank
M/s. South Indian Bank vs The Commissioner of Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 300
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore Bench, ruled in favour of the appellant, M/s. South Indian Bank, and held that there was neither consideration nor service in the present case as the appellant settled sales with supplier.
The tribunal observed that there is no service being rendered by the appellant to the supplier and instead the appellant sells the gold imported by him and after sales, the same is settled with the supplier based on the payment terms. The two member bench also noted that no consideration is being received from the supplier.
Samsung Required to Pay Service Tax for Importing Electronically Downloaded Software Under High Sea Sales Contract: CESTAT
Samsung (India) SoftwareOperations Private Limited vs The Commissioner of Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 301
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Bangalore Bench, held that Samsung is required to pay the service tax for importing electronically downloaded software under high sea sales contract. However, the appeal was allowed partially.
The two-member bench accepted the contention that the software imported prior to 16.05.2008 cannot be levied to service tax as the payments were made at a later date. D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) set aside the demand on imported softwares in CDs and electronic software received prior to 16.05.2008 but confirmed service tax on software imported under high sea sales from 16.05.2008 to 31.03.2010. The matter was remanded for redetermination of liability with applicable interest and penalty.
Strapping Not Packaging: CESTAT Rules MRF Tyres Bound with Plastic Straps Not Liable to S.4A Excise Valuation
M/s. MRF Limited vs Commissionerof GST and Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 302
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal(CESTAT) ruled that tyres, tubes and flaps tied with plastic straps cannot be treated as “pre-packaged commodities” and so they are not liable for valuation under Section 4A of the Central Excise Act, 1944.
The tribunal set aside the order of the Commissioner and allowed the appeal filed by MRF Ltd., holding that tyres, tubes and flaps tied with plastic straps are not liable for Section 4A valuation.
Services Rendered in Relation to Construction of Roads to Governmental Authorities: CESTAT Allows Appeal
Lomesh Kumar (DAPL) vs Commissioner, CGST, Ghaziabad
CITATION : 2026 TAXSCAN (CESTAT) 303
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, held that since the services rendered by the appellant is in relation to construction of roads to Governmental Authorities, the appeal is directed to be allowed.
The two member bench, composed of P.K. Choudhary (Judicial Member) and P. Anjali Kumar (Technical Member), allowed the appeal ultimately.
Recipient of Service to Pay Applicable Service Tax as per Reverse Charge Mechanism: CESTAT Allows Appeal
M/s Pankaj Dua & Associatesvs Commissioner, CGST & Central Excise, Ghaziabad
CITATION : 2026 TAXSCAN (CESTAT) 304
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Allahabad Bench, allowed an appeal and held that the recipient of service is liable to pay the applicable service tax as per reverse charge mechanism.
The tribunal, via P.K. Choudhary (Judicial Member) and P. Anjani Kumar (Technical Member), observed that the appellant had, in fact, submitted necessary documents to support their claim. Further, CESTAT noted that it is the responsibility of the person who makes the allegation to prove the evidence.
Conversion of GI Wire into Barbed Wire & Chain Link Mesh: CESTAT Seeks Re-examination of ‘Manufacture’ u/s 2(f) CEA
Commissioner of Central Excise,Mysore vs Nataraja Industries
CITATION : 2026 TAXSCAN (CESTAT) 305
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) of Bangalore bench remanded the matter related to conversion of galvanized iron (GI) wire into barbed wire and chain link mesh constitutes "manufacture" under Section 2(f) of the Central Excise Act, 1944.
The Tribunal has also instructed the assessee to produce all relevant supporting evidence and mandated that the adjudicating authority provide a fair hearing before passing a fresh order. Without a clear finding on whether "manufacture" actually occurred, the basis for tax demand remains legally fragile, said the appellate body.
No Service Tax Leviable on Fund Transfers to Overseas Branch without Proof of Service: CESTAT Dismisses Revenue Appeal
The Commissioner of Central Taxvs M/s. Exilant Technologies Pvt. Ltd.
CITATION : 2026 TAXSCAN (CESTAT) 306
The Bangalore Bench of the Customs, Excise and Service Tax AppellateTribunal (CESTAT) has dismissed an appeal of the revenue and upheld a decision of the commissioner observing that no service tax is leviable on fund transfers to overseas branches without proof of service.
Accordingly, the CESTAT found no impairment in the Commissioner’s original reasoning and confirmed that fund transfers meant to reimburse branch expenses cannot be taxed as services.
Dubai Branch Activities like Sales Promo fall Under BAS, But No Service Tax under RCM as Entities Not Distinct: CESTAT favours Skyline
CITATION : 2026 TAXSCAN (CESTAT) 307
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ofBangalore ruled that the services offered by Dubai branch like sales promotion fall under Business Auxiliary Service, however no tax leviable under ReverseCharge Mechanism (RCM) as the entities are not distinct.
However, it noted that the company had already reversed the unutilized credit, a fact verified by both a Chartered Accountant and departmental authorities. Therefore, the appellate tribunal set aside the penalties while maintaining the interest on the credit demand.
Requirement of Intimating Superintendent Cannot be Equated with the Intimation to be given under Exemption Notification: CESTAT Remands Issue for Redetermination
COMMISSIONER OF CGST &CENTRAL EXCISE- RAJKOT vs METAL ALLOYS CORPORATION
CITATION : 2026 TAXSCAN (CESTAT) 308
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, held that the requirement of intimating the Jurisdictional Range Superintendent cannot be equated with the condition/intimation to be given under an exemption notification issued under Section 5A of the Central Excise Act, 1944. However, the CESTAT remanded the issue for redetermination of demanded reversal of credit.
A plethora of judicial precedents were relied upon to draw the conclusion that no question of law arises in the present matter. However, it was found that Rule 6(3A)(e) also require payment of interest on such reversals. Therefore, for this limited purpose, the appeal was allowed by way of remand.
Turnkey Assembly Not ‘Manufacture’: CESTAT Rules Larsen & Toubro Not Liable to Excise Duty on RLMS Units
M/s. Larsen & Toubro (ECCDivision) vs Commissioner of Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 309
The Bangalore Bench of the Customs, Excise, and Service Tax Appellate Tribunal(CESTAT) ruled that the work done by Larsen & Toubro (ECC Division) in assembling RLMS units at site is not manufacture and no excise duty is payable.
The tribunal observed that the appellant cannot be treated as manufacturer of RLMS units and is not liable to pay excise duty. In the end, the tribunal set aside the order and allowed the appeal filed by Larsen & Toubro with relief.
CESTAT Rules Inox Air Products’ Fixed Facility Charges for Storage Tanks Not Taxable as ‘Supply of Tangible Goods’ Service
M/s.Inox Air Products PrivateLtd vs The Commissioner of GST & Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 310
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal(CESTAT) ruled that Fixed Facility Charges (FFC) collected by Inox Air ProductsPvt. Ltd. for providing storage tanks are not taxable as ‘Supply of Tangible Goods’ service.
The tribunal also observed that the Board circular is binding on the department and must be followed. The tribunal set aside the impugned order and allowed the appeals filed by Inox Air Products Pvt. Ltd. with consequential relief.
CESTAT Upholds Deductions on Post‑manufacturing Expenses, Strikes Down ₹6.34 lakh Excise Duty Demand Against Dabur India
M/s Dabur India Ltd vsCommissioner of Central Excise, Goods & Service Tax, Chandigarh
CITATION : 2026 TAXSCAN (CESTAT) 311
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, struck down an excise duty demand of ₹6.34 lakh along with interest and penalty against Dabur India, holding that deductions on post‑manufacturing expenses (PME) such as octroi, sales tax, and transportation costs on a weighted average basis are valid.
The tribunal noted that since the department had not appealed against the 2009 ruling, it had effectively accepted the position. Following consistent judicial precedents, the Bench held that the impugned order was unsustainable.
Cost-Sharing Not Taxable: CESTAT Rules Panasonic Not Liable To Service Tax On Advertisement Reimbursements Under BAS
Panasonic Home Appliances IndiaCo. Ltd. vs Commissioner of GST & Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 312
The Customs, Excise and Services Tax AppellateTribunal (CESTAT), Chennai Bench, commented on cost-sharing being non-taxable and held that Panasonic was not liable to service tax on advertisement reimbursements under Business Auxiliary Services (BAS).
The two member bench held that in absence of both a taxable service and consideration, no tax liability arises. Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) confirmed the decision in Hindustan Construction Company Ltd. v. Commissioner of Central Goods and Service Tax (2025) and found that the issue does not involve the rendering of any service.
Service Tax Payable on Supply of Water which is part of Port Service: CESTAT Decides on Pure Agent Service
Sea Shipping Services vsCommissioner of C.E. & S.T.-Rajkot
CITATION : 2026 TAXSCAN (CESTAT) 313
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, held that there was no mens rea to evade tax payment but the appellant, Sea Shipping Services, would be liable to pay service tax on supply of water as it is a part of Port Service. The CESTAT decided on the applicability of pure agent service in the present matter.
Dr. Ajaya Krishna Vishvesha (Judicial Member) and Satendra Vikram Singh (Technical Member) found that there was no mens rea to evade payment of service tax and therefore set aside the penalty of INR 6,82,400/- while upholding the service tax demand confirmed by invoking the extended period.
CENVAT Credit cannot be denied for Common Input Services Across Units: CESTAT Rules in Favour of Kirloskar Toyota
M/s. Kirloskar Toyota TextileMachinery Pvt. Ltd. vs Commissioner of Central Excise
CITATION : 2026 TAXSCAN (CESTAT) 314
The Bangalore Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that CENVAT credit on common input services cannot be denied merely because such services were used across multiple units of the same assessee.
The tribunal also observed that the issues relating to eligibility of credit on various services are covered by judicial decisions relied upon by the appellant. The tribunal set aside the impugned order and allowed the appeal filed by Kirloskar Toyota Textile Machinery Pvt. Ltd. with consequential relief.
Smuggling of Narcotics Comprises National Security, Ruins Indian Youth: CESTAT Decides on CB License
SAARTHEE SHIPPING CO vsCOMMISSIONER OF CUSTOMS – KANDLA
CITATION : 2026 TAXSCAN (CESTAT) 315
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Ahmedabad Bench, decided on Custom Broker’s license. The tribunal opined that smuggling of narcotics comprises national security and ruins Indian youth.
The bench of Dr. Ajaya Krishna Vishvesha (Judicial Member) and Satendra Vikram Singh (Technical Member) thus dismissed the appeal for revocation of suspension and directed that the inquiry proceedings be completed according to the timelines set in CBLR.
No Service Tax on Statutory Auction Fees, Demurrage: CESTAT Sets Aside ₹2.62 Crore Demand against Tobacco Board
The Regional Manager, TobaccoBoard vs Commissioner of Central Excise And Service Tax
CITATION : 2026 TAXSCAN (CESTAT) 316
The Customs, Excise and Service Tax Appellate Tribunal [CESTAT] Hyderabad Bench has made a significant ruling in favor of the Tobacco Board by quashing a service tax demand of ₹2.62 crore.
However, Demands for demurrage are not “consideration” for service but are intended for the smooth flow of business.Therefore the Tribunal dismissed the demand and penalties and allowed the appeals.
No Proof of Gutka Manufacture Before Machines were Installed, Trial Run Not Liable to Excise Duty: CESTAT in Maruti Tobacco Matter
M/s Zemini Marketing Company vsCommissioner of Central Goods and Service Tax, Kolhapur
CITATION : 2026 TAXSCAN (CESTAT) 317
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, in a matter related to Maruti Tobacco Products Private Limited, held that if there is no proof of manufacture of gutka/pan masala before the installation of machines then the trial run would not be liable to excise duty.
Due to lack of corroborative evidence, the bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) made clear the position that if the manufacturer is found to be operating without obtaining registration and there is no clearance of goods owing to the reason of trial production, then penalty cannot be imposed.
Rule 8 of Valuation Not Applicable Where Goods Are Cleared to Independent Buyers as well as Sister Units: CESTAT Rules in favour of Steel Authority of India
M/s Steel Authority of IndiaLimited vs Commissioner of CGST & Central Excise, Bolpur
CITATION : 2026 TAXSCAN (CESTAT) 318
The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Kolkata Bench, ruled in favour of the Steel Authority of India wherein it was held that Rule 8 of the Valuation Rules is not applicable in cases where goods are cleared to independent buyers as well as sister units.
The CESTAT observed that the penalty set aside by the Commissioner (Appeals) as the appellant “did not have any intention to evade duty” thereby lacking mens rea. As per this reasoning, it should have also held, in the eyes of the bench, that the demand confirmed was also illegal. Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) also mentioned that Rule 8 is to be applied in cases where goods are sold only to sister units.
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