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

This half-yearly round-up analytically summarizes the key Indirect Tax-Customs, Excise and Service Tax rulings of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan.in during the first half of 2025.

Issue on Compliance of Rule 6 of CCR: CESTAT Sets aside Demand Order issued against Mahindra & Mahindra Ltd

M/s Mahindra & Mahindra Ltd. vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 184

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the demand order issued against Mahindra & Mahindra Ltd for non compliance of Rule 6 of the CenvatCredit Rules ( CCR ), 2004. The bench remanded the matter to the original authority for ascertain the fact as to whether, the appellants had reversed the common input services at the time of issuance of invoices by the ISD

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The period of dispute involved in the present case is from April, 2009 to March, 2013 and April, 2013 to June, 2013. The Department had issued the show-cause notices dated 11.03.2014 and 05.05.2014, seeking for confirmation of the demands in respect of the said period. The appellants in the present appeals have pleaded that the activity of ‘trading’ was not an exempted service prior to 01.04.2011 and there were divergent views with regard to such activity, whether to be considered as ‘exempted service’ or ‘otherwise’. Therefore, they have pleaded that though the CENVAT credit availed on the basis of ISD invoices were reflected in the books of account, but the said particulars were not captured in the periodical returns i.e., ER1 filed before the jurisdictional Central Excise authorities.

CESTAT Allows Larsen & Toubro Ltd. to utilize common Cenvat Credit account for payment of Service Tax on output services provided

M/s. Larsen & Toubro Limited vs Commissioner of Central Excise,Customs & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 185

In a case, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)Kolkata bench held that Larsen & Toubro Limited, the appellant can utilize common Cenvat Credit account for payment of Service Tax on output services provided by them. It was observed that there is no bar on the utilization of CENVAT credit availed on input services for payment of tax on excisable goods so manufactured and cleared.

In the case of CCE v. S.S. Engineers 2016 it was observed that “Cenvat credit of input services-utilization thereof cross utilization no infirmity in Tribunal findings that the said credit can be utilized for payment of excise duty on goods manufactured by assessee and that such cross-utilization is neither barred nor prohibited accounting problems in such cases has been taken care of in CBEC circular dated 30-3-2010 aforesaid interpretation of Cenvat Credit Rules by Tribunal being probable and possible, is not perverse No substantive question of law, having been raised, Revenue’s appeal dismissed Rule 3 and 7 of Cenvat Credit Rules/2004.”

Provision of S. 11BB of Excise Act not applicable for Claiming Interest on Pre-Deposit: CESTAT

M/s Amkap Marketing Pvt. Ltd. VS Commissioner of Central Excise &CGST CITATION: 2025 TAXSCAN (CESTAT) 186

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that section 11BB of the Central Excise Act, which stipulates interest on delayed refunds, would not apply because there is no statutory mechanism for demanding interest on pre-deposits.

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The Additional Commissioner upheld the duty claim of Rs. 45,31,574 /- under Section 11A of the 1944 Act in the aforementioned ruling, and the petitioners were held accountable for paying the amount due, plus interest, in compliance with Section 11AB of the same Act. Additional directives were drafted for the seizure of Rs. 44,96,000 in cash and the imposition of Rs. 45,31,574 in money penalties. The sum of Rs. 20,00,000 that the petitioners had placed while the SCN procedures were pending was also taken away in relation to the demands that had become crystallized.

Volvo can Import Internal Combustion Engines In Absence of Restriction in DFIA License: CESTAT

M/s.Volvo India Private Ltd vs The Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 188

In a ruling in favour of Volvo India Pvt Ltd, the Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the appellant to import internal combustion engines in the absence of restriction in the Dutyfree Import Authorization (DFIA) License. The bench further viewed that the assessee cannot be expected to correlate its imports with the exports of the person to whom the license was originally issued.

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The exemption from Customs duty in respect of imports against DFIA licences are governed by Notification No. 98/2009-Cus dated 11.09.2009. To the extent relevant, this notification stipulates that the exemption shall be granted provided that the description, value and quantity of materials imported are covered by the authorization, and the authorization is produced before the proper officer at the time of clearance. Certain additional restrictions are in place in respect of products specified in paragraph 4.32.3 of the Handbook of Procedures (Vol. I) of the Foreign Trade Policy (FTP).

SCN Demanding Service Tax on Alleged Wrongful Availment of Credit after Three Years is Not Valid: CESTAT

M/s.Xomox Sanmar Ltd vs The Commissioner of GST & Central ExciseCITATION: 2025 TAXSCAN (CESTAT) 189

In a recent case, the Chennai Bench Of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the action of the department in proposing and demanding service tax on alleged wrongful availment of credit by invoking the extended period of limitation after 3 years is not justified.

The tribunal determined that the appellant’s use of the ineligible credit made it abundantly evident that the recovery of the credit called for the application of an extended statute of limitations. On the other hand observed that the Revenue has not satisfactorily proved the invoking of extended period of limitation while raising the impugned demand and the order that has upheld the above demand cannot sustain, for which reason, I set aside the same on limitation alone.

Appellate Authority can Condone Delay upto 30 Days as per Finance Act: CESTAT

Shri Santhosh Kumar Shetty Saja vs The Principal Commissioner of CentralExcise and Central TaxCITATION: 2025 TAXSCAN (CESTAT) 187

The Bangalore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that appellate authority can condone delay upto 30 Days as per Finance Act, 1994 after the expiry of 60 days which is the normal period for preferring appeal.

While dismissing the appeal, the tribunal noted that the appeal must be filed within 60 days, but under the proviso, the appellate authority may provide an additional 30 days to hear the case. Section 35’s proviso to sub-section (1) makes it abundantly evident that the appellate body lacks the ability to permit the appeal to be presented after the 30-day limit. The wording makes it apparent that the legislature wanted the appellate authority to consider the appeal and only allow a delay of up to 30 days following the 60-day time that is typically allotted for prioritizing appeals.

“Premium” or “Salami” Value is Exigible to Service Tax under “Renting of Immovable Property”: CESTAT

Rajasthan State Industrial Development & Investment Corporation Ltd- The Commissioner CITATION: 2025 TAXSCAN (CESTAT) 190

As per the ruling of the Delhi Bench Of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), the value of “premium” or “salami” is subject to service tax under “renting of immovable property” for the time period before July 1, 2012, under section 65(105)(zzzz) of the Finance Act, and starting on July 1, 2012, under section 66B of the Finance Act.

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Renting of immovable property” is a “declared service” under section 66E of the Finance Act. Once “renting of immovable property” is a declared service and so taxable under section 66B of the Finance Act, it cannot be contended by the appellant that it will also be included in those services which are excluded under section 65B (44) of the Finance Act, for it can never be the intention of the legislature to include a “service” as exigible to service tax and at the same time also exclude that “service” from taxability.

Import of Refrigerant Gas in Cylinder Requires Permission from Controller Of Explosive: CESTAT dismisses Appeal of CONCOR India

M/s. Container Corporation of India Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 194

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in a recent case has held that the import of refrigerant gas in cylinders requires permission from the controller of explosives. The Tribunal further upheld the penalty on Container Corporation of India (CCI) for misdeclaration and dismissed the appeal of CONCOR India.

The appellant has not shown any proof that the container was either broken or lacked a seal when the items were placed in their custody, according to the two-member bench of Binu Tamta (Judicial Member). The Delhi High Court has already addressed the appellant’s argument that the commodities were in CISF deployment, ruling that the appellant cannot avoid this burden by placing the blame on the CISF.

Full Excise Duty not Demandable for Period of Non Operation of Machines: CESTAT rules in favour of Gutka Manufacturer

Maruti Tabacco Products P Limited vs Commissioner of Central Excise& ST CITATION: 2025 TAXSCAN (CESTAT) 192

In a ruling in favour of Gutka Manufacturer, the Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that full excise duty cannot be demanded for the period when the machines were not in operation.

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According to the CESTAT, the appellant gave the Department adequate notice whenever they wished to stop a number of machines from operating, and the jurisdictional superintendent of the range sealed the machines. The appellant then notified the department when the machines were made operational, and they only began operating the machines after the officers had de-sealed them.

Adjustment of Refund against Confirmed Demand During Pendency of Appeal is not Permissible: CESTAT

M/s Indus Towers Limited vs Commissioner of Central ExciseCITATION: 2025 TAXSCAN (CESTAT) 191

In a recent case, the Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that adjustment of refund against a confirmed demand during the pendency of an appeal is not permissible as it amounts to coercive recovery.

Regarding the adjustment of the amount Rs.64,73,631/- from the total refund sanctioned to the appellant, the Adjudicating Authority has committed an error because the said demand was not confirmed by the Appellate Authority rather the said demand was set aside by the Appellate Authority in the case of Bharti Infratel Ltd.

Service Tax Not Payable by Bharti Airtel on Free Allowance Given to Employees: CESTAT

Bharti Airtel Ltd vs Commissioner of Central Goods & Service Tax CITATION: 2025 TAXSCAN (CESTAT) 193

In an important ruling, the Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable by Bharati Airtel on the free allowance given to the employees which is in the nature of discount/concession.The tribunal allowed the appeal of Bharti Airtel and quashed the order.

According to the Tribunal, money is only written off when it is considered a receivable and has not been received despite a serious effort. In its books of accounts, the appellant has recorded the monies as receivable. In these situations, the assessable value solely includes the actual consideration received or receivable.

“Quick Lime” Properly classifiable under Harmonized System (HS) code for quicklime: CESTAT rules in Favour of Jindal Stainless Ltd

M/s Jindal Stainless Ltd.VS Commissioner of CustomsCITATION: 2025 TAXSCAN (CESTAT) 195

The Hyderabad bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT)In a ruling in favour of Jindal Stainless Ltd held that “Quick Lime” Properly classifiable under Harmonized System (HS) code for quicklime ie, under Customs Tariff Item 25221000.

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The facts reveal that the imported goods are quicklime. There is no case of mixture of different material or substance to merit application of GIR 2 or 3. Thus, the Revenue’s argument for Classification of quick lime under heading 2825 as it occurs last among other classification under heading 2522 is not legally sustainable. There is no case for application of Rule 3 of GIR in this case. In view of the above, we are of the view that the imported goods are appropriately classifiable under CTH 25221000.

No Penalty under Customs Act When Goods Transshipped from Aircrafts and Vessels traversed after fastening Duty: CESTAT

Anshu Sahay vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 198

The Mumbai bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has held that penalty is not payable under Customs Act, 1962 when goods transshipped from aircrafts and vessels traversed after fastening duty. The CESTAT held that there is no cause for confiscation of the impugned goods under section 111(n) and section 111 (o) of Customs Act, 1962 in the light of all movements having been effected under the approval of customs authorities.

The CESTAT held that there is no cause for confiscation of the impugned goods under section 111(n) and section 111 (o) of Customs Act, 1962 in the light of all movements having been effected under the approval of customs authorities. With lack of empowerment to invoke section 28 of Customs Act, 1962, penalties under section 114A and section 114AA of Customs Act, 1962 are without authority of law. Appeals are allowed by setting aside the impugned orders.

Revenue Cannot Deny CENVAT Credit After Accepting Service Tax Paymentfrom Provider: CESTAT

SKF Technologies (I) Pvt. Limited vs Commissioner of Central Excise& ST CITATION: 2025 TAXSCAN (CESTAT) 196

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Cenvat credit cannot be denied at the recipient’s end when service tax has been paid and accepted at the provider’s end.

The tribunal observed no objections had been raised during prior tax assessments, and similar transactions had been assessed without issue. The tribunal referenced Amara Raja Electronics Ltd. (2016), Nahar Granites Ltd. (2014), and Creative Enterprises (2009) which held that credit cannot be denied at the recipient’s end when tax is collected at the provider’s end.

No Service Tax on WCS provided to Airport and Non Commercial Governmental Authority: CESTAT

M/s Kailash Chawla vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 197

In a recent case, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) New Delhi has held that service tax is not leviable on work contract service (WCS) provided to airports and non-commercial governmental authorities. The bench viewed that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty.

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The Departmental Representative for department also has relied upon the Circular No. 12/2003-ST dated 20.06.2003 which also exempts so much of the value of all taxable services, as is equal to the value of the goods and materials sold by the service provider to the recipient of service from the service tax leviable thereon under Section 66 of the Finance Act. Though as per department this circular is applicable if there is documentary proof specifically indicating the value of said goods or materials. But as already held above that in such case there shall be available the abatement of 67%. In any case the value of goods is not leviable to service tax.

Credit Cannot be denied for Photocopies of Invoices if Tax Payment is Accepted and Unchallenged: CESTAT

SKF Technologies (I) Pvt. Limited VS Commissioner of Central Excise& ST CITATION: 2025 TAXSCAN (CESTAT) 196

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that CENVAT credit cannot be denied solely on the basis that invoices were photocopies, provided that the service tax payment has been duly made and accepted by the revenue authorities without challenge.

The tribunal held that invoices issued in the name of the head office were valid for claiming credit at the unit where the service was actually utilized. The tribunal also observed that photocopies of invoices could not be the sole ground for denial if the authenticity of tax payment was not in question.

No excise duty payable for captive use of Tools and Fixtures within factory, Even if Sale Invoices are issued: CESTAT

TENNCO EXHAUST INDIA PVT LTD VS COMMISSIONER OF CENTRAL EXCISE CITATION: 2025 TAXSCAN (CESTAT) 200

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that excise duty is not payable on tools and fixtures used captively within the factory, even if sale invoices are issued, and that demands based on revenue-neutral transactions are time-barred.

Regarding the transfer to the Pune unit, the tribunal ruled that the entire transaction was revenue-neutral and that no malafide intent was established, making the extended period of limitation inapplicable. The tribunal held that the demand was time-barred and not sustainable. The impugned order was set aside, and the appeal was allowed.

Excise Exemption cannot be Entirely Denied When Packaging Materials are Partially Used for Traded Goods: CESTAT

Sri Deepak Keshan M/s. Budge Budge Refineries Ltd vs Commissioner ofCentral Excise Kolkata-VII Commissionerate CITATION: 2025 TAXSCAN (CESTAT) 199

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that excise exemption on captively consumed packaging materials cannot be entirely denied when some portion is used for traded goods.

The revenue countered that the appellant failed to maintain separate accounts to differentiate between packaging materials used for captive consumption and traded goods. The mixing of traded and manufactured RPO in the same tanks violated the conditions of Notification No. 10/96-CE, which mandates exclusive use of exempted materials for captive production. The appellant did not meet the exemption conditions so the revenue argued that it was not entitled to any benefit under the notification.

CESTAT Orders Customs Duty Evader to Pay After Dept Made Bonafide Error in Not Applying Mandatory Penalty

M/s Sarvatra International vs Commissioner of Customs, ICD CITATION: 2025 TAXSCAN (CESTAT) 201

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has directed the customs duty evader to pay a penalty as it was a bonafide mistake by the department to not impose mandatory penalty.

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Under section 111(m) of the Act, the goods may be seized in addition to a redemption fine because there appears to have been a misrepresentation in both the description and the value of the commodities. The proviso to paragraph (1) of section 28 of the Act provides for the recovery of duty based on the same logic and comparison. As a result, the adjudicating authority’s differential customs duty calculation for the two bills of entry is upheld. The application of the penalty under section 114A of the Act must be sustained since the appellant used fact suppression to avoid fulfilling his obligations.

Non-Submission of A1/A2 Certificate Not Grounds for Denying Service Tax Exemption on SEZ Services: CESTAT

Geo Dyanamics vs Commissioner of C.E. & S.T.-Vadodara-i CITATION: 2025 TAXSCAN (CESTAT) 205

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the non-submission of A1/A2 certificates should not prevent the granting of service tax exemption for services provided to a Special Economic Zone ( SEZ ).

The assessee’s counsel, argued that while the A1/A2 certificate was not submitted in some cases, the service provided to the SEZ was undisputed. He claimed that non-submission of the certificate was a procedural lapse and that the exemption should apply, citing Section 26(1)(e) of the SEZ Act and Rule 31 of the SEZ Rules. He relied on the Tribunal’s judgment in M/s Anjani Excavation Operation vs. Commissioner of Central Excise & ST, Bharuch, Final Order No. 11444/2023.

GAR-7 Challan in Head Office’s Name not a valid Reason to Deny Credit: CESTAT

TENNCO EXHAUST INDIA PVT LTD vs COMMISSIONER OF CENTRAL EXCISE CITATION: 2025 TAXSCAN (CESTAT) 196

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that Cenvat credit cannot be denied solely on the ground that the GAR-7 challan was in the name of the head office or another unit of the same company.

The appellant argued that proportionate credit was claimed at the Ahmedabad unit and relied on Greaves Cotton (2015 (37) STR 395) and M/S Piramal Glass Pvt. Ltd. (2021 (55) GSTL 22 (Tri-Ahm)), which allowed credit of one unit to be availed by another unit of the same company. The appellant also contended that minor errors in foreign service providers’ invoices, such as the inclusion of VAT, should not be grounds for denial of credit.

Dept cannot Invoke Extended Period of Limitation merely because Returns were Self-Assessed: CESTAT

M/s. Wellworth Project Developers VS Commissioner of CGST CITATION: 2025 TAXSCAN (CESTAT) 202

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has stated that the department cannot invoke the extended period of limitation merely because the returns were self-assessed. The Tribunal concluded that the show cause notice only asserts that the assessee violated several provisions of the Finance Act and the Rules in order to avoid paying service tax because the assessee failed to disclose the correct value of taxable services in the ST-3 returns, allowing the payment of service tax totaling Rs. 2,40,96,546 to evade assessment.

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The Tribunal has consistently maintained that the appropriate officer can always ask the asseessee for information, even under the self-assessment scheme, and that it is the responsibility of the appropriate officer to carefully examine whether the duty assessed by the asseessee is correct. The mere fact that the returns were self-assessed does not allow the department to claim the longer period of limitation. Since the appropriate officer may have discovered the facts, the Commissioner erred in ruling that the extended period of limitation could be used if the department learned of them during an investigation.

CESTAT Remands Case to Adjudicating Authority on 8%/10% Payment for Electricity, Citing Reversal of Cenvat Credit

Gujarat Alkalies And Chemicals Ltd vs Commissioner of C.E. &S.T.-Vadodara-ii CITATION: 2025 TAXSCAN (CESTAT) 204

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the case to the Adjudicating Authority regarding the 8%/10% payment on electricity, citing the reversal of Cenvat credit .

The tribunal, after considering both sides submissions and reviewing the records, remanded the case to the adjudicating authority in the appellant’s earlier matter. The issue was whether the appellant was liable to pay 8%/10% on electricity sold to the State Electricity Board under Rule 6(3A) of the Cenvat Credit Rules, 2004, due to the use of common inputs/services. The assessee had reversed the proportionate Cenvat credit, which was acknowledged by the adjudicating authority.

Residential Property not Subject to ‘Rental Services of Commercial Property’ Charges: CESTAT

Gujarat State Electricity Corporation Ltd vs C.C.E. &S.T.-Vadodara-I CITATION: 2025 TAXSCAN (CESTAT) 203

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that residential property is not subject to ‘Rental Services of Commercial Property’ charges.

Given the lack of evidence supporting the classification of the property as commercial, the tribunal set aside the order of the lower authority. Consequently, the appeal was allowed, and the assessee was granted the appropriate relief.

Time Limit For Filing Refund Application Cannot Rejected Merely Because of Unauthorized Tax Collection: CESTAT

Deepak Pandey vs Commissioner of Service Tax CITATION: 2025 TAXSCAN (CESTAT) 207

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), the fact that the tax was collected illegally does not mean that the deadline for submitting a refund application can be ignored.

The Tribunal opined that once the time limit of six months has been provided, it cannot be contended that merely because the character of the tax deposit would continue to be in the nature of the tax collected without authority of law and, therefore, no limitation can be prescribed for filing the refund application. The Member failed to take into consideration the terms of sub-section (3) of the section 102 while arriving at such a conclusion.

‘Royalty’ inclusion in transaction valuation: CESTAT sets aside order for lack of Jurisdiction

Henkel Adhesives Technologies India Pvt Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 208

The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside an order affirming the inclusion of ‘royalty’ in transaction valuation, ruling that the first appellate authority lacked jurisdiction due to the absence of finalized provisional assessments.

The appellate tribunal pointed out that appeals should stem from a final assessment under section 17 or section 18 of the Customs Act, 1962. In this case, the ‘proper officer’ should have either accepted the declared duty or reassessed it, including provisional assessments. Since the finalization of the provisional assessments had not occurred, the first appellate authority’s decision was made without jurisdiction.

CESTAT upholds Rejection of Nil CVD Benefit Claim for Failing to Meet Updated Conditions

M/s.Goyal Impex and Industries Ltd. vs The Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 210

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) upheld the rejection of a Nil Countervailing Duty (CVD) benefit claim under Notification No. 30/2004-CE, as the assessee failed to meet the updated conditions introduced by subsequent amendments.

The central issue was whether the assessee’s claim for Nil CVD under Notification No. 30/2004-CE was valid. The assessee relied on the Supreme Court’s decision in SRF Ltd. Vs. Commissioner of Customs, Chennai (2015) and cited several other rulings to support the claim. They argued that the benefit had previously been granted to M/s. Aditya International Ltd. and that rejecting their claim was unjust.

CESTAT denies Concessional Duty Benefit Citing use of Imported Consumables instead of Raw Materials

Indoworth India Ltd vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 209

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) denied the benefit of concessional excise duty under Notification citing the company used imported consumables rather than domestically sourced raw materials which made them ineligible.

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The revenue countered that Notification No. 23/2003-C.E. explicitly required raw materials to be domestically sourced, and the appellant’s failure to meet this condition made them ineligible for concessional duty. The department contended that the use of imported inputs violated the statutory provisions, justifying the duty demand and penalties imposed.

Excise Order against Liquidated Company is not sustainable: CESTAT

M/s. Transstroy (India )Ltd vs Commissioner of GST and Central Excise CITATION: 2025 TAXSCAN (CESTAT) 211

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that excise Order against a liquidated company is not sustainable. The Tribunal found that the National Company Law Tribunal (NCLT) had allowed the application of the Resolution Professional and ordered liquidation of the Company/Corporate Debtor.

The NCLT had allowed the application of the Resolution Professional and ordered liquidation of the Company/Corporate Debtor. Hence, the present appeal could not survive, since the appeal would stand abated, in view of the decision of the Apex Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd. & Ors.

Undenatured Ethyl Alcohol not Excisable, Not Exempt under Rule 6(3) of CCR: CESTAT

M/s.Salem Cooperative Sugar Mills Ltd vs The Commissioner of GST &Central Excise CITATION: 2025 TAXSCAN (CESTAT) 212

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)held that the Undenatured Ethyl Alcohol is not excisable and once the goods are not excisable, they cannot be considered exempt to fall within the scope of Rule 6(3) of the Cenvat Credit Rules(CCR), 2004.

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The Adjudicating Authority holds that the credit taken by the Appellant in relation to the manufacture of the Undenatured Ethyl Alcohol (described by the Adjudicating Authority as being non-excisable) was without the authority of law. He holds that Rule 6(3)(a) would be inapplicable both in the availment and expunging of credit. The said Authority reasons that the credit was wrongly availed and was not within the purview of Rule 6(3)(a). He reasons that the debit made in the CENVAT credit and the expunging of the CENVAT credit cannot be said to have been done erroneously. He finally rejects the claim, observing that what was wrongly availed had been reversed and that there was thus no question of a claim for refund.

Owners Must Pay Duty on Redeemed Confiscated Goods, Regardless of Who Imported It: CESTAT

Shri Dipesh Shah vs Commissioner of Customs (Port) CITATION: 2025 TAXSCAN (CESTAT) 214

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that an owner must pay customs duty on redeemed confiscated goods under Section 125(2) of the Customs Act, regardless of who originally imported them.

The tribunal explained that the appellant could not selectively claim ownership for redemption while disclaiming liability for duty. The tribunal ruled that duty is an unavoidable consequence of exercising the redemption option under Section 125(2). The tribunal upheld the Commissioner (Appeals)’s decision and dismissed the appeal.

Excise Duty on Aluminium Circles for Utensil Manufacturing: CESTAT Sets Aside Demand and Grants Exemption

M/s Mayur Aluminium Industries Private Limited VS Commissioner ofCentral Excise CITATION: 2025 TAXSCAN (CESTAT) 215

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside the excise duty demand on aluminium circles used for utensil manufacturing by the assessee.

The assessee’s counsel argued that the aluminium circles were used to make utensils, qualifying for exemption under Notification No. 67/95-CE dated 16.03.1995. Since duty was paid on the final goods, the counsel contended that the duty demand was not justified.

When There is no Revenue Loss, Liberal View Needs to be Taken: CESTAT quashes Excise Duty Demand

Welmech Engineering Company Pvt. Ltd vs Commissioner of GST &Central Excise CITATION: 2025 TAXSCAN (CESTAT) 216

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand, ruling that when there is no revenue loss, a liberal view must be taken.

The tribunal referenced the Supreme Court’s ruling in Sugandhi v. P. Rajkumar case where it was held that if a procedural mistake does not harm the other party, courts should focus on delivering fair justice rather than strictly enforcing technical rules. It also explained that litigation is meant to uncover the truth, which is the foundation of justice, and courts should take necessary steps to ensure fairness in every case.

CESTAT Sets Aside Demand and Penalty, Confirms 23.03.2004 as Date of Commercial Production for EOU De-bonding

M/s. Manaksia AluminiumCompany Limited vs Commissioner of Central Excise CITATION: 2025 TAXSCAN (CESTAT) 218

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the demand and penalty against the assessee, confirming 23.03.2004 as the date of commercial production for the purpose of de-bonding the unit from the Export-Oriented Unit (EOU) scheme.

However, in February 2012, the Customs Audit Department raised concerns regarding the assessee’s claim for excess depreciation on imported capital goods. The Customs department issued an audit query, which led to the issuance of a show-cause notice demanding a duty of Rs.58,68,773/- along with interest, along with penalties for the excess claim of depreciation. The matter was adjudicated, and the proposed demand along with interest was affirmed, and a penalty was imposed on the assessee.

CESTAT Upholds Rs. 9.56 Crore Excise Demand due to Fraudulent Refund Claims and Cenvat Credit Misuse

M/s. Kaizen Organics Pvt. Ltd vs M/s. Commissioner of Central Excise& Service Tax CITATION: 2025 TAXSCAN (CESTAT) 220

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has upheld an excise duty demand of Rs. 9.56 crore against M/s. Koolmint Manufacturing Company and M/s. Kaizen Organics Pvt. Ltd., along with penalties, due to fraudulent refund claims and misuse of Cenvat credit.

The adjudicating authority imposed a duty liability of Rs. 9.56 crore on Koolmint under Section 11D of the Central Excise Act, along with an equal penalty under Section 11AC. Kaizen Organics was also held liable for recovering Cenvat credit of Rs. 95.57 lakh, along with interest and penalties. The authority found that the entire scheme was orchestrated by the proprietors of Koolmint and Kaizen, who were father and son, to defraud the government by claiming undue refunds and passing on ineligible Cenvat credit.

CESTAT Grants Refund of Reversed Cenvat Credit as Exported Exempted Goods Qualify Under Rule 6(6)(v) of Cenvat Credit Rules

MACLEODS PHARMACEUTICALS LTD vs C.C.E. & S.T.-DAMAN CITATION: 2025 TAXSCAN (CESTAT) 221

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ),granted a refund of reversed Cenvat credit, ruling that exported exempted goods qualified under Rule 6(6)(v) of the Cenvat Credit Rules,2004.

The appellate tribunal concluded that since the appellant had paid an amount that was not due, they were entitled to a refund. It disagreed with the authorities’ argument that the reversal was not excise duty and therefore not eligible for refund under Section 11B. It also stated that the reversal was essentially a request for re-credit, which could be allowed if the reversal was not due.

Service Tax Demand not valid when Tax and Interest Paid much before Issuing SCN: CESTAT

Nimmi Buildtech Pvt. Ltd vs Commissioner of Central Excise & CGST,Kanpur CITATION: 2025 TAXSCAN (CESTAT) 222

In a recent case, the Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) observed that service tax demand not valid when tax and interest paid much before issuing show cause notice (SCN). It was observed that since the said amount has already been deposited by the party alongwith applicable interest the same should not be confirmed and appropriated against the said amount demanded from them.

In the case of Venu Enterprises, the following has been held that, ”Admittedly, the tax as well as the interest has been paid much before the issuance of SCN; even the SCN does not point out to suppression of fact, fraud or misstatement etc., the alleged activity was observed by the Audit Party from the appellant’s ST-3 returns only and it is not the case of the Revenue that there was gross violation by act of suppression, etc. In this background and on the above factual position, I am of the opinion that the bonafides of the appellant could not be doubted and hence, it is a fit case to invoke Section 80 of the Finance Act.”

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