Half-Yearly Customs, Excise and Service Tax Case Digest: CESTAT Decisions 2025 [Part II]

Non-Filing of Nil Service Tax Returns: CESTAT quashes Penalty

M/s S. I. Enterprises vs Commissioner of Central Excise &CGST

CITATION: 2025 TAXSCAN (CESTAT) 146

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that no penalty can be imposed for failing to file a NIL return.

Upon review, the tribunal bench of Judicial Member P K Choudhary concluded that the penalty imposed for failing to file a NIL return was unwarranted, as the appellant was not liable for service tax during the period in question.

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Discounts on Sale of Goods does not attract Service Tax: CESTAT in Relief to Tata Chemicals

M/s Tata Chemicals Ltd vsCommissioner of Central Excise & CGST

CITATION: 2025 TAXSCAN (CESTAT) 147

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that no service tax is applicable on discounts provided towards the sale of goods.

The tribunal held that no service tax can be imposed on such discounts, as they are directly related to the sale of goods and fall outside the scope of “services” under the Finance Act.

Service of Customs Notices, Communications and Orders to be made through Email and on Common Portal, Alongside Traditional Methods: Delhi HC

BONANZA ENTERPRISES VS THEASSISTANT COMMISSIONER OF CUSTOMS & ANR. CITATION: 2025 TAXSCAN (HC) 126

In a landmark judgment, the Delhi High Court pointed at the need for modernizing the methods of serving customs notices, communications, and orders. The decision came in response to a writ petition filed against the Assistant Commissioner of Customs and others, challenging the non-receipt of a show cause notice ( SCN ) and subsequent ex-parte proceedings.

The court ordered the Chairman of the Central Board of Indirect Taxes and Customs (CBIC) to ensure compliance with the mandate of Section 153 of the Customs Act for serving notices via email and the common portal.

Relief to Bharat Petroleum: CESTAT Rules Intermixed Special Kerosene Oil Exempt from Excise Duty When Sold for Public Distribution

Bharat Petroleum Corporation LtdVS Commissioner of CGST, Mumbai East CITATION: 2025 TAXSCAN (CESTAT) 153

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that intermixed Special Kerosene Oil ( SKO ) cleared with the intent for public distribution through the Public Distribution System ( PDS ) remains exempt from central excise duty.

The tribunal confirmed that intermixed SKO retains its exempt status when intended for public distribution. The tribunal set aside the demand orders and allowed the assessee’s appeal.

CESTAT upholds demand of Service tax on Agency Commission for promoting sale of vehicle

M/s Anand Moters Agencies Ltd VSCommissioner, Central Excise & Service Tax, Lucknow CITATION: 2025 TAXSCAN (CESTAT) 150

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) upheld the demand of service tax on agency commission for promoting sale of vehicle. Agency Commission is amount paid by MUL for promoting the sales of vehicles when a new brand/ new version of vehicles is launched and are liable to pay service tax under Business Auxiliary Services.

The Tribunal set aside the entire demand inclusive of the admitted demand which was not under challenge.A two member bench of P.K. Choudhary, Member (Judicial) and Sanjiv Srivastava, Member (Technical) observed that the High Court has remanded the matter for reconsideration of the said demand. The do not dispute the said demand in this remand proceedings as the same was never under challenge even in the appeal filed by them. They have admitted this demand of Rs 42,799/- even at the time of adjudication.

Processes of Cutting, Deburring, and Broaching on Forged Blastings Deemed Manufacturing u/s 2(f) of Central Excise Act: CESTAT

M/s. Aurangabad Auto Engineering Pvt. Ltd. vs Principal Commissioner ofCGST CITATION: 2025 TAXSCAN (CESTAT) 155

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that processes such as cutting, deburring, and broaching performed on raw materials like “Forged Blastings” which creates “Gear 4th Platina” qualify as “manufacture” under Section 2(f) of the Central Excise Act, 1944.

The tribunal held that the processes performed by the appellant were incidental or ancillary to the completion of the manufactured product aligning with the statutory definition under Section 2(f). The tribunal set aside the service tax demand and ruled that the appellant’s activities constituted manufacturing which was exempt from service tax. The appeal was allowed.

Packaging Bulk to Retail amounts to Manufacturing: CESTAT sets aside Service Tax Demands

M/s Emami Limited vs Commissioner of CGST CITATION: 2025 TAXSCAN (CESTAT) 151

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that the activity of packaging bulk goods into retail packs constitutes “manufacture” under the Central Excise Act, 1944.

The CESTAT, comprising Ashok Jindal ( Judicial Member ) and K. Anpazhakan ( Technical Member ) set aside the service tax demands and the penalties made and held that the activity of packing its bulk into retail packs amounts to manufacture, due to which no service tax is payable by the other appellants or the job workers.

Cenvat Credit Reversal on Electricity Wheeled out: CESTAT remands Matter in absence of Records

M/s Chunar Cement Factory vs Commissioner of Central Excise &Service Tax CITATION: 2025 TAXSCAN (CESTAT) 152

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) remanded the matter of cenvat Credit reversal on electricity wheeled out as there were no records about the correctness of this amount as it confirms the demand by application of 6% of the value of the electricity wheeled out.

While partly allowing appeal, the Tribunal remanded the matter to the Original Authority in case the amount is within the amount already reversed, the proceedings should be closed without any final liabilities. Shri Atul Gupta appeared for the Appellant and Smt Chitra Srivastava authorised representative appeared for the Respondent.

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Manufacturers can Claim CENVAT Credit for Capital Goods used in Exempt Intermediate Products made for Dutiable Final Goods: CESTAT

M/s. Fritzmeier Motherson Cabin Engineering Pvt. Ltd. vs Commissioner of GST and Central Excise CITATION: 2025 TAXSCAN (CESTAT) 148

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that manufacturers are entitled to claim CENVAT Credit on capital goods used in the production of exempt intermediate products when those products are ultimately used in the manufacture of dutiable final goods.

The tribunal ruled that the demand for reversal of Cenvat Credit was unsustainable and set aside the impugned order. The extended period of limitation and the imposition of penalties were also deemed unsustainable. The appellant’s appeal was allowed with consequential relief as per the law.

Customs Authorities Fail to Detail Contemporaneous Import Data for Increased CD to Company: CESTAT Remands Matter for Fair Assessment

Banaras Beads Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 157

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for fair assessment because customs authorities failed to provide detailed contemporaneous import data while increasing the customs duty ( CD ) on glass beads imported by Banaras Beads Ltd.

The orders of the Commissioner of Customs (Appeals) were set aside and the tribunal remanded the matter to the original customs authority for re-assessment directing them to share the relied-upon bills of entry with Banaras Beads Ltd and provide the appellant an opportunity to present their issue. The appeal was allowed.

Service Tax Liability on Construction Services: CESTAT Orders Recalculation Over Misclassification and Evidentiary Gaps

Creative Engineering Constructions vs Commissioner of Central TaxVisakhapatnam - I CITATION: 2025 TAXSCAN (CESTAT) 160

The Hyderabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) remanded a ₹3.32 Cr service tax case back to the adjudicating authority for recalculating the tax liability on the appellant after reviewing all documents.

The CESTAT remanded the case to the original adjudicating authority and directed that the validity of OCs be verified and that advances be received before their issuance. The tribunal also directed the authority to assess eligibility for abatements based on Value-Added Tax compliance and recalculate the service tax liability considering the payments already made.

Digital Still Image Video Cameras Eligible for BCD Exemption under Notification if Parameters Fall below Threshold: CESTAT

M/s.Fujifilm India Pvt. Ltd vs The Commissioner of Customs (Airport& Cargo) CITATION: 2025 TAXSCAN (CESTAT) 149

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that Fujifilm India Pvt. Ltd. was eligible for exemption from Basic Customs Duty ( BCD ) on imported “Digital Still Image Video Cameras” under Notification No. 25/2005, as amended.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) reviewed the submissions and the precedent set by the Nikon India case. The bench found no ambiguity in the language of Notification No. 25/2005 (as amended) and observed that the appellant successfully proven compliance with the notification’s parameters.

Notification does not Mandate IT Software Service Registration for Claiming CENVAT Credit Refund on Undisputed Exports: CESTAT

Syx Automations India Private Limited vs C.S.T.-Service Tax – Ahmedabad CITATION: 2025 TAXSCAN (CESTAT) 154

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has confirmed that registration under “Information Technology Software Service” is not a mandatory requirement for claiming a refund of CENVAT credit under Notification No. 27/2012-C.E. (N.T.) if exports made undisputedly.

The tribunal observed that procedural conditions in refund notifications should not override substantive rights granted by law. The tribunal set aside the Commissioner (Appeals) order and remanded the matter to the adjudicating authority for document verification and reprocessing the refund within two months. The appeal was allowed.

‘Existing Law’ u/s 142(4) of GST Act is Finance Act: CESTAT allows Refund of Service Tax Paid Pre-GST on Input Services for Post-GST Exports

M/s. Sheetal Manufacturing Company Pvt. Ltd. vs Assistant Commissionerof CGSTCITATION: 2025 TAXSCAN (CESTAT) 156

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed the refund of Service Tax paid on input services during the pre-Goods and Services Tax (GST) era, for goods exported after the implementation of the GST regime.

The two member bench of Dr. Suvendu Kumar Pati (Judicial member), referring the statutes and the orders, observed that “This being the command of law, his finding that received concurrence of the Commissioner (Appeals) that provision of existing law would mean CGST Act is erroneous and contrary to the provision of law and therefore, Claimant’s/Appellant’s filing of refund applications was made appropriately under the provisions of Finance Act read with Rule, 5 of the CENVAT Credit Rules, 2004, that can’t be said to be not maintainable.”

Goods wrongly loaded could not be Exported without clearance by Customs: CESTAT

M/s. Samudera Shipping Line(India) Pvt. Ltd. vs Commissioner of Customs (Port)CITATION: 2025 TAXSCAN (CESTAT) 159

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning the addition of Rs. 24,89,121 as gross receipts of commission income under Section 144 of the Income Tax Act, 1961, for fresh adjudication.

The single-member bench comprising Dr. Manish Borad (Accountant Member) observed that the NFAC failed to fulfill its statutory obligation under Section 250(6) of the Income Tax Act which mandates appellate authorities to adjudicate appeals by stating points for determination, decisions, and reasons.

Penalty u/r 209A of Central Excise Limited to Individuals Dealing with Confiscable Goods, Not Applicable to Partnership Firms: CESTAT

Taher & Company vs Commissioner of C.E. & S.T.-Daman CITATION: 2025 TAXSCAN (CESTAT) 158

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that penalties under Rule 209A of the Central Excise Rules, 1944, cannot be imposed on partnership firms as the rule applies only to individuals dealing with confiscable goods.

Citing precedents such as Woodmen Industries, the tribunal held that partnership firms could not be penalized under Rule 209A of the Central Excise Act. The tribunal also observed that the adjudicating authority’s order was non-speaking and failed to address submissions raised by the appellants.

Non-Compliance with Section 9D, Statements Without Cross-Examination Unsustainable for Demand: CESTAT

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 161

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata Bench held that statements without cross-examination are unsustainable for demand as there has been non- compliance with Section 9D of the Central Excise Act, 1944.

The bench noted that the Delhi High Court in the case of Flevel International Vs. Commissioner of Central Excise-2016 (332) ELT 416(Del), had held that the denial of an opportunity of cross-examination of a witness whose statements have been relied upon in the adjudication order would vitiate the order of adjudication.

The CESTAT comparing Ashok Jindal ( Judicial Member ) and Rajeev Tandon ( Technical Member ) set aside the impugned order and ruled in favour of the appellant.

CESTAT Dismisses Clandestine Removal Charge due to Lack of Supporting Evidence

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 161

The Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata held that serious allegation cannot be made merely on assumption, in the absence of detailed supporting evidence and thus dismissed the charge of clandestine removal.

The bench noted that although Shri Sati Ram’s statement was recorded and documents were seized from his possession, further investigation is needed, including examining suppliers, buyers, transporters, and commission agents listed in the records and thus the authenticity of these documents remains questionable.

The CESTAT held that due to the lack of proper investigation and corroborative evidence, the allegations against the appellants regarding clandestine manufacture and clearance of goods are unsustainable

Time Barred SCN: CESTAT quashes Service Tax Demand

New Age Laminators Private Limited VS Commissioner of Central Goods AndService Tax & Central Excise &-Alwar CITATION: 2025 TAXSCAN (CESTAT) 162

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that a time-barred Show Cause Notice ( SCN ) invalidates the confirmation of a service demand proposed therein.

The bench, comprising Judicial Member Rachna Gupta and Technical Member Hemambika R. Priya reiterated the obligation of the Central Excise Officer to scrutinize filed returns, conduct necessary assessments under Section 72, and issue an SCN under Section 73 within the prescribed time limit. Failure to do so, leading to any tax escaping assessment, places the responsibility squarely on the officer.

Municipal Corporation Engaged in Commercial Activities liable to Service Tax: CESTAT

M/s. Bidhannagar Municipality VS Commr. of Service Tax, Kolkata CITATION: 2025 TAXSCAN (CESTAT) 165

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that municipal corporations engaged in commercial activities are liable to pay service tax.

The appellant made submissions that the corporation undertook constitutional function and their services were not covered under the definition of service tax. Despite the submission, the department confirmed the demand and levied a penalty on the appellant. Aggrieved by the order, the appellant filed an appeal before the Tribunal.

Taking into account that the appellant is a government body, the tribunal set aside the penalty levied by the department. The appellant’s appeal was partially allowed.

Relief for TATA Steel: CESTAT Declares Excise Demand Notice Issued After 9.5 Years as Time-Barred, Exceeding 5 Years Limit

Tata Steel Limited vs Commissioner of CGST & CX, Bhubaneswar CITATION: 2025 TAXSCAN (CESTAT) 164

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the demand notice issued after 9.5 years exceeding the time limit of 5 years is time-barred relieving TATA steel from excise duty.

The two-member bench comprising Ashok Jindal (Judicial Member) and Rajeev Tandon (Technical Member) observed that the High Court of Odisha directed the revenue to complete proceedings within 4 months.

The tribunal observed that no proceedings were initiated within the said time. The tribunal further observed that the maximum time limit to issue notice is 5 years if there was any evasion of duty by the way of suppression of facts and in the present case the notice was issued after 9.5 years.

Revenue Neutrality and Procedural Lapses: CESTAT quashes Central Excise Duty and Penalty Orders

M/s Allied Resins and Chemicals Limited vs Commissioner of CentralExcise CITATION: 2025 TAXSCAN (CESTAT) 166

The Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has quashed central excise duty and penalty orders due to revenue neutrality and procedural lapses.

Thus, the CESTAT bench, consisting of Ashok Jindal ( Judicial Member ) and Rajeev Tandon ( Technical Member ), only confirmed a conceded demand of Rs. 89,855 for scrap clearance but set aside all other demands and penalties. The bench held procedural lapses, revenue neutrality, and the absence of malafide intent invalidated the department’s claims.

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Statutory Authority’s Sovereign Functions exempt from Service Tax: CESTAT quashes Rs. 28 Cr. Demand for lack of evidence and limitation by time bar

Asansol Durgapur Development Authority vs Commissioner of CGST &Central Excise, Bolpur CITATION: 2025 TAXSCAN (CESTAT) 167

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) dismissed the service tax demand of Rs. 28.39 crore due to insufficient evidence and limitations due to the time bar and also held that statutory authority’s sovereign functions are exempt from service tax.

The bench noted that it was difficult to establish that the ADDA had suppressed the facts to evade tax as it was a statutory authority. The bench, by relying on the figures taken for quantification of demand, has derived the income and expenditure statement and balance sheet of ADDA, which shows that all the details have been disclosed in the records.

Relief to TATA Beverages: CESTAT Rules SCN Issued in 2010 for Alleged IPR Service Invalid as Business Transfer Details Disclosed in 2005

M/s. Tata Global Beverages Ltd. vs Commissioner of Service Tax CITATION: 2025 TAXSCAN (CESTAT) 168

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the Show Cause Notice (SCN) issued in 2010 for alleged IPR service was invalid citing that the business transfer details were disclosed in 2005.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the transfer details were disclosed to the department in 2005 but the notice was issued to the appellant in 2010. Despite the business transfer information available to the department, they invoked an extended period and there was no suppression of facts.

CESTAT upholds Service Tax Refund Claim Rejection on Course by YCMOU

MAHARASHTRA KNOWLEDGE CORPRATION LTD vs COMMISSIONER SERVICE TAX-I PUNEF- Wing CITATION: 2025 TAXSCAN (CESTAT) 170

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has affirmed the denial of a refund claim for the period between April 2014 and September 2014. The claim pertained to service tax remitted for an educational program that only later, in March 2015, received recognition from the Yashwantrao Chavan Maharashtra Open University (YCMOU).

Nevertheless, the refund applications were disallowed because recognition for the relevant time frame had not yet been granted by the Open University, whose agreement was finalized only on March 30, 2015. By that point, student fees had already been collected. Additionally, the Tribunal deemed the request time-barred, given that relevant documents were submitted on June 8, 2015, rather than March 30, 2015. This contradicted the appellant’s contention that an online refund application had been filed in April 2015, which would have been within the statutory deadline.

No Confiscation of Seized Gold Merely for Invalid LOA: CESTAT

M/s Encee International NSEZ vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 169

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that gold cannot be confiscated solely on the ground of an invalid Letter of Approval (LOA).

The Third Member, examining Rule 47 of the SEZ Rules, 2006, observed that this provision applies to the removal of goods from an SEZ to the Domestic Tariff Area (DTA). Since there was no actual or attempted transfer of gold from the SEZ to the DTA, Rule 47 was irrelevant. Instead, the case revolved around unauthorized manufacturing within an SEZ unit due to the absence of a valid LOA—an issue squarely under the purview of the Development Commissioner rather than Customs.

Dept. Fails to Verify Document Veracity with Key Parties like Suppliers, Buyers, Transporters, Agents: CESTAT Rules Investigation Faulty

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner ofCentral Excise & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 171

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled the investigation faulty due to the department failing to verify the veracity of documents with key parties like suppliers, buyers, transporters, agents etc,.

On the other hand, the counsel for the revenue submitted that the documents were recovered from the employees of the appellant company. The counsel also contended that Sati Ram made statements that these documents belong to the appellant company. Therefore the counsel for the revenue justified the demand against the appellants.

Commissioner Denies Cross-Examination Opportunity: CESTAT Quashes Excise Demand Order for Violation of S. 9D of CEA

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner ofCentral Excise & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 171

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Quashed the order of the commissioner for denying cross-examination opportunity citing that it is in violation of section 9D of the Central Excise Act, 1944.

Therefore, the tribunal relying on the judgment of the Supreme Court in Andaman Timber Industries and also the judgment of the High Court of Delhi in Flevel International held that the statements recorded in the investigation without Examination in Chief and absence of Cross-examination were not sustainable in law.

Cost of Parts Supplied by Principal Manufacturer not Part of Job Worker’s Assessable Value: CESTAT

Electronic Instrumentationand Control vs Commissioner of Central Excise & ST CITATION: 2025 TAXSCAN (CESTAT) 172

The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ),Ahmedabad Bench, delivered a significant ruling, holding that assessable value of Job Work excludes costs of parts supplied by the principal manufacturer in the case involving Electronic Instrumentation and Control (Appellant) and the Commissioner of Central Excise and Service Tax, Ahmedabad (Respondent).

This judgment provides clarity for job workers and principal manufacturers regarding the valuation of excisable goods. It reiterated the importance of following Modvat/CENVAT credit provisions and ensuring that the supply chain remains compliant without unnecessary tax burdens.

Export of Counterfeit ‘VimalGutkha’ in Violation of Customs Act: CESTAT Reduces Penalty to ₹10 Lakh

Shri Sanjay Prabhakar vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 173

The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reduced the penalty to ₹10 lakh and set aside another penalty under Section 114AA of the Customs Act, 1962,for the export of counterfeit ‘VimalGutkha.’

A single-member bench comprising Sanjiv Srivastava (Technical Member) considering that proceedings against two officers had been dropped due to innocent negligence, the penalty was reduced to ₹10,00,000. Further, the penalty under Section 114AA was set aside, as the assessee only filed shipping bills based on provided documents and was not responsible for document forgery.

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Dual Custodianship on same good Cannot be Granted: CESTAT Sets Aside penalty Imposed under Customs Act

Messrs Kesar Enterprise Ltd vs C.C.-Kandla CITATION: 2025 TAXSCAN (CESTAT) 174

The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that there cannot be dual custodianship of the same goods and set aside the Penalty imposed under Customs Act, 1962.

The single bench of Somesh Arora (Judicial Member) has observed that a licensed custodianship cannot be granted along with other authority i.e. port authority and viewed that there cannot be dual custodianship of the same goods. Therefore the legal position brought out in letter dated 07.12.2011 of the DC Customs is proper and legal and supersedes any license which was given contrary to position stated in this letter even if earlier.

Cenvat Credit Can Be Utilised for Payment of Duty in Case of Delayed Excise Duty: CESTAT

M/s Aman Pipes (P) Ltd vs Commissioner, Central Excise & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 176

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that cenvat credit can be utilised for payment of duty in case of delayed excise duty and directed the excise department to refund the interest.

The tribunal determined that the appellant’s use of the Cenvat credit was appropriate, and as a result, no interest was due on the sum paid. Therefore, from the date of the Supreme Court’s final order to the date of payment, the appellant is entitled to a refund of the amount they paid in interest on the duty that was delayed, with a rate of 12% annually.

Co-Noticee can apply for waiver of Penalty under Sabka Vishwas Scheme 2019 If main Noticee Issued Discharge Certificate: CESTAT

SHRI RAVI SESWANI VS COMMISSIONER, CGST & CENTRAL EXCISE CITATION: 2025 TAXSCAN (CESTAT) 175

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the co-noticee is eligible to seek waiver of penalty under Sabka Vishwas Scheme, 2019 if main noticee is issued discharge certificate.

In light of the relief available to them under section 124 (i)(b) of the Finance Act, 1994, the appellant would have paid “nil” rate of duty if they had applied under the SVLDR Scheme, the tribunal held, even though the appellant had not filed the declaration after the main noticees had received the Discharge Certificate towards the duty liability.

Services Rendered to Construction of Roads Were not Exigible to Service Tax: CESTAT

M/S AADITYA CONSTRUCTIONS vs PRINCIPAL COMMISSIONER OF CGST-RAIPURCHHATTISGARH CITATION: 2025 TAXSCAN (CESTAT) 177

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that services rendered to construction of roads were not exigible to service tax quashed the service tax demand under Reverse Charge Mechanism (RCM) on roads transport agency services on individual truck owners services.

The bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has held that demand of service tax under reverse charge mechanism on roads transport agency services on the services rendered by the individual truck owners also cannot be sustained. Since the demand of service tax cannot be sustained, the demand of interest and penalty also need to be set aside.

CESTAT Allows Refund Claims: Holds Procedural Lapses Can’t Deny Exemption Benefits

M/s. Signal and Systems India Pvt. Ltd. vs Commissioner of GST &Central Excise CITATION: 2025 TAXSCAN (CESTAT) 178

In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in Chennai has allowed refund claims of a taxpayer, holding that procedural lapses cannot deny exemption benefits.

The tribunal noted that while the appellant had cleared goods for an ADB-financed project and were eligible for exemption under the given Notification, they could not produce certificates from ADB or other required documents at the time of clearance due to procedural delays.

In conclusion, the CESTAT’s decision is a welcome move and provides relief to taxpayers who have been denied exemption benefits due to procedural lapses. The ruling is also a reminder to the revenue authorities to follow the principles of natural justice and not deny benefits to taxpayers on technical grounds.

No Service Tax Payable by Standard Chartered Bank India on Allocation of General Administrative Expenses by Head Office: CESTAT

Standard CharteredBank vs Commissioner of CGST & CX Mumbai South CITATION: 2025 TAXSCAN (CESTAT) 180

The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable by Standard Chartered Bank India on allocation of head office executive and general administrative expenses’ by the head office.

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Relief to Axis Bank: CESTAT Allows CENVAT Credit on Tax Paid on Premium Mandatorily Required for Functioning as Bank

Axis Bank Ltd vs Commissioner of Service Tax - V CITATION: 2025 TAXSCAN (CESTAT) 179

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has granted Axis Bank CENVAT Credit on taxes paid on premiums that are necessary for banks to operate.

The Reserve Bank of India (RBI) oversees banks, and the bench of C J Mathew (Technical Member) and Ajay Sharma (Judicial Member) has noted that CENVAT credit is available on tax paid on premiums that are mandatory for banks to operate. In accepting the appeal, the tribunal found that the insurance service provided to banks by the Deposit Insurance Corporation is a “input service” and that banks are permitted to use the Cenvat credit of service tax they have paid for this service to provide “output services.”

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Service Tax SCN turns Invalid if Assessee Paid Tax Liability Along with Interest before issuance of SCN: CESTAT

Jayhind Buildcon Pvt Ltd vs Commissioner of C.E. & S.T.-Rajkot CITATION: 2025 TAXSCAN (CESTAT) 181

In a recent case, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held a show cause notice (SCN) demanding Service Tax turns invalid if the assessee had paid tax liability along with interest before issuance of SCN.

A show cause notice dated 31.08.2018 demanding the service tax of Rs. 40,65,565/-, for the same period as audit, by invoking extended period of limitation, was issued. The appellant had already deposited service tax amounting to Rs. 40Lakh as duty noted in the show cause notice and interest amounting to Rs. 6,34,560/- before issuance of show cause notice. The adjudicating authority has confirmed demand of Rs. 46,65,565/- and have also imposed mandatory penalty of Rs. 40,65,565/- under Section 78 of the Finance Act, 1994, against which the appellant filed an appeal before the Commissioner (Appeals) who has rejected the appeal.

Rejection of Application for Brand Rate for Exported Goods Under Duty Drawback Rules solely on Limitation: CESTAT Remands Matter for Reconsideration

John Deere India Pvt Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 182

In a recent case on the issue of rejection of an Application for brand rate for exported goods under duty drawback rules solely on limitation, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) remanded the matter for reconsideration.

As the deemed date of extension stands altered owing to its necessity before any further processing can be done, the Commissioner of Customs would need to ascertain compliance with rule 7 of Customs and Central Excise Duties Drawback Rules, 2017 to initiate the disposal of application which includes consideration of the ground for condonation of delay. The CESTAT sets aside the impugned order of rejection and direct the applications to be placed once again before the competent authority to determine the limitation period for application for brand rate.

Cenvat Credit Refund Hit by unjust enrichment When incidence of duty passed on to customers: CESTAT

M/s Jammu & Kashmir Cements Ltd vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 183

In a recent case, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Chandigarh bench held that Cenvat Credit refund hit by unjust enrichment when incidence of duty passed on to customers.The Tribunal viewed that it is incumbent upon the appellants who are claiming refund to satisfy the authorities with evidence to substantiate the quantum and fact of their clearances to institutional customers.

The Tribunal viewed that it is incumbent upon the appellants who are claiming refund to satisfy the authorities with evidence to substantiate the quantum and fact of their clearances to institutional customers. Also as regards the issue of unjust enrichment, Consultant for the appellants submitted that he can provide certificates/ affidavits to prove that their institutional customers i.e army/ Government agencies etc. have not availed CENVAT credit.

Non-Filing of Nil Service Tax Returns: CESTAT quashes Penalty

M/s S. I. Enterprises vs Commissioner of Central Excise &CGST CITATION: 2025 TAXSCAN (CESTAT) 146

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that no penalty can be imposed for failing to file a NIL return.

Upon review, the tribunal bench of Judicial Member P K Choudhary concluded that the penalty imposed for failing to file a NIL return was unwarranted, as the appellant was not liable for service tax during the period in question.

Discounts on Sale of Goods does not attract Service Tax: CESTAT in Relief to Tata Chemicals

M/s Tata Chemicals Ltd vsCommissioner of Central Excise & CGST CITATION: 2025 TAXSCAN (CESTAT) 147

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that no service tax is applicable on discounts provided towards the sale of goods.

The tribunal held that no service tax can be imposed on such discounts, as they are directly related to the sale of goods and fall outside the scope of “services” under the Finance Act.

Service of Customs Notices, Communications and Orders to be made through Email and on Common Portal, Alongside Traditional Methods: Delhi HC

BONANZA ENTERPRISES VS THEASSISTANT COMMISSIONER OF CUSTOMS & ANR. CITATION: 2025 TAXSCAN (HC) 126

In a landmark judgment, the Delhi High Court pointed at the need for modernizing the methods of serving customs notices, communications, and orders. The decision came in response to a writ petition filed against the Assistant Commissioner of Customs and others, challenging the non-receipt of a show cause notice ( SCN ) and subsequent ex-parte proceedings.

The court ordered the Chairman of the Central Board of Indirect Taxes and Customs (CBIC) to ensure compliance with the mandate of Section 153 of the Customs Act for serving notices via email and the common portal.

Relief to Bharat Petroleum: CESTAT Rules Intermixed Special Kerosene Oil Exempt from Excise Duty When Sold for Public Distribution

Bharat Petroleum Corporation LtdVS Commissioner of CGST, Mumbai East CITATION: 2025 TAXSCAN (CESTAT) 153

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that intermixed Special Kerosene Oil ( SKO ) cleared with the intent for public distribution through the Public Distribution System ( PDS ) remains exempt from central excise duty.

The tribunal confirmed that intermixed SKO retains its exempt status when intended for public distribution. The tribunal set aside the demand orders and allowed the assessee’s appeal.

CESTAT upholds demand of Service tax on Agency Commission for promoting sale of vehicle

M/s Anand Moters Agencies Ltd VSCommissioner, Central Excise & Service Tax, Lucknow CITATION: 2025 TAXSCAN (CESTAT) 150

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) upheld the demand of service tax on agency commission for promoting sale of vehicle. Agency Commission is amount paid by MUL for promoting the sales of vehicles when a new brand/ new version of vehicles is launched and are liable to pay service tax under Business Auxiliary Services.

The Tribunal set aside the entire demand inclusive of the admitted demand which was not under challenge.A two member bench of P.K. Choudhary, Member (Judicial) and Sanjiv Srivastava, Member (Technical) observed that the High Court has remanded the matter for reconsideration of the said demand. The do not dispute the said demand in this remand proceedings as the same was never under challenge even in the appeal filed by them. They have admitted this demand of Rs 42,799/- even at the time of adjudication.

Processes of Cutting, Deburring, and Broaching on Forged Blastings Deemed Manufacturing u/s 2(f) of Central Excise Act: CESTAT

M/s. Aurangabad Auto Engineering Pvt. Ltd. vs Principal Commissioner ofCGST CITATION: 2025 TAXSCAN (CESTAT) 155

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that processes such as cutting, deburring, and broaching performed on raw materials like “Forged Blastings” which creates “Gear 4th Platina” qualify as “manufacture” under Section 2(f) of the Central Excise Act, 1944.

The tribunal held that the processes performed by the appellant were incidental or ancillary to the completion of the manufactured product aligning with the statutory definition under Section 2(f). The tribunal set aside the service tax demand and ruled that the appellant’s activities constituted manufacturing which was exempt from service tax. The appeal was allowed.

Packaging Bulk to Retail amounts to Manufacturing: CESTAT sets aside Service Tax Demands

M/s Emami Limited vs Commissioner of CGST CITATION: 2025 TAXSCAN (CESTAT) 151

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that the activity of packaging bulk goods into retail packs constitutes “manufacture” under the Central Excise Act, 1944.

The CESTAT, comprising Ashok Jindal ( Judicial Member ) and K. Anpazhakan ( Technical Member ) set aside the service tax demands and the penalties made and held that the activity of packing its bulk into retail packs amounts to manufacture, due to which no service tax is payable by the other appellants or the job workers.

Cenvat Credit Reversal on Electricity Wheeled out: CESTAT remands Matter in absence of Records

M/s Chunar Cement Factory vs Commissioner of Central Excise &Service Tax CITATION: 2025 TAXSCAN (CESTAT) 152

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) remanded the matter of cenvat Credit reversal on electricity wheeled out as there were no records about the correctness of this amount as it confirms the demand by application of 6% of the value of the electricity wheeled out.

While partly allowing appeal, the Tribunal remanded the matter to the Original Authority in case the amount is within the amount already reversed, the proceedings should be closed without any final liabilities. Shri Atul Gupta appeared for the Appellant and Smt Chitra Srivastava authorised representative appeared for the Respondent.

Manufacturers can Claim CENVAT Credit for Capital Goods used in Exempt Intermediate Products made for Dutiable Final Goods: CESTAT

M/s. Fritzmeier Motherson Cabin Engineering Pvt. Ltd. vs Commissioner ofGST and Central Excise CITATION: 2025 TAXSCAN (CESTAT) 148

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that manufacturers are entitled to claim CENVAT Credit on capital goods used in the production of exempt intermediate products when those products are ultimately used in the manufacture of dutiable final goods.

The tribunal ruled that the demand for reversal of Cenvat Credit was unsustainable and set aside the impugned order. The extended period of limitation and the imposition of penalties were also deemed unsustainable. The appellant’s appeal was allowed with consequential relief as per the law.

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Customs Authorities Fail to Detail Contemporaneous Import Data for Increased CD to Company: CESTAT Remands Matter for Fair Assessment

Banaras Beads Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 157

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for fair assessment because customs authorities failed to provide detailed contemporaneous import data while increasing the customs duty ( CD ) on glass beads imported by Banaras Beads Ltd.

The orders of the Commissioner of Customs (Appeals) were set aside and the tribunal remanded the matter to the original customs authority for re-assessment directing them to share the relied-upon bills of entry with Banaras Beads Ltd and provide the appellant an opportunity to present their issue. The appeal was allowed.

Service Tax Liability on Construction Services: CESTAT Orders Recalculation Over Misclassification and Evidentiary Gaps

Creative Engineering Constructions vs Commissioner of Central TaxVisakhapatnam - I CITATION: 2025 TAXSCAN (CESTAT) 160

The Hyderabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) remanded a ₹3.32 Cr service tax case back to the adjudicating authority for recalculating the tax liability on the appellant after reviewing all documents.

The CESTAT remanded the case to the original adjudicating authority and directed that the validity of OCs be verified and that advances be received before their issuance. The tribunal also directed the authority to assess eligibility for abatements based on Value-Added Tax compliance and recalculate the service tax liability considering the payments already made.

Digital Still Image Video Cameras Eligible for BCD Exemption under Notification if Parameters Fall below Threshold: CESTAT

M/s.Fujifilm India Pvt. Ltd vs The Commissioner of Customs (Airport& Cargo) CITATION: 2025 TAXSCAN (CESTAT) 149

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that Fujifilm India Pvt. Ltd. was eligible for exemption from Basic Customs Duty ( BCD ) on imported “Digital Still Image Video Cameras” under Notification No. 25/2005, as amended.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) reviewed the submissions and the precedent set by the Nikon India case. The bench found no ambiguity in the language of Notification No. 25/2005 (as amended) and observed that the appellant successfully proven compliance with the notification’s parameters.

Notification does not Mandate IT Software Service Registration for Claiming CENVAT Credit Refund on Undisputed Exports: CESTAT

Syx Automations India Private Limited vs C.S.T.-Service Tax – AhmedabadCITATION: 2025 TAXSCAN (CESTAT) 154

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has confirmed that registration under “Information Technology Software Service” is not a mandatory requirement for claiming a refund of CENVAT credit under Notification No. 27/2012-C.E. (N.T.) if exports made undisputedly.

The tribunal observed that procedural conditions in refund notifications should not override substantive rights granted by law. The tribunal set aside the Commissioner (Appeals) order and remanded the matter to the adjudicating authority for document verification and reprocessing the refund within two months. The appeal was allowed.

Goods wrongly loaded could not be Exported without clearance by Customs: CESTAT

M/s. Samudera Shipping Line(India) Pvt. Ltd. vs Commissioner of Customs (Port) CITATION: 2025 TAXSCAN (CESTAT) 159

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning the addition of Rs. 24,89,121 as gross receipts of commission income under Section 144 of the Income Tax Act, 1961, for fresh adjudication.

The single-member bench comprising Dr. Manish Borad (Accountant Member) observed that the NFAC failed to fulfill its statutory obligation under Section 250(6) of the Income Tax Act which mandates appellate authorities to adjudicate appeals by stating points for determination, decisions, and reasons.

Penalty u/r 209A of Central Excise Limited to Individuals Dealing with Confiscable Goods, Not Applicable to Partnership Firms: CESTAT

Taher & Company vs Commissioner of C.E. & S.T.-Daman CITATION: 2025 TAXSCAN (CESTAT) 158

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that penalties under Rule 209A of the Central Excise Rules, 1944, cannot be imposed on partnership firms as the rule applies only to individuals dealing with confiscable goods.

Citing precedents such as Woodmen Industries, the tribunal held that partnership firms could not be penalized under Rule 209A of the Central Excise Act. The tribunal also observed that the adjudicating authority’s order was non-speaking and failed to address submissions raised by the appellants.

Non-Compliance with Section 9D, Statements Without Cross-Examination Unsustainable for Demand: CESTAT

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner ofCentral Excise CITATION: 2025 TAXSCAN (CESTAT) 161

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata Bench held that statements without cross-examination are unsustainable for demand as there has been non- compliance with Section 9D of the Central Excise Act, 1944.

The bench noted that the Delhi High Court in the case of Flevel International Vs. Commissioner of Central Excise-2016 (332) ELT 416(Del), had held that the denial of an opportunity of cross-examination of a witness whose statements have been relied upon in the adjudication order would vitiate the order of adjudication.

The CESTAT comparing Ashok Jindal ( Judicial Member ) and Rajeev Tandon ( Technical Member ) set aside the impugned order and ruled in favour of the appellant.

CESTAT Dismisses Clandestine Removal Charge due to Lack of Supporting Evidence

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner ofCentral Excise CITATION: 2025 TAXSCAN (CESTAT) 161

The Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata held that serious allegation cannot be made merely on assumption, in the absence of detailed supporting evidence and thus dismissed the charge of clandestine removal.

The bench noted that although Shri Sati Ram’s statement was recorded and documents were seized from his possession, further investigation is needed, including examining suppliers, buyers, transporters, and commission agents listed in the records and thus the authenticity of these documents remains questionable.

The CESTAT held that due to the lack of proper investigation and corroborative evidence, the allegations against the appellants regarding clandestine manufacture and clearance of goods are unsustainable

Time Barred SCN: CESTAT quashes Service Tax Demand

New Age Laminators Private Limited VS Commissioner of Central Goods AndService Tax & Central Excise &-Alwar CITATION: 2025 TAXSCAN (CESTAT) 162

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that a time-barred Show Cause Notice ( SCN ) invalidates the confirmation of a service demand proposed therein.

The bench, comprising Judicial Member Rachna Gupta and Technical Member Hemambika R. Priya reiterated the obligation of the Central Excise Officer to scrutinize filed returns, conduct necessary assessments under Section 72, and issue an SCN under Section 73 within the prescribed time limit. Failure to do so, leading to any tax escaping assessment, places the responsibility squarely on the officer.

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Municipal Corporation Engaged in Commercial Activities liable to Service Tax: CESTAT

M/s. Bidhannagar Municipality VS Commr. of Service Tax, Kolkata CITATION: 2025 TAXSCAN (CESTAT) 165

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that municipal corporations engaged in commercial activities are liable to pay service tax.

The appellant made submissions that the corporation undertook constitutional function and their services were not covered under the definition of service tax. Despite the submission, the department confirmed the demand and levied a penalty on the appellant. Aggrieved by the order, the appellant filed an appeal before the Tribunal.

Taking into account that the appellant is a government body, the tribunal set aside the penalty levied by the department. The appellant’s appeal was partially allowed.

Relief for TATA Steel: CESTAT Declares Excise Demand Notice Issued After 9.5 Years as Time-Barred, Exceeding 5 Years Limit

Tata Steel Limited vs Commissioner of CGST & CX, Bhubaneswar CITATION: 2025 TAXSCAN (CESTAT) 164

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that the demand notice issued after 9.5 years exceeding the time limit of 5 years is time-barred relieving TATA steel from excise duty.

The two-member bench comprising Ashok Jindal (Judicial Member) and Rajeev Tandon (Technical Member) observed that the High Court of Odisha directed the revenue to complete proceedings within 4 months.

The tribunal observed that no proceedings were initiated within the said time. The tribunal further observed that the maximum time limit to issue notice is 5 years if there was any evasion of duty by the way of suppression of facts and in the present case the notice was issued after 9.5 years.

Revenue Neutrality and Procedural Lapses: CESTAT quashes Central Excise Duty and Penalty Orders

M/s Allied Resins and Chemicals Limited vs Commissioner of CentralExcise CITATION: 2025 TAXSCAN (CESTAT) 166

The Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has quashed central excise duty and penalty orders due to revenue neutrality and procedural lapses.

Thus, the CESTAT bench, consisting of Ashok Jindal ( Judicial Member ) and Rajeev Tandon ( Technical Member ), only confirmed a conceded demand of Rs. 89,855 for scrap clearance but set aside all other demands and penalties. The bench held procedural lapses, revenue neutrality, and the absence of malafide intent invalidated the department’s claims.

Statutory Authority’s Sovereign Functions exempt from Service Tax: CESTAT quashes Rs. 28 Cr. Demand for lack of evidence and limitation by time bar

Asansol Durgapur Development Authority vs Commissioner of CGST &Central Excise, Bolpur CITATION: 2025 TAXSCAN (CESTAT) 167

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) dismissed the service tax demand of Rs. 28.39 crore due to insufficient evidence and limitations due to the time bar and also held that statutory authority’s sovereign functions are exempt from service tax.

The bench noted that it was difficult to establish that the ADDA had suppressed the facts to evade tax as it was a statutory authority. The bench, by relying on the figures taken for quantification of demand, has derived the income and expenditure statement and balance sheet of ADDA, which shows that all the details have been disclosed in the records.

Relief to TATA Beverages: CESTAT Rules SCN Issued in 2010 for Alleged IPR Service Invalid as Business Transfer Details Disclosed in 2005

M/s. Tata Global Beverages Ltd. vs Commissioner of Service TaxCITATION: 2025 TAXSCAN (CESTAT) 168

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that the Show Cause Notice (SCN) issued in 2010 for alleged IPR service was invalid citing that the business transfer details were disclosed in 2005.

The two-member bench comprising R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) observed that the transfer details were disclosed to the department in 2005 but the notice was issued to the appellant in 2010. Despite the business transfer information available to the department, they invoked an extended period and there was no suppression of facts.

CESTAT upholds Service Tax Refund Claim Rejection on Course by YCMOU

MAHARASHTRA KNOWLEDGE CORPRATION LTD vs COMMISSIONER SERVICE TAX-I PUNEF- Wing CITATION: 2025 TAXSCAN (CESTAT) 170

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has affirmed the denial of a refund claim for the period between April 2014 and September 2014. The claim pertained to service tax remitted for an educational program that only later, in March 2015, received recognition from the Yashwantrao Chavan Maharashtra Open University (YCMOU).

Nevertheless, the refund applications were disallowed because recognition for the relevant time frame had not yet been granted by the Open University, whose agreement was finalized only on March 30, 2015. By that point, student fees had already been collected. Additionally, the Tribunal deemed the request time-barred, given that relevant documents were submitted on June 8, 2015, rather than March 30, 2015. This contradicted the appellant’s contention that an online refund application had been filed in April 2015, which would have been within the statutory deadline.

No Confiscation of Seized Gold Merely for Invalid LOA: CESTAT

M/s Encee International NSEZ vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 169

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that gold cannot be confiscated solely on the ground of an invalid Letter of Approval (LOA).

The Third Member, examining Rule 47 of the SEZ Rules, 2006, observed that this provision applies to the removal of goods from an SEZ to the Domestic Tariff Area (DTA). Since there was no actual or attempted transfer of gold from the SEZ to the DTA, Rule 47 was irrelevant. Instead, the case revolved around unauthorized manufacturing within an SEZ unit due to the absence of a valid LOA—an issue squarely under the purview of the Development Commissioner rather than Customs.

Dept. Fails to Verify Document Veracity with Key Parties like Suppliers, Buyers, Transporters, Agents: CESTAT Rules Investigation Faulty

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner ofCentral Excise & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 171

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled the investigation faulty due to the department failing to verify the veracity of documents with key parties like suppliers, buyers, transporters, agents etc,.

On the other hand, the counsel for the revenue submitted that the documents were recovered from the employees of the appellant company. The counsel also contended that Sati Ram made statements that these documents belong to the appellant company. Therefore the counsel for the revenue justified the demand against the appellants.

Commissioner Denies Cross-Examination Opportunity: CESTAT Quashes Excise Demand Order for Violation of S. 9D of CEA

M/s Shree Krishna Laxami Steel Udyog Private Limited vs Commissioner ofCentral Excise & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 171

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Quashed the order of the commissioner for denying cross-examination opportunity citing that it is in violation of section 9D of the Central Excise Act, 1944.

Therefore, the tribunal relying on the judgment of the Supreme Court in Andaman Timber Industries and also the judgment of the High Court of Delhi in Flevel International held that the statements recorded in the investigation without Examination in Chief and absence of Cross-examination were not sustainable in law.

Cost of Parts Supplied by Principal Manufacturer not Part of Job Worker’s Assessable Value: CESTAT

Electronic Instrumentationand Control vs Commissioner of Central Excise & ST CITATION: 2025 TAXSCAN (CESTAT) 172

The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ),Ahmedabad Bench, delivered a significant ruling, holding that assessable value of Job Work excludes costs of parts supplied by the principal manufacturer in the case involving Electronic Instrumentation and Control (Appellant) and the Commissioner of Central Excise and Service Tax, Ahmedabad (Respondent).

This judgment provides clarity for job workers and principal manufacturers regarding the valuation of excisable goods. It reiterated the importance of following Modvat/CENVAT credit provisions and ensuring that the supply chain remains compliant without unnecessary tax burdens.

Dual Custodianship on same good Cannot be Granted: CESTAT Sets Aside penalty Imposed under Customs Act

Messrs Kesar Enterprise Ltd vs C.C.-Kandla CITATION: 2025 TAXSCAN (CESTAT) 174

The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that there cannot be dual custodianship of the same goods and set aside the Penalty imposed under Customs Act, 1962.

The single bench of Somesh Arora (Judicial Member) has observed that a licensed custodianship cannot be granted along with other authority i.e. port authority and viewed that there cannot be dual custodianship of the same goods. Therefore the legal position brought out in letter dated 07.12.2011 of the DC Customs is proper and legal and supersedes any license which was given contrary to position stated in this letter even if earlier.

Cenvat Credit Can Be Utilised for Payment of Duty in Case of Delayed Excise Duty: CESTAT

M/s Aman Pipes (P) Ltd vs Commissioner, Central Excise & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 176

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that cenvat credit can be utilised for payment of duty in case of delayed excise duty and directed the excise department to refund the interest.

The tribunal determined that the appellant’s use of the Cenvat credit was appropriate, and as a result, no interest was due on the sum paid. Therefore, from the date of the Supreme Court’s final order to the date of payment, the appellant is entitled to a refund of the amount they paid in interest on the duty that was delayed, with a rate of 12% annually.

Co-Noticee can apply for waiver of Penalty under Sabka Vishwas Scheme 2019 If main Noticee Issued Discharge Certificate: CESTAT

SHRI RAVI SESWANI VS COMMISSIONER, CGST & CENTRAL EXCISE CITATION: 2025 TAXSCAN (CESTAT) 175

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the co-noticee is eligible to seek waiver of penalty under Sabka Vishwas Scheme, 2019 if main noticee is issued discharge certificate.

In light of the relief available to them under section 124 (i)(b) of the Finance Act, 1994, the appellant would have paid “nil” rate of duty if they had applied under the SVLDR Scheme, the tribunal held, even though the appellant had not filed the declaration after the main noticees had received the Discharge Certificate towards the duty liability.

Services Rendered to Construction of Roads Were not Exigible to Service Tax: CESTAT

M/S AADITYA CONSTRUCTIONS vs PRINCIPAL COMMISSIONER OF CGST-RAIPURCHHATTISGARH CITATION: 2025 TAXSCAN (CESTAT) 177

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that services rendered to construction of roads were not exigible to service tax quashed the service tax demand under Reverse Charge Mechanism (RCM) on roads transport agency services on individual truck owners services.

The bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has held that demand of service tax under reverse charge mechanism on roads transport agency services on the services rendered by the individual truck owners also cannot be sustained. Since the demand of service tax cannot be sustained, the demand of interest and penalty also need to be set aside.

CESTAT Allows Refund Claims: Holds Procedural Lapses Can’t Deny Exemption Benefits

M/s. Signal and Systems India Pvt. Ltd. vs Commissioner of GST &Central Excise CITATION: 2025 TAXSCAN (CESTAT) 178

In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in Chennai has allowed refund claims of a taxpayer, holding that procedural lapses cannot deny exemption benefits.

The tribunal noted that while the appellant had cleared goods for an ADB-financed project and were eligible for exemption under the given Notification, they could not produce certificates from ADB or other required documents at the time of clearance due to procedural delays.

In conclusion, the CESTAT’s decision is a welcome move and provides relief to taxpayers who have been denied exemption benefits due to procedural lapses. The ruling is also a reminder to the revenue authorities to follow the principles of natural justice and not deny benefits to taxpayers on technical grounds.

No Service Tax Payable by Standard Chartered Bank India on Allocation of General Administrative Expenses by Head Office: CESTAT

Standard CharteredBank vs Commissioner of CGST & CX Mumbai South CITATION: 2025 TAXSCAN (CESTAT) 180

The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable by Standard Chartered Bank India on allocation of head office executive and general administrative expenses’ by the head office.

SCB-UK, the head office, incurs a number of expenses under different headings to support all of its global branches, including advertising, auditing fees, donations, entertainment, gross emoluments, insurance, legal professional fees, national insurance contributions, pension contributions, postage, telephone, telegraph, printing, stationery, publication, newspapers, rent & rates, subscriptions, travel expenses, machinery, furniture, computer, microfilm, and other miscellaneous expenses.

Relief to Axis Bank: CESTAT Allows CENVAT Credit on Tax Paid on Premium Mandatorily Required for Functioning as Bank

Axis Bank Ltd vs Commissioner of Service Tax - V CITATION: 2025 TAXSCAN (CESTAT) 179

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has granted Axis Bank CENVAT Credit on taxes paid on premiums that are necessary for banks to operate.

The Reserve Bank of India (RBI) oversees banks, and the bench of C J Mathew (Technical Member) and Ajay Sharma (Judicial Member) has noted that CENVAT credit is available on tax paid on premiums that are mandatory for banks to operate. In accepting the appeal, the tribunal found that the insurance service provided to banks by the Deposit Insurance Corporation is a “input service” and that banks are permitted to use the Cenvat credit of service tax they have paid for this service to provide “output services.”

Service Tax SCN turns Invalid if Assessee Paid Tax Liability Along with Interest before issuance of SCN: CESTAT

Jayhind Buildcon Pvt Ltd vs Commissioner of C.E. & S.T.-Rajkot CITATION: 2025 TAXSCAN (CESTAT) 181

In a recent case, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held a show cause notice (SCN) demanding Service Tax turns invalid if the assessee had paid tax liability along with interest before issuance of SCN.

A show cause notice dated 31.08.2018 demanding the service tax of Rs. 40,65,565/-, for the same period as audit, by invoking extended period of limitation, was issued. The appellant had already deposited service tax amounting to Rs. 40Lakh as duty noted in the show cause notice and interest amounting to Rs. 6,34,560/- before issuance of show cause notice. The adjudicating authority has confirmed demand of Rs. 46,65,565/- and have also imposed mandatory penalty of Rs. 40,65,565/- under Section 78 of the Finance Act, 1994, against which the appellant filed an appeal before the Commissioner (Appeals) who has rejected the appeal.

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Rejection of Application for Brand Rate for Exported Goods Under Duty Drawback Rules solely on Limitation: CESTAT Remands Matter for Reconsideration

John Deere India Pvt Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 182

In a recent case on the issue of rejection of an Application for brand rate for exported goods under duty drawback rules solely on limitation, the Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) remanded the matter for reconsideration.

As the deemed date of extension stands altered owing to its necessity before any further processing can be done, the Commissioner of Customs would need to ascertain compliance with rule 7 of Customs and Central Excise Duties Drawback Rules, 2017 to initiate the disposal of application which includes consideration of the ground for condonation of delay. The CESTAT sets aside the impugned order of rejection and direct the applications to be placed once again before the competent authority to determine the limitation period for application for brand rate.

Cenvat Credit Refund Hit by unjust enrichment When incidence of duty passed on to customers: CESTAT

M/s Jammu & Kashmir Cements Ltd vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 183

In a recent case, the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Chandigarh bench held that Cenvat Credit refund hit by unjust enrichment when incidence of duty passed on to customers. The Tribunal viewed that it is incumbent upon the appellants who are claiming refund to satisfy the authorities with evidence to substantiate the quantum and fact of their clearances to institutional customers.

The Tribunal viewed that it is incumbent upon the appellants who are claiming refund to satisfy the authorities with evidence to substantiate the quantum and fact of their clearances to institutional customers. Also as regards the issue of unjust enrichment, Consultant for the appellants submitted that he can provide certificates/ affidavits to prove that their institutional customers i.e army/ Government agencies etc. have not availed CENVAT credit.

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