CESTAT Weekly Round-up

Rule 6 of CENVAT Credit Rules applies Liability to Reverse Proportional Credit: CESTAT Rules in Bank of India matter M/s. Bank of India vsCommissioner of Service Tax CITATION : 2026 TAXSCAN (CESTAT) 319

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, decided in a Bank of India matter that Rule 6 of CENVAT Credit Rules applies liability to reverse proportional credit.

The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) finally remanded the matter on the issue of quantifying the proportionate credit liable to be reversed by the appellant, along with applicable interest.

CESTAT Allows CENVAT Credit On CVD, SAD Paid via DEPB Scrips, Quashes Duty Demand Against Asian Peroxides M/s Asian Peroxides Ltd vsCommissioner of Central Excise & Service Tax, Guntur CITATION : 2026 TAXSCAN (CESTAT) 320

The Customs, Excise and Service Tax AppellateTribunal [CESTAT] Hyderabad Bench has held that the CENVAT credit is allowed for Countervailing Duty (CVD) and Special Additional Duty (SAD) even when the same is paid by debiting the Duty Entitlement Pass Book (DEPB) Scrip and not in cash.

Therefore,the Bench comprising A.K. Jyotishi [Technical Member] and Angad Prasad [Judicial Member] opined that denial of credit was unjust. Thus, the Tribunal set aside the order and allowed the appeals.

Service Tax On Ancillary Services to Power Distribution Unsustainable: CESTAT Set Aside ₹25.33 Cr Demand Against NESCO Utility M/s. NESCO Utility vs PrincipalCommissioner CITATION : 2026 TAXSCAN (CESTAT) 321

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Eastern Zonal Bench has set aside the demand of ₹25.33 Crores and held that ancillary services for the distribution of electricity are exempt from taxation, as was always intended.

Furthermore, the tribunal dismissed the demand for the extended period noting that as a Public Sector Undertaking NESCO had maintained transparent records as a result negating any allegation of willful suppression.

Service Tax Demand On BCCI Subsidies Unsustainable: CESTAT Sets Aside ₹33.5 Cr Demand against Cricket Association The Commissioner of CGST &C. Ex., Kolkata vs M/s. The Cricket Association of Bengal CITATION : 2026 TAXSCAN (CESTAT) 322

The Customs, Excise, and Service Tax AppellateTribunal (CESTAT) Eastern Zonal Bench set aside a service tax demand of ₹33,54,48,100 and held that the grants received from BCCI were not consideration for services but were subventions to promote cricket as a sport.

The tribunal held that the BCCI subsidies are not taxable as there is no relationship in providing any service. The demand is also not sustainable as it is barred by limitation as the department is aware of the activities of CAB through continuous filing.

No Excise Duty on Waste and Scrap from Insulated Wires and Cables Manufacture: CESTAT M/s Delton Cables Ltd vsCommissioner of Central Goods & Service Tax, Faridabad CITATION : 2026 TAXSCAN (CESTAT) 323

In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench, allowed the appeal and set aside a demand for reversal of credit and penalty imposed on waste and scrap generated during cable manufacturing.

The tribunal held that “The appellant is not required to reverse 10% of the value of exempted goods or to pay duty on waste and scrap cleared by the appellant.”

90 Smuggled Gold biscuits Seized: CESTAT upholds Customs Seizure, Rejects ‘No Knowledge’ Defence of Smugglers Shri Vishal Kumar Trivedi vsCommissioner of Customs (Prev.), West Bengal, Kolkata CITATION : 2026 TAXSCAN (CESTAT) 324

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT ) upheld the confiscation of 90 foreign-origin gold biscuits, weighing over 10.49 kg and valued at approximately ₹2.77 crore rejecting the defense of ‘no Knowledge’.

The bench of R. Muralidhar (Judicial member) and Rajeev Tandon (Technical member) ruled that the circumstances and inconsistencies in the appellants’ statements established their conscious involvement in smuggling activities, making the goods liable for confiscation and penalty under the Customs Act, 1962.

No Suppression Alleged, Demand Including Interest Restricted to Normal Limitation: CESTAT Secure Hospitality &Insurance Service Pvt Ltd. vs Commissioner of CGST CITATION : 2026 TAXSCAN (CESTAT) 325

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) of Mumbai Bench clarified that if there is no suppression alleged, the department cannot extend the limitation period to impose demand including interest. It should be restricted to the normal limitation period.

The Tribunal also pointed out that the "extended period of limitation" which allows authorities to go further back in time can only be triggered if there is evidence of a deliberate attempt to evade tax through fraud or suppression of facts. Since the department made no such allegations in its notice, it could not bypass the standard 30-month window.

Processing Undertaken does not bring into Existence any New Distinct Commodity: CESTAT States Such Activity is not Liable to Service Tax under BAS Commissioner of Central TaxGuntur gst vs M/s Premier Tobacco Packers CITATION : 2026 TAXSCAN (CESTAT) 326

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, held that processing alone does not bring into existence any new distinct commodity. It added that such activity is not liable to service tax under Business Auxiliary Services (BAS).

Finally, the two member bench of A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial

Member) held that the processing undertaken by the respondents does not bring into existence any new distinct commodity and the activity merely stabilizes and prepares the tobacco for storage and export. The same cannot be brought under BAS.

No Independent Liability of Co-Noticees Once Main Demand Settled through SLVDR: CESTAT Sets Aside Penalty u/r 26 of Excise Rules M/s. Salasar Ispat Pvt. Ltd vsCommissioner of CGST & Central Excise, Nashik CITATION : 2026 TAXSCAN (CESTAT) 327

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Mumbai held that when the main demand is settled through SLVDR (Sabka Vishwas (Legacy Dispute Resolution)) Scheme, then the liability of co-noticees stands extinguished.

The bench of Dr. Suvendu Kumar Pati [Judicial Member] observing that the once main demand was settled through the scheme, decided that no independent liability can survive against co-noticees, and consequently, penalties imposed under Rule 26 of the Central Excise Rules, 2002.

Apartment Sale Amount Exceeds Value in Sale Deed: CESTAT Directs Verification of Completion CertificateNagarjuna Homes vs Commissionerof Central Tax Medchal - GST CITATION : 2026 TAXSCAN (CESTAT) 328

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, heard a matter wherein the apartment sale amount was allegedly exceeding the value in sale deed. CESTAT directed for verification of the completion certificate.

The two member bench of A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) directed the matter to be remanded back to the Original Authority who shall verify the details including the competition certificate. Three months time was given to follow through this direction and the appeal stood allowed by way of remand.

Total Consideration Received from Members to be Redetermined for Service Tax: CESTAT Remands Matter Once Again Country Club (India) Ltd vsCommissioner of Central Tax Secunderabad - GST CITATION : 2026 TAXSCAN (CESTAT) 329

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Hyderabad Bench, remanded a matter again wherein the total consideration received from the members was to be redetermined for service tax .

After being repeatedly appealed and remanded, it was decided that the issue of non-inclusion of land value has to be excluded from the gross value for levying service tax. A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) allowed the appeal and remanded back the matter to the adjudicating authority for redetermination of demand, this is to be completed within two months after the furnishing of certificate of CA by the appellant.

Cenvat Credit Allegedly Availed without Receiving Goods in Factory: CESTAT quashes Demand and Penalty for Insufficient Evidence M/s Balaji Pressure Vessels Ltdvs Commissioner of Central Tax Medchal - GST CITATION : 2026 TAXSCAN (CESTAT) 330

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, heard allegations of Cenvat credit being availed without receiving the goods in the factory. Ultimately, the tribunal quashed the demand and penalty due to insufficient evidence.

The bench of A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) allowed the appeal, giving the rationale that the entire premise of the case of the department is based on the assumption that the goods had not reached the factory premises of the appellant but the same has been not supported by sufficient evidence. The demand was accordingly set aside.

Non-Extension of Benefit of Composition Scheme Available for WCS Questioned: CESTAT Remands Matter for Recalculation M/s Coastal EngineeringConstructions vs Commissioner of Central Excise & Service Tax, Hyderabad -II CITATION : 2026 TAXSCAN (CESTAT) 331

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, noted non-extension of benefit of composition scheme for work service contract (WCS) and questioned it. CESTAT remanded the matter for recalculation.

A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) remanded back the matter for the purpose of recalculating the demand, finding no merits in the arguments by the appellant.

Deployment of Staff for Rake Movement Falls Under Manpower Supply: CESTAT Quashes ₹7.79 Lakh Service Tax Demand R S And Brothers vsCommissioner, CGST & Central Excise, Lucknow CITATION : 2026 TAXSCAN (CESTAT) 332

In a recent ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, has set aside a ₹7.79 lakh service tax demand and clarified that services involving deployment of staff for rake movement constitute manpower supply, where liability rests with the recipient under the Reverse Charge Mechanism (RCM), and not with the contractor.

The bench, Justice P.K. Choudhary noted that “There is no ambiguity in the work order and the instructions are very very crisp and clear and there is no scope for classifying the services under any other category. “

Unclear Whether Excise Duty can be Demanded on Alleged Diversion of Goods when Duty already Paid: CESTAT Rejects Appeal Commissioner of C.G.S.T. andCentral Excise vs M/s. C.P. Re-Rollers Limited CITATION : 2026 TAXSCAN (CESTAT) 333

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Kolkata Bench, rejected an appeal wherein it was unclear whether excise duty can be demanded on alleged diversion of goods when the duty was already paid.

Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) did not find any merit in the appeal filed by the Revenue and dismissed the same.

Marked Differences Exist between Conditions and Considerations in a Contract: CESTAT Allows Appeal M/s Rashtriya Ispat Nigam Ltd vsCommissioner of Central Excise CITATION : 2026 TAXSCAN (CESTAT) 334

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Hyderabad Bench, noted the difference between conditions and considerations in a contract and allowed the appeal.

The two members, A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member), held that the amount cannot be considered as consideration paid to the appellant for especially providing port services for quicker turnaround. They found no merit in the contention that a contract had been executed from the charter party agreement, and ultimately allowed the appeal.

Order of Repayment of Refund from Exempted Service Erroneous as S.11B has no Provision to Recover Sanctioned Refunds: CESTAT Allows Appeal Partly M/s Amarnath Sharma vsCommissioner CGST CITATION : 2026 TAXSCAN (CESTAT) 335

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, partly allowed an appeal wherein it held that the order of repayment of refund from exempted service was erroneous as Section11B of the Central Excise Act, 1944 has no provision to recover sanctioned refunds.

P. V. Subba Rao (Technical Member) finally held that the order upheld is not correct as the direction to repay the erroneous refund is concerned. The appeal was partly allowed.

Belated Testing which may be Affected Over Time Cannot Override Contemporaneous Evidence: CESTAT Rules against CIMFR Reports M/s. JSW Steel Ltd. vsCommissioner of Customs CITATION : 2026 TAXSCAN (CESTAT) 336

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chennai Bench, held that belated testing which may be affected over the passage of time cannot override contemporaneous evidence. The CESTAT ruled against the report of the Central Institute of Mining and Fuel Research

Accordingly, the bench of Vasa Seshagiri Rao (Technical Member) and P. Dinesha (Judicial Member) allowed the appeal on merits as the imported coal satisfied the exemption conditions.

Categorization does not Mention whether ‘Painted Steel Sheets’ were Galvanized or not: CESTAT Allows Appeal to Delete Redetermined Value M/s VGS Enterprises vs ThePrincipal Commissioner of Customs CITATION : 2026 TAXSCAN (CESTAT) 337

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, held that ‘painted steel sheets’ were not described completely as there was no mention whether they were galvanized or not. The CESTAT noted that it is not a case of misdeclaration and allowed the appeal.

Under these circumstances, the order passed cannot be sustained and needs to be set aside according to the bench of Justice Dilip Gupta (President). All three appeals were consequently allowed.

CVD Exemption Under Central Excise Notification Rejected: CESTAT Rules Washed Manganese Ore as ‘Concentrate’ M/s Hira Power & Steels Ltdvs Commissioner of Customs Visakhapatnam CITATION : 2026 TAXSCAN (CESTAT) 338

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, rejected claims for exemption from Countervailing Duty (CVD) under Central Excise Notification No. 04/2006-CE, holding that imported manganese ore, which had undergone washing, sizing, and removal of waste, constituted “concentrate” and not “ore.”

The bench of A K Jyotishi and Angad Prasad held that “Once the process is deemed manufacture under Chapter Note 4, concentrates fall outside the scope of Notification No. 04/2006-CE, which exempts only ores.”

CENVAT Credit on Cryogenic Storage Tanks and Fabrication Inputs Recognised as Capital Goods: CESTAT M/s Ellenbarrie Industrial GasesLtd vs Commissioner of Central Excise Visakhapatnam - II CITATION : 2026 TAXSCAN (CESTAT) 339

In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, set aside the demand raised and allowed Cenvat Credit on Cryogenic Storage Tanks and associated inputs used for providing output services such as erection, commissioning, and supply of tangible goods.

The bench of A.K. Jyotishi and Angad Prasad observed that cement and bars used for foundations were specifically excluded under CCR and thus not eligible, and welding electrodes were accepted as eligible inputs. Also held that the penalty was also not imposable and the demand did not survive either on merits or on limitation, except for cement and bars used for foundation, but even that part was beyond the normal period.

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