CESTAT WEEKLY ROUND-UP [June 23 to June 28, 2025]

M/s. Raj Brothers Shipping Pvt. Ltd. vs Commissioner of Customs (Import) CITATION : 2025 TAXSCAN (CESTAT) 692

The Tribunal observed that its role in disciplinary matters is limited and does not extend to substituting its own view for that of the original authority.The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in its recent ruling reaffirmed that the appellate intervention is not warranted unless the decision of the original authority is found to be unsupported by evidence, illogical, or suffering from procedural impropriety.

The tribunal relied on the supreme court's decision in the case of Parma Nanda vs. State of Haryana (1989) and State Bank of India vs. Samarendra Kishore Endow (1994) and held that the tribunal is not expected to interfere with the decision unless the findings are not based on any evidence, are illogical or suffer from procedural impropriety or are shocking to the conscience of the court.

Win for Samsung: CESTAT Classifies Lithium-Ion Batteries Used in Mobile Phones as 'Parts', Attracting 12% GST instead of 28%

M/s Samsung India Electronics Pvt. Ltd. vs Principal Commissioner of Customs CITATION : 2025 TAXSCAN (CESTAT) 695

The New Delhi Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that lithium-ion batteries imported for use in the manufacture of mobile phones are to be treated as “parts” of mobile phones and are eligible for Integrated Goods and Services Tax (IGST) at 12%, not 28% as claimed by the department.

The tribunal rejected the department’s argument that use-based classification was not possible, holding that the phrase “for manufacture” includes goods intended for such use. It also disagreed with the view that the IGST Rate Notification was an exemption notification, clarifying instead that it was a taxing notification, where ambiguity must be resolved in favor of the taxpayer.

Declared Import Value of Melamine from China Not Fraudulent: CESTAT Quashes ₹64 Lakh Anti-Dumping Duty Demand

M/s Goldstar Glasswares Pvt. Ltd. vs Principal Commissioner of Customs CITATION : 2025 TAXSCAN (CESTAT) 702

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the declared import price of melamine from China was above the prescribed threshold and not fraudulent, thereby quashing the Rs. 64 lakh anti-dumping duty demand raised by the customs department.

The counsel further pointed out that the department had issued the show cause notice more than two years after seizing the goods, despite having full knowledge of the transaction. They contended that the delay could not be justified by alleging suppression, especially when the entire transaction was transparent.

Trucks Used to Smuggle Vietnamese Pepper via Nepal Without Owner’s Knowledge: CESTAT Quashes Redemption Fine

Vinod Kumar Agarwal vs Commissioner of Customs (Preventive) CITATION : 2025 TAXSCAN (CESTAT) 706

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a truck used in the smuggling of Vietnamese black pepper via Nepal could not be confiscated or penalized when the owner had no knowledge of the smuggling activity.

The appellant’s counsel argued that he had no knowledge that the goods carried in the truck were smuggled. They submitted that the truck was handed over to a driver for a transportation job and that the appellant was not involved in the loading or documentation of the consignment. They claimed to have acted only as a transporter and was paid freight charges. He further argued that no evidence was produced by the department to show that he had any involvement or intent to participate in the smuggling.

CESTAT Finds No Evidence of F-Card Misuse After CHA Suspension; Sets Aside Revocation and Penalty

Shyamal Kumar Ghosh vs Principal Commissioner of Customs (Airport & ACC Commissionerate)CITATION : 2025 TAXSCAN (CESTAT) 705

 The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) set aside the revocation of the assessee’s F-Card and the ₹50,000 penalty, holding that there was no evidence of misuse after the suspension of the Customs House Agent (CHA) firm’s licence.

The appellate tribunal observed that the imports in question were handled by M/s. P.R. Logistics, and the assessee played only a minor role. The allegations against him were based only on a statement from an importer, and no solid evidence was presented.

PVC Regrind Not Restricted Waste: CESTAT Classifies It as Freely Importable

M/s. Akshaya Steels vs The Commissioner of Customs CITATION : 2025 TAXSCAN (CESTAT) 708

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that PVC Regrind is not classifiable as restricted plastic waste or scrap and thus is freely importable under the applicable Foreign Trade Policy.

The appellant's counsel argued that the PVC Regrind was a reprocessed material used in manufacturing and fell under Heading 3904, which allows for free import. They submitted a test report from CIPET confirming that the material was a single thermoplastic substance and not plastic waste or scrap. It further argued that the product was declared accurately in the Bills of Entry, and the classification as waste was incorrect and unsupported by evidence.

Works Contract Not Taxable Under Commercial or Industrial Construction Services :CESTAT

M/s Srishti Interiors vs Commissioner of Service Tax CITATION : 2025 TAXSCAN (CESTAT) 707

The Chandigarh Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that works contract services provided by the assessee could not be taxed under the category of Commercial or Industrial Construction Services.

The assessee counsel argued that the order was not justified as it did not consider the facts properly. He said the delay in paying service tax was due to the proprietor being hospitalised after a serious car accident. Since the tax and interest were paid before the show cause notice, he claimed no notice was needed under Section 73(3) and penalties should not have been imposed.

14-Year-Old Service Tax SCN yet to be Adjudicated: CESTAT Quashes Subsequent Statements of Demand

Kiran Gems Pvt. Ltd vs Commissioner of Service Tax-IV CITATION : 2025 TAXSCAN (CESTAT) 709

In a recent judgment, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed a series of subsequent Service Tax demand notices issued following a service tax show-cause notice (SCN), holding that the Statements of Demand could not stand since the original Show Cause Notice (SCN) dated March 28, 2011 had not been adjudicated.

On this basis, CESTAT set aside the impugned order of March 22, 2016 while directing the original authority to adjudicate the March 28, 2011 SCN together with the subsequent SCNs of November 19, 2011, October 12, 2012 and October 28, 2013, all after providing Kiran Gems a reasonable opportunity of personal hearing.

Rebate of Swachh Bharat Cess on Export Services Permissible Even Without CENVAT Credit Mechanism: CESTAT

Teleperformance Global Services Pvt Ltd vs Commissioner of Central Goods & Service CITATION : 2025 TAXSCAN (CESTAT) 710

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that rebate of Swachh Bharat Cess (SBC) on input services used for export of services is permissible even though SBC is not part of the CENVAT credit mechanism.

The department filed an appeal challenging the rebate allowed, while the appellant filed a cross-appeal against the partial rejection. The Commissioner (Appeals) remanded the case for re-examination of several issues including the nature of input services, limitation, applicability of the rebate notification, and whether the services constituted intermediary services.

Call Centers Providing Direct Services Are Not Intermediaries Under Service Tax: CESTAT

Teleperformance Global Services Pvt Ltd vs Commissioner of Central Goods & Service CITATION : 2025 TAXSCAN (CESTAT) 710

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that call centers providing services on their own account are not intermediaries under service tax law.

The appellant's counsel argued that the services were provided on a principal-to-principal basis, directly to foreign clients, and not on behalf of anyone else. They pointed out that the same issue had been settled in their favor in earlier CESTAT rulings, which held that call centers and BPOs are not intermediaries if they act on their own account. The counsel also cited CBEC Circular No. 334/1/2012-TRU, which clarified that service providers acting on their own account do not fall under the definition of intermediary.

Appellant not expected to Correlate Imports-Exports with whom License was Originally Issued: CESTAT in Relief to Volvo India

M/s.Volvo India Private Ltd. vs The Commissioner of Customs CITATION : 2025 TAXSCAN (CESTAT) 711

In a significant relief to Volvo India Pvt. Ltd., the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has ruled that a transferee of a Duty-Free Import Authorization (DFIA) license is not expected to correlate its imports with the exports made by the original license holder. The Tribunal set aside the denial of customs duty exemption amounting to several lakhs, restoring the benefit to the appellant.

After hearing arguments from both sides, the Tribunal held that there was no legal basis to impose such a restriction. The DFIA license in question explicitly permitted the import of “internal combustion engine complete” without specifying its application to any particular type of vehicle. The Tribunal observed that neither the authorization itself nor Notification No. 98/2009 required the imported goods to match the category of goods exported by the original license holder

CESTAT says Income Tax Data Alone Insufficient, Excludes Value of Goods from Taxable Service while quashing Service Tax Demand, Penalties

M/s S. I. Enterprises vs Commissioner of Central Excise & CGST CITATION : 2025 TAXSCAN (CESTAT) 712

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, has held that income declared in income tax returns or reflected in TDS statements cannot, by itself, form the basis for levying service tax without proper investigation into the actual nature of the transaction. The Tribunal has set aside a service tax demand of ₹7,12,979 raised against M/s S.I. Enterprises, along with related penalties and late fees, on the grounds that the Department had erroneously treated the entire value declared in the income tax filings as consideration for taxable services.

Upon examining the invoices, the Tribunal found that goods worth ₹33,00,650 were supplied under distinct sale transactions supported by work orders and not linked to any service obligations. These were, in effect, pure trading transactions and squarely fell under the negative list category under Section 66D(e) of the Finance Act, 1994, which exempts trading of goods from service tax. The Tribunal also rejected the Commissioner (Appeals)’ argument that service tax could be imposed in the absence of VAT payment, holding that actual payment of VAT is not essential if the transaction is otherwise leviable to VAT under law. The law requires only that the transaction be capable of being taxed as a sale, not that tax must actually have been paid.

Penalty u/s 11AC(1)(c) Not Invokable in Absence of substantive evidence to Prove Deliberate Non-payment of Excise duty: CESTAT

M/s Singareni Collieries Company Ltd. vs Commissioner of Central Tax CITATION : 2025 TAXSCAN (CESTAT) 713

In a recent case, the Hyderabad bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that penalty under section 11AC(1)(c) is not invokable in the absence of substantive evidence to prove deliberate non-payment of excise duty.

CA has submitted that while they are otherwise also covered within the purview of Notification No. 12/17-CE as Cess is nothing but excise duty. However, he is now mostly arguing that in terms of amendment brought by way of Finance Act 2024, whereas the Notification 12/2017 dated 30.06.2017 has been retrospectively amended to the effect that even Clean Environment Cess was also brought under the purview of the said exemption notification subject to another additional condition stipulating that appropriate goods and service tax compensation Cess, wherever applicable, will also be payable if cleared on or after 01.07.2017 as leviable on such goods. Therefore, now the said retrospective amendment consequentially cover their goods as all the clearances effected post 01.07.2017 have suffered applicable GST as well as compensation Cess.

CESTAT upholds order denying condonation of Excise Appeal preferred after One Year

Mr. Sanjay Kumar Gupta vs Commissioner of Central Excise & Service Tax CITATION : 2025 TAXSCAN (CESTAT) 714

In a recent case of the Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the order denying condonation of the Excise Appeal which was preferred after one year.

The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only upto 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period.

Relief to Taj SATS Air Catering, No Service Tax Leviable When VAT was paid on sale of food & beverages: CESTAT

Taj Sats Air Catering Limited vs Principal Commissioner of Central Goods, Service Tax and Central Excise, Delhi SouthCITATION : 2025 TAXSCAN (CESTAT) 715

In a ruling in favor of Taj Sats Air Catering Limited, the New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable when VAT was paid on the sale of food and beverages.

The Appellant was required to pay annual lease rental to DIAL along with the royalty calculated in the manner set out in the agreement. Both these amounts were part of the consideration payable by the Appellant to DIAL for lease of premises at the airport. The said amount was recovered by DIAL by raising invoices on the Appellant, on which DIAL charged and paid appropriate Service Tax. Being cost incurred by the appellant in carrying out various transactions, the appellant recovered these charges from its customers.

No Service Tax Payable on affiliation fees collected from Affiliated colleges: CESTAT

Principal Commissioner vs M/s. Makhanlal Chaturvedi CITATION : 2025 TAXSCAN (CESTAT) 717

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) of the New Delhi bench upheld the ruling of the commissioner that service tax is not payable on affiliation fees collected from affiliated colleges and dismissed the appeal of revenue.

A two member bench of Binu Tamta, Member (Judicial) and Hemambika R. Priya, Member (Technical) found that the Commissioner (Appeals) after considering the provisions in the post negative era, analysed the nature of affiliation fees paid by the educational institutions to the appellant and also the nature of activity involved in the process of receiving affiliation fees, concluded that the same is not chargeable to service tax.

Royalty and Dead Rent Collected by State for Mining Rights Not Taxable as Services Under Finance Act: CESTAT

The Director vs Commissioner of Central GST CITATION : 2025 TAXSCAN (CESTAT) 718

The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that royalty and dead rent collected by the State Government for granting mining rights do not amount to taxable services under the Finance Act, 1994.

They also relied on the CBEC Education Guide of 2012, which clarified that such activities by the government did not constitute a taxable service. They argued that the department’s own conduct showed inconsistency, initially treating the royalty as taxable on a forward charge basis and later shifting to reverse charge after April 1, 2016.

CESTAT sets aside Excise Duty Demand based on Private Diaries and Loose Sheets

M/s. Akshaya Steel Works Pvt. Ltd. vs Commr. of Central Excise & Service Tax CITATION : 2025 TAXSCAN (CESTAT) 719

The Kolkata bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has set aside the excise duty Demand based on Private Diaries and Loose Sheets. It was viewed that mere recording of the statement of the Director multiple times from 22.11.2011 to 15.03.2012, that is much later than the visit date of 2.4.2009, does not prove that this was on account of continued investigation.

Gold Biscuit Smuggle Worth Rs. 31 Lakh: CESTAT Reduces Penalty Treating Assessee as Mere Carrier

Shri Nirbhay Kumar Upadhyay vs Commissioner of Customs (Preventive) CITATION : 2025 TAXSCAN (CESTAT) 721

The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) reduced the penalty imposed on the assessee for smuggling gold biscuits worth ₹31.34 lakh, treating him as a mere carrier.

The appellate tribunal observed that there was no evidence to show he was the actual beneficiary. Since he did not challenge the confiscation and only sought a reduction in penalty, the tribunal found it appropriate to take a lenient view.

Service Tax Not Payable on Equipment Supply Treated as Deemed Sale with VAT Already Paid: CESTAT

M/s. Mithun Samanta vs Commissioner of C.G.S.T. and Central Excise CITATION : 2025 TAXSCAN (CESTAT) 722

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that Service Tax was not payable on the supply of equipment like JCB, Hydra, and Excavator when the transaction had already been treated as a deemed sale and VAT was paid.
A single member bench comprising K.Anpazhakan (Technical Member) noted that the assessee had supplied equipment like JCB, Hydra, and Excavator to clients, and the West Bengal State Tax Department had already treated this as a ‘deemed sale’ and collected VAT. It held that since VAT had been paid, no Service Tax was payable on the same activity.

Admitted Service Tax Liability Incorrectly Recorded as ₹6.06 Lakh Instead of ₹4.53 Lakh: CESTAT Remands Matter for Re-verification

M/s. Manaksia Limited vs Commissioner of C.G.S.T CITATION : 2025 TAXSCAN (CESTAT) 723

The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for re-verification after noting that the admitted Service Tax liability was incorrectly recorded as ₹6.06 lakh instead of ₹4.53 lakh.
The appellate tribunal found this needed re-verification, set aside the order, and remanded the matter to the Commissioner (Appeals) to review the admitted amount after giving the assessee a fair hearing. The appeal was disposed of by remand.

CESTAT says Income Tax Data Alone Insufficient, Excludes Value of Goods from Taxable Service while quashing Service Tax Demand, Penalties

M/s S. I. Enterprises vs Commissioner of Central Excise & CGST CITATION : 2025 TAXSCAN (CESTAT) 724

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, has held that income declared in income tax returns or reflected in TDS statements cannot, by itself, form the basis for levying service tax without proper investigation into the actual nature of the transaction. The Tribunal has set aside a service tax demand of ₹7,12,979 raised against M/s S.I. Enterprises, along with related penalties and late fees, on the grounds that the Department had erroneously treated the entire value declared in the income tax filings as consideration for taxable services.
Upon examining the invoices, the Tribunal found that goods worth ₹33,00,650 were supplied under distinct sale transactions supported by work orders and not linked to any service obligations. These were, in effect, pure trading transactions and squarely fell under the negative list category under Section 66D(e) of the Finance Act, 1994, which exempts trading of goods from service tax. The Tribunal also rejected the Commissioner (Appeals)’ argument that service tax could be imposed in the absence of VAT payment, holding that actual payment of VAT is not essential if the transaction is otherwise leviable to VAT under law. The law requires only that the transaction be capable of being taxed as a sale, not that tax must actually have been paid.

CESTAT Classifies RMC Transportation as GTA Service, Rejects Supply of Tangible Goods Tax Demand

M/s. Namakkal South India Transports vs Commissioner of GST and Central Excise CITATION : 2025 TAXSCAN (CESTAT) 726

The CESTAT Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that services provided in relation to the transportation of Ready Mix Concrete (RMC) are classifiable under Goods Transport Agency (GTA) services and not under the category of Supply of Tangible Goods Services (STGS).

The two-member bench comprising Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao observed that the core purpose of the contracts was the transportation of RMC and not the supply of equipment. The vehicles remained under the operational control of the appellant, and the agreements did not transfer possession or effective control to the clients. The tribunal pointed out that the contracts clearly indicated that the service tax liability was on the consignors and that the appellants had issued consignment notes, even if not per consignment, which supported their claim under GTA.

Concrete Pumps at Client’s Disposal Attract Supply of Tangible Goods, Not GTA: CESTAT

M/s. Namakkal South India Transports vs Commissioner of GST and Central Excise CITATION : 2025 TAXSCAN (CESTAT) 725

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the hiring of concrete pumps amounted to the supply of tangible goods and was not classifiable under Goods Transport Agency (GTA) services.
They argued that the pricing was linked to output (i.e., cubic meters pumped), and that the entire arrangement was for making the equipment available for use, fitting the definition of Supply of Tangible Goods Service. The revenue also pointed out that certain contracts clearly mentioned the appellant’s liability to pay service tax.

Denial of CENVAT Credit for Lack of Documents on Input Services: CESTAT Remands Matter for Fresh Verification

M/s. GET & D India Pvt. Ltd. vs Commissioner of GST & Central Excise CITATION : 2025 TAXSCAN (CESTAT) 727

The Chennai Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded a matter involving denial of CENVAT credit due to lack of documents on input services, directing fresh verification by the Adjudicating Authority (AA).
It held that the assessee should be given a chance to submit the necessary documents to support its claim for Cenvat credit. The CESTAT set aside the disallowed credit, along with the related interest, penalty, and appropriation, without disturbing the credit already allowed.

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