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 28th 2026 to April 03rd 2026.

Classification Of SEZ Supplies as Dutiable Goods For Personal Use Unsustainable: CESTAT Sets Aside ₹82.78 Cr Demand on Dell India

M/s.Dell International ServicesIndia Private Ltd vs The Principal Commissioner of Customs

CITATION : 2026 TAXSCAN (CESTAT) 340

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chennai Bench has set aside a demand of ₹82.78 crore observing that the supply of laptops, desktops, and monitors from a SpecialEconomic Zone (SEZ) to Domestic Tariff Area (DTA) customers cannot be considered as dutiable goods for personal use.

The Tribunal has also held that the Department has not been able to prove misclassification which led it to allow the appeal.

Service Tax Notice u/s 73 Unsustainable When Liability already Declared in ST-3 Returns: CESTAT

M/s K. D. Merchants Pvt. Ltd vsCommissioner of Central Goods & Service Tax

CITATION : 2026 TAXSCAN (CESTAT) 341

The Customs, Excise & Service Tax Appellate Tribunal Allahabad Bench while allowing the appeal,quashed the service tax demand under Section 73(1) of the Finance Act, 1994. The Tribunal held that the issuance of show cause notice under Section 73(1) of the Act is unsustainable if the liability is already declared under the ST-3 return.

The Tribunal also held that penalty under Section 77(1)(d) cannot be imposed for delay in filing returns as specific provisions are made for payment of fees under Section 70. Accordingly,the impugned order was set aside, and the appeal was allowed.

Payment of Duty under Protest for Assessed Bills of Entry cannot be treated as 'Orders' or 'Decisions' in Appeal Procedure: CESTAT

Ingram Micro India P. Ltd. vsCommissioner of Customs

CITATION : 2026 TAXSCAN (CESTAT) 342

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, held that payment of duty under protest for assessed bills of entry (B/E) cannot be treated as ‘orders’ or ‘decisions’ in the appeal procedure. Finally, the tribunal rejected 38 out of total 41 appeals and allowed the other 3.

Conclusively, it was held that Section 128 provides for filing of appeal before the Commissioner (Appeals) and only any ‘decision’ or ‘order’ passed by Customs officer lower than a Principal Commissioner or Commissioner of Customs may be appealed. S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) found no substance in the submission that the appellants had paid the duty under protest in respect of the assessed B/Es and the protest payment should be taken as a challenge to the assessment and held that 38 remaining appeals were not maintainable as abovementioned.

No Time Limit for Amending Scheme Codes in Shipping Bills During Transition Period: CESTAT Sets Aside Rejection of Request, Allows Appeal

Sigma Exports vs Commissioner ofCustoms

CITATION : 2026 TAXSCAN (CESTAT) 343

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Mumbai Bench, allowed an appeal and held that the rejection of a request for amendment of Shipping Bills (S/Es) with respect to scheme codes was illegal as transition period of schemes has no time limits for requesting amendments or corrections to S/Es. CESTAT set aside the rejection order.

The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) finally opined that that the rejection of the request for conversion of the scheme code in the S/Bs from ‘Drawback’ scheme having Scheme code No. “19” to other scheme of ‘Drawback & RoSCTL’ having Scheme code No. “60”, is liable to be set aside, as the same does not stand the legal scrutiny. Accordingly, the appeal was allowed.

Service Tax Cannot Be Demanded Without Verifying RCM Payment by Recipient: CESTAT Remands

M/s Varun Transport vsCommissioner of CGST & Central Excise, Nagpur

CITATION : 2026 TAXSCAN (CESTAT) 344

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that service tax cannot be demanded without verifying whether the liability has already been discharged by the service recipient under the Reverse Charge Mechanism (RCM).

In view of these findings, the tribunal set aside the impugned order and remanded the matter back to the original authority for fresh adjudication after verification and after giving opportunity of hearing to the appellant. The appeal was allowed by way of remand.

Full CENVAT Credit Admissible on Rule 6(5) Services Even If Used for Exempt Goods: CESTAT in Baxter India Case

Baxter (India) Private Limited vs Commissioner of Customs

CITATION : 2026 TAXSCAN (CESTAT) 345

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that full CENVAT credit is admissible on specified input services under Rule 6(5) of the CENVAT Credit Rules, 2004, even when such services are used for both dutiable and exempt goods.

The tribunal pointed out that Commissioner made mistake by applying Rule 6(3). It also explained that assessee already reversed some credit with interest, which can be considered under law. Finally, the Tribunal set aside the demand, interest and penalty, and allowed the appeal in favour of the assessee.

Transportation of Goods to Customers’ Premises is ‘Input Service’: CESTAT Allows CENVAT Credit on GTA Services

M/s Gnat Foundry Pvt Ltd vs Commissioner of Central Excise & CentralGST, Kolhapur

CITATION : 2026 TAXSCAN (CESTAT) 346

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, allowed an appeal wherein it was decided that transportation of goods to customers’ premises is an ‘input service’.

Ajay Sharma (Judicial Member) accordingly held that the GTA service availed for outward transportation of finished goods up to the customer’s premises qualifies as input service under Rule 2(1) of CENVAT Credit Rules, 2004 and the appellant has rightly availed the CENVAT Credit. The previous order was set aside and the appeal was allowed.

No Service Tax on Individuals providing Transportation using Own Vehicles: CESTAT Appreciates Documentary Evidence

M/s. Arjun Chandra Barman vs Commissioner of C.G.S.T. and Central Excise

CITATION : 2026 TAXSCAN (CESTAT) 347

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, appreciated documentary evidence and held that service tax is not leviable on individuals who are providing transportation using their own vehicles.

K. Anpazhakan (Technical Member) held that the transportation service rendered in the present case is exempt from the levy of Service Tax as per Entry No. (p) of the Negative List of Services under Section 66D. The order was set aside and the appeal was allowed, accordingly.

Imported Tea Found with Seeds Only after Testing, No Wilful Misdeclaration found: CESTAT Allows Appeal

M/s. Newby Teas Overseas Private Limited vs Commissioner of Customs(Port)

CITATION : 2026 TAXSCAN (CESTAT) 348

The Customs, Excise and Service Tax AppellateTribunal ( CESTAT ), Kolkata Bench, allowed an appeal and held that only after sampling and examination it was found that the tea had seeds. CESTAT noted that there was no intent for misdeclaration.

Therefore, it cannot be held that the responsibility for importation for the tea with seeds lies with the appellant. Finally, the penalty imposed under Section 112(a)(i) was set aside and the appeal was allowed.

Service Tax cannot be Demanded on mere Difference in Form 26AS/ITR and ST-3 Returns without Independent Evidence: CESTAT

M/s. Adventure Gurudongma vs Commissioner of C.G.S.T. and Central Excise

CITATION : 2026 TAXSCAN (CESTAT) 34

The Customs, Excise and Service Tax AppellteTribunal (CESTAT), Kolkata Bench, held that the sole basis for demanding service tax cannot be the difference in Form 26AS/ITR and ST-3 Returns without independent evidence.

Accordingly, the demand raised and confirmed was set aside on merits as well as on limitation and the appeal was allowed.

Transaction Value not to be Rejected without Investigation as per Custom Valuation Rules: CESTAT Notes Improper Procedure, Allows Appeal

M/s Anjum International vs Commissioner of Customs

CITATION : 2026 TAXSCAN (CESTAT) 350

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, allowed an appeal, noting improper procedure as per Custom Valuation Rules wherein the transaction value was rejected without investigation.

R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member) found that no reason as to why NIDB data should be directly applied has been provided by the Department. Further, since the Department has failed to follow CVR the order has been set aside and the appeal has been allowed, accordingly.

Amount Deposited at Department’s Insistence for Mistaken 'Excise Duty' Liability is not ‘Duty’: CESTAT Allows 12% Interest on ₹20L Refund

M/s. Neha Power Tech (I) Pvt. Ltd vs Commissioner of C.G.S.T. andCentral Excise

CITATION : 2026 TAXSCAN (CESTAT) 351

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, allowed a 12% interest on refund wherein the amount deposited for mistaken ‘excise duty’ was at the insistence of the department and was not deposited voluntarily.

K. Anpazhakan (Technical Member) found merit in the arguments and cases cited by the appellant’s counsel and held that the appellant is eligible for interest on the amount refund, at the rate of 12% from the date of deposit during the course of investigation till the date of refund. The bench relied on M/s Harrisons Industries v. Commissioner of CGST and Central Excise, Kolkata North (2025) wherein an identical issue was dealt with.

Relief for Ashok Leyland: CESTAT Holds Sale Through Regional Offices Not ‘Trading’, Sets Aside Excise Demand

M/s. Ashok Leyland Limited vs Commissioner of GST and Central Excise

CITATION : 2026 TAXSCAN (CESTAT) 352

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that sale of goods through Regional Sales Offices cannot be treated as “trading” and set aside the excise demand raised.

Accordingly, the tribunal set aside the impugned orders and allowed the appeals filed by the appellant with consequential relief.

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