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

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.

Security services qualify as input service u/r 2(l) of CCR, as service utilized for manufacture of dutiable final products: CESTAT

M/s Grasim Industries Limited vs Commissioner, CGST CITATION : 2025 TAXSCAN (CESTAT) 739

The Allahabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that security services qualify as input services under rule 2(l) of the Cenvat Credit Rules(CCR),2004, as services utilized for the manufacture of dutiable final products.

Standardize Accounting Policies – Specimen Drafts at Your Fingertips! Perfect for internal reference and client consistency - Click here

In lieu of security services, M/s. Fitcomb Secure Service, raised invoices on the Appellant with applicable Service Tax. Upon receipt of such invoices, the Appellant paid the total consideration amount, including the service tax, to M/s, Fitcomb Secure Service and availed Cenvat credit of the Service Tax paid on such invoices. Cenvat credit was availed by the Appellant under a bona fide belief that the said services had a direct nexus with the manufacturing activity of the Appellant, thereby qualifying as an eligible input service defined under Rule 2 (1) of the Credit Rules.

Industrial gases in VITT transported by carrier agency upon issue of Consignment Note qualify as GTA service and not renting and leasing: CESTAT

M/s. Reehal Roadlines vs Commissioner of CGST & Central Excise CITATION : 2025 TAXSCAN (CESTAT) 740

The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Industrial gases in VITT transported by carrier agency upon issue of a consignment note qualify as GTA service and not renting and leasing.

Respondent-Department’s stand is that such service does not constitute Goods Transport Agency service but a declared service namely transfers of goods by way of hiring, leasing, licensing etc. without transfer of rights to use the goods in terms of Section 66E(f) of the Act. Accordingly, Appellant was put on show-cause notice for the above said period with above referred amount as Service Tax demand along with interest and penalty and subsequently it got adjudicated against Appellant’s stand that resulted in confirmation of duty demand, interest and penalty as referred above. Legality of the said order is assailed before this forum.

Kerala HC Upholds validity of SCN Served on Adult Member of Noticee u/s 153 of Customs Act

MANU VALIYAVEETTIL MADHU vs ADDITIONAL COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 1206

The Kerala High Court upheld the validity of a show cause notice served on the adult member of the noticee under Section 153 of the Customs Act, 1962. The contentions of the petitioner that the proper opportunity was denied to contest the matter cannot be accepted while upholding the validity of the notice served.

Your ultimate guide for mastering TDS provisions - Click here

According to the petitioner, at the time when the show cause notice was issued, he was abroad and therefore, he could not submit a proper reply to the said show cause notice. It was also averred in the writ petition that, the elderly parents of the petitioner, who were served with the notice, lacked the requisite literacy or understanding, with regard to the contents of notice, and thus the petitioner was deprived of an opportunity to provide a timely reply to show cause notice.

Demand of Service Tax cannot be Solely based on Income Tax Data in Form 26AS: CESTAT Quashes Demand

M/s Shree Ganesh Telecom Pvt.Ltd vs Commissioner (Appeals) CITATION : 2025 TAXSCAN (CESTAT) 741

In a recent case, the New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that the service tax demand cannot be based solely on Income Tax Data in Form 26AS without establishing receipt of consideration and held that the appellant is wrongly alleged to have suppressed the material facts.

Cash Transactions Can Lead to Fines! Are you at risk? Click here

Counsel for the appellant has submitted that the demand of service tax based on the income tax returns/any third party data is not sustainable. Further submitted that while replying to the audit memo pointing out the said shortcoming itself, the appellant had explained the reason for non-payment of the equivalent amount of service tax. It was clearly informed to the department that the amount which has not been received by the appellant has not been included in the taxable value and the tax has otherwise been fully paid on the amount of consideration received by the appellant.

Declaration of Value of Goods Cannot be Treated as Suppression Merely Being Incorrect: CESTAT quashes Penalty under Customs Act

M/s Goldstar Glasswares Pvt.Ltd. vs Principal Commissioner of Customs CITATION : 2025 TAXSCAN (CESTAT) 742

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that the declaration of the value of goods was a bonafide declaration and merely because it is ultimately found to be incorrect will not mean that the valuation was with a bad motive not declared correctly and quashed the penalty under the Customs Act, 1962.

The appellant is a private limited company with Arjinder Singh Gulati and Nirmal Paul Gulati as Directors of the Company. The appellant started the unit in 1988 and manufactured Opel Glassware but the unit was subsequently closed. Thereafter, the appellant started manufacturing melamine table wares (crockery) by using food grade melamine, which is manufactured through a high pressure process.

CENVAT Credit Cannot Be Denied If Service Tax Is Paid and Accepted: CESTAT Remands All Nippon Airways’s Case for Verification

M/s. All Nippon Airways Co Ltd.vs Commissioner Service Tax-IVCITATION : 2025 TAXSCAN (CESTAT) 743

The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that CENVAT credit cannot be denied if service tax has been paid and accepted by the Revenue, even if it does not qualify as a taxable service. The Tribunal remanded the matter for verification of service tax payments of five interconnected appeals filed by All Nippon Airways Co. Ltd

Cash Transactions Can Lead to Fines! Are you at risk? Click here

The Revenue contended that the services, such as those related to PSF, DF, and UDF, were provided by airport operators like the Airports Authority of India and Mumbai International Airport Pvt. Ltd., and not by the airline. As a result, it was alleged that the airline was not eligible to take CENVAT credit on input services used in respect of those charges.

Penalty on Co noticee is invalid when main case is settled under SVLDRS: CESTAT

SHRI RAJENDRA PYARELAL AGRAWALvs COMMISSIONER CENTRAL GST & CENTRAL EXCISECITATION : 2025 TAXSCAN (CESTAT) 745

The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that once the duty demand case is settled under SVLDRS-2019, as per scheme itself, there is a waiver of penalties on the main assessee against whom, the demand was confirmed as well as on other co-noticees.

Crack the Fraud Code. Master the Law. Stay Ahead! Click here

The above mentioned show cause notice was adjudicated by the lower adjudicating authority vide the order dated 22.12.2017 confirming demand of Central Excise duty of Rs. 20,36,913/- against appellant No. 1 under Section 11A(10) of the Central Excise Act, 1944 along with interest on the confirmed demand under Section 11AA of the Act and imposed penalty of Rs. 20,36,913/-. Upon appellant No. 1 under Section 11AC(1) of the Act with benefit of reduced penalty and also imposed penalty of Rs. 2,00,000/- upon appellant No. 2 under Rule 26(1) of the Rules.

CESTAT Quashes Provisional Release Order of Seized Goods based on Furnishing Bank Gurantee as Circular not require furnishing same for Star Export Houses

M/s B P Wire Industry vs Commissioner, Customs (Preventive), LucknowCITATION : 2025 TAXSCAN (CESTAT) 744

The Allahabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed the provisional release order of seized goods which required the furnishing of bank guarantee on finding that Circular 32/2009-Cus dated 25.11.2009 is justified as this does not require furnishing of bank Guarantee for any category for Star Export Houses.

When GST Disputes Knock—Answer with the Gavel - Click here

The High Court examined Section 129C(4) of the Customs Act and held that a bare reading of the said provision that any case, which is assigned to a Bench can be decided by one of the members sitting singely if the value of the goods confiscated without option to redeem under Section 125 does not exceed Rs 50 lakhs.

Assessment of Two or More Bills of Entry or Shipping Bills Together is not Permissible: CESTAT

M/S DISHA REALCON PVT LTD vs COMMISSIONER OF CUSTOMS ADJUDICATION CITATION: 2025 TAXSCAN (CESTAT) 224

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has stated that two or more bills of entry or shipping bills cannot be taken together and assessed. The bench viewed that the exporter cannot claim an exemption for all of the shipping bills after combining the products exported under several shipping bills and taking a sample.

While allowing the appeal, the bench added that “The fact that the goods under both Shipping Bills were loaded in the same vessel or even in the same hatchet of the vessel or exported to the same party would make no difference. It does not give the department the power to re-determine the duty. Conversely, if after mixing the goods exported under different Shipping Bills and drawing a sample, the Fe content falls below the threshold, the exporter cannot claim exemption for all the Shipping Bills. Each Shipping Bill must be assessed individually,”.

Failure to maintain record of goods received on subcontracting: CESTAT upholds Confiscation u/s 111 of Customs Act

M/s Encee International NSEZ vs Commissioner of Customs, NoidaCITATION: 2025 TAXSCAN (CESTAT) 223

The Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the confiscation under section 111 of the Cutoms Act, 1962 as asseessee failed to maintain record of goods received on subcontracting.

Further, as per Rule 42 (4) of the SEZ Rules, 2006 unit may sub-contract a part of production or production process in another unit within the same SEZ if the movement of goods has been recorded under serially numbered challans and the record of movement has been maintained. In the present matter, Appellant No.3 is maintaining records of movement of goods sub-contracting under serially numbered vouchers and have also maintained job work register showing inward and outward movement of goods. Therefore, as far as Appellant No.3 is concerned, it has maintained complete record as per the requirement of the law.

CESTAT Chandigarh Rules IT and Business Support Services are not Intermediary Services

M/s Saxo India Private Limited vs Commissioner of Central Excise and Service Tax CITATION: 2025 TAXSCAN (CESTAT) 227

The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) Chandigarh has ruled that Information Technology Software Services ( ITSS ) and Business Support Services ( BSS ) provided to foreign clients qualify as export services and do not fall under intermediary services. The tribunal directed the refund of unutilized CENVAT credit, rejecting the Revenue Department’s claim that the services were intermediary in nature.

Recent GST Rulings You Can’t Ignore! Are you updated? Click here

In conclusion, the CESTAT Chandigarh Coram composed of S S Garg ( Judicial Member ) and P Anjani Kumar ( Technical Member ) ruled in favor of the appellant, holding that the IT and Business Support Services provided to foreign clients do not fall under intermediary services. The tribunal directed the refund of unutilized CENVAT credit, rejecting the Revenue’s claim that the company acted as an intermediary. The ruling emphasized that direct service providers, without a facilitation role between two parties, cannot be classified as intermediaries under Rule 9 of the Place of Provision of Services Rules, 2012.

Reversal of Cenvat Credit on Trading of Exempted Goods: CESTAT Remands matter for Verification

M/s Supreme & Company Private Limited vs Commissioner of CentralExcise CITATION: 2025 TAXSCAN (CESTAT) 229

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the file for verification of Cenvat Credit on Trading Activities.

The CESTAT held that the assessee is responsible for paying the appropriate CENVAT credit related to the exempted products or trade activities, together with interest if it hasn’t been paid yet, and if it is paid, the adjudicating body will confirm whether the assessee is liable for the whole amount due to the reversal of the CENVAT credit.

Mistaken Service Tax Payment not Subject to Refund Limitation u/s 11B of the Central Excise Act: CESTAT

M/s. National Buildings Construction Corporation Ltd vs Commissioner ofCentral Excise and Service TaxCITATION: 2025 TAXSCAN (CESTAT) 230

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a mistaken Service Tax payment is not subject to the refund limitation under Section 11B of the Central Excise Act, 1944.

The appellate tribunal relied on rulings in M/s. OIL India Ltd. v. CCE (2023), Venkatraman Guhaprasad v. Commissioner of G.S.T. (2020), and Commissioner v. KVR Construction (2018), which held that mistaken tax payments were refundable without time limits. The Supreme Court also upheld this view in KVR Construction.

Unravel the Tax Puzzle with the Supreme Court’s Wisdom! Click here

Following these precedents, the bench ruled that the refund claim was valid and not subject to Section 11B. The case was sent back to the adjudicating authority for reconsideration, with a directive to decide within three months.

CESTAT Allows SSI exemption to Sabari Kitchen Service as per CBEC Circular

M/s. Sabari Kitchen Services (P) Ltd. vs Commissioner of GST and CentralExcise CITATION: 2025 TAXSCAN (CESTAT) 231

In a recent case, the Chennai bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) allowed the SSI exemption to Sabari Kitchen Service as per CBEC Circular. The bench found that the Appellant using the brand name of others did not own that particular brand name during investigation which according to the Revenue itself was the brand name registered for other different products.

The use of brand name “SaBARI” in the instant case can be termed as fortuitous, there being no intention on the part of the appellant to use the said brand name to show a connection with the Assessee’s goods and such other person. Moreover, it was submitted that the Appellants are the owners of the brand name as their brand is reflected in all their invoices and products since 2004 as the unique red flame differentiated their brand name from others and moreover there were no objections to the usage of this brand name. Others who have registered the brand name for different products cannot entertain any objection, if the same is used for different products.

Discrpency in Excise Duty Computaion: CESTAT Directs to recompute after Deducting Value of Bought out items, value of clearances to SEZ units etc

Sabari Kitchen Services (P) Ltd vs Commissioner of GST and Central Excise CITATION: 2025 TAXSCAN (CESTAT) 231

In a recent case related to allegation of Discripencies in Computation of excise duty, the Chennai bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) has directed to recompute the duty after deducting the value of Bought out items, value of clearances to SEZ units and other post manufacturing expenses.

On the issue of quantification of duty payable, it is evident that the value of sales by the Appellants was ascertained on the basis of IT Returns filed and its financial statements for the financial years from 2009-2010 to 20132014. The Counsel for the Appellants Shri S. Durairaj has stated in his written submissions and also during the hearing before the Tribunal that the total turnover reflected in the balance sheets and the financial statements included the sale of manufactured items to units situated in a SEZ, the sale of bought out items (trading) and erection charges i.e., post manufacturing expenses and if these were excluded, the annual value of clearances of the manufactured goods under SaBari brand was always less than the threshold exemption limit of Rs.1.5 crores for all the years except for 2013-2014 and 2014-2015.

CESTAT allows Cenvat Credit on Capital Goods Used for Both Dutiable and Exempted Products

Commissioner of GST & Central Excise, Bhubaneswar Commissionerate vsM/s. Paradeep Phosphates Ltd.CITATION: 2025 TAXSCAN (CESTAT) 235

The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the eligibility of Cenvat Credit on capital goods used for the manufacture of both dutiable and exempted products.

The bench found no merit in the Revenue’s appeal. The Tribunal noted that it was undisputed that the capital goods in question were used to produce phospho-gypsum, a dutiable product. Therefore, the denial of Cenvat Credit on these capital goods was unjustified, and the provisions of Rule 6(4) were not applicable in this case.

CESTAT Sets Aside Service Tax Demand, Remands Case for Re-Evaluation Over Form 26AS Reliance

M/s Paragon Power Systems vs Pr. Commissioner of Central Tax &Customs CITATION: 2025 TAXSCAN (CESTAT) 233

The Hyderabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside a service tax demand against and remanded the case back to the original adjudicating authority for re-evaluation.

The bench noted that the appellant had stated several reasons, including the COVID-19 pandemic and a fire accident in their office, for their inability to provide the necessary documents and explanations during the adjudication process. In the interest of fairness and justice, the bench decided to remand the case back to the original adjudicating authority for a fresh hearing. The appellant was allowed to produce all possible evidence to support their claim that the income in question did not arise from taxable services or was otherwise exempt.

‘Even on the Strength of endorsed bill of entry, CENVAT Credit is admissible’: CESTAT

The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that even on the strength of the endorsed bill of entry, CENVAT credit is admissible.

The bench relied on the judgment of CESTAT Ahmedabad in the case of Khushboo beauty care 2021 (7) TMI 1231 in which the CESTAT held that “if the Bill of Entry supported with declaration given by the importer is a valid document for availing the credit by the job worker, therefore, in view of my above observation coupled with the judgment in the case of Trichem Lab (Bombay) Pvt. Ltd.(supra), I am of the clear view that the appellant is entitled for Cenvat credit on the strength of Bill of Entry even though the same is in the name of M/s Marico Limited but with a declaration in favour of the appellant. Accordingly, the impugned order is set aside. The appeal is allowed.”

Co-Owners not an Association of Persons: CESTAT Quashes Service Tax Demand on Rent Receipts

KRISHNAKANT DIPAKBHAI PATEL vs COMMISSIONER OF SERVICE TAX-SERVICE CITATION: 2025 TAXSCAN (CESTAT) 236

The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that co-owners of a property cannot be treated as an “Association of Persons” (AOP) and quashed a service tax demand on rent receipts.

How to deal with GST special audit and departmental audit? Register Now

The bench, after going through various judgements, reached the conclusion that “there is no entity like an association of persons in the present case therefore the receipt of rent by individual cannot be clubbed together and demanded the service tax therefore the demand of service tax is not sustainable.

Extended Limitation cannot be Invoked Twice for the Same Issue: CESTAT

M/s. Neo Metaliks Limited vs Commissioner of Central Excise and ServiceTax CITATION: 2025 TAXSCAN (CESTAT) 237

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) rules that the extended period of limitation cannot be invoked twice for the same issue.

Neo Metaliks Limited,appellant-assessee,challenged the Order-in-Appeal, where the Commissioner (Appeals) upheld the Deputy Commissioner’s decision confirming a demand of Rs. 58,938, including cess, along with interest and an equal penalty. The dispute involved the denial of CENVAT credit for services availed by the Head Office in 2008-09, including courier, rent, retainership fees, air tickets, commission, bus rental, labor charges, telephone, and car hire.

Citing the Supreme Court’s ruling in Nizam Sugar Factory v. CCE, the tribunal held that once a demand was raised using the extended period, another demand could not be issued for the same issue in a later period. Therefore, it concluded that the demands in the subsequent notices were not sustainable.

Clandestine Removal of Fatty Acid as RPO: CESTAT Sets Aside Rs. 53.38 Lakh Duty Demand Due to Lack of Evidence

Sri Deepak Keshan M/s. Budge Budge Refineries Ltd vs Commissioner of Central Excise Kolkata-VII Commissionerate

CITATION: 2025 TAXSCAN (CESTAT) 238

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) sets aside Rs. 53.38 Lakh duty demand in the case of clandestine removal of Fatty Acid as Refined Palm Oil (RPO) due to lack of evidence.

The two member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) found that the demand of Rs. 53,38,184/- for the alleged clandestine removal of Fatty Acid as RPO was based on assumptions, not solid evidence. The department relied on lab records showing a Free Fatty Acid (FFA) content of 4.8% to 5.6%, while only 2% to 4% was shown as recovered. However, the statement from N.K. Giri, GM (Technical), explained that the FFA percentage could vary due to several factors, which the department had ignored.

CESTAT Sets Aside ₹10 Lakh Penalty under Rule 26(1) Due to Lack of Goods Confiscation

Shri Ramesh Garg, Chairman of M/s K.S. Oil Ltd vs Commissioner, CGST,Customs & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 240

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)set aside a ₹10 lakh penalty imposed under Rule 26(1) of the Central Excise Rules, 2002, due to the absence of goods confiscation.

Rule 26 of the Central Excise Rules, 2002,(1)] Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or ten thousand rupees, whichever is greater.

CESTAT upholds Penalty Imposed u/s 76 of Finance Act on TASMAC in absence of Payment of Service Tax

M/s. Tamil Nadu State Marketing Corporation Ltd. vs Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 242

The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the penalty imposed under section 76 of Finance Act, 1994 on Tamil Nadu State Marketing Corporation Ltd. (TASMAC) in the absence of Payment of Service Tax. It was observed that w.e.f. 1-7-2012, all services except those excluded by Section 65B (44), in particular, transfer of title in goods, deemed sale, transaction in money etc. will be liable to service tax or those falling in the negative list of services under Section 66D ibid or those which were specifically exempted otherwise, would be exigible to service tax levy.

The bench observed that the imposition of penalty under section 76 of the Finance Act, 1994 is statutory in nature and becomes payable when there is a failure to pay service tax in the normal course. It was found that the Tribunal in the appellants own case concluded that the entire dispute was one of interpretation and subsequently dropped penalties under section 77 & 78 of the Finance Act 1994. Relying that the CESTAT dropped all other penalties i.e. other than that of section 76.

CESTAT Dismisses Customs Appeal on Approval of Resolution Plan by NCLT

M/s.Neoteric Infomatique Ltd. vs Commissioner of Customs (Air)CITATION: 2025 TAXSCAN (CESTAT) 243

The Chennai bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) disposed of the Customs appeal as it was abated on approval of resolution plan by National Company Law Tribunal (NCLT).

Since the appellant-assessee file dappeal praying for the closure of appeal in view of their resolution plan being accepted by the NCLT, the two member bench of P. Dinesha, Member (Judicial) and M. Ajit Kumar, Member (Technical) disposed the appeal as it stand abated.

Service of Drilling Rig for Exploration Activities of Cauvery Block in India not falls under ‘Consulting Engineers: CESTAT

M/s. Nikoresources (NELPV) Ltd. vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 244

In a recent case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) gas held that service of drilling rig for exploration activities of Cauvery Block in India does not fall under ‘consulting engineers and the bench set aside the demand of service tax.

While the agreement involves a host of services, a two member bench of Shri P. Dinesha, Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) observed thatthe dominant intention of the contract is for providing operational services i.e. providing Drilling Rig along with personnel and related services to NIKO for its exploration activities of Cauvery Block in India and not for the services of ‘consulting engineers’. This being so revenue has failed to prove its allegation that the classification of the service is that of ‘consulting engineer’ service as per section 65(31) of the Finance Act, 1994.

Date of Cenvat Credit Refund Claim is to be taken as Date on which Original Refund Claim was Acknowledged by Excise Dept: CESTAT

Vishay Transducers Pvt Ltd vs The Commissioner of CGST & CentralExcise CITATION: 2025 TAXSCAN (CESTAT) 245

In a recent case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the date of the cenvat credit refund claim under Cenvat Credit Rules (CCR), 2016 is to be taken as the date on which the original refund claim was acknowledged as received by the Excise Department.

On paragraph 2.4 of Chapter IX of the Central Excise Manual supplementary instructions which in fact states inter-alia that submission of refund claim without supporting documents will not be allowed. Indisputably it is an admitted fact that the original refund claim filed was returned to the appellant. When the prevailing instructions itself according to the Appellate authority requires that submission of refund claims without supporting documents is not to be allowed, the factum of its return presupposes its filing with supporting documents, albeit later found to be of incomplete nature.

CESTAT Sets aside Demand of Service Tax under “Manpower Recruitment Supply Agency Service” in absence of Supply of Any Labourers

M/s. Arunachalam vs Commissioner of GST and Central Excise CITATION: 2025 TAXSCAN (CESTAT) 246

The Chennai bench of the Customs, Excise And Service Tax Appellate Tribunal (CESTAT) set aside the demand of service tax under “Manpower Recruitment Supply Agency Service” in the absence of supply of any labourers. The bench found that the department failed to prove that there was a supply of manpower.

The Tribunal found that there is a reference to the said letter in the OIO at para 14.4 but unfortunately, the Adjudicating Authority has not given finding on this factual aspect. Hence, it is to be accepted that the Appellant undertook various activities like grinding, RT upgradation, gouging, machining, etc., which were claimed to be used as components of the boilers used in the thermal/nuclear power plants and therefore, the said activities undertook by the appellant would amount to “manufacture” as claimed by the Appellant. By this, therefore, the authorities below have erred in ignoring this specific plea which otherwise would have entitled the appellant to the benefit of Notification No. 8/2005 supra.

Rule 8 of Central Excise Valuation Rules Applicable only when Manufactured Goods are Captively Consumed by Manufacturer: CESTAT

M/s Perfect Mechanical Industries vs Commissioner of Central Goods and Service Tax CITATION: 2025 TAXSCAN (CESTAT) 247

The Chandigarh Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) recently clarified that Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, applies only when manufactured goods are captively consumed by the manufacturer themselves or another manufacturer on their behalf.

The two-member Bench of Judicial Member S.S. Garg and Technical Member P. Anjani Kumar observed that in such a scenario, CENVAT cannot be imposed on a third-party fabricator when the chassis is duty-paid and the final sale occurs after the vehicle is returned to the manufacturer.

CESTAT set aside the impugned order while referencing a prior judgment of the Principal Bench in a similar matter filed by the same Appellant while affirming that excise duty is payable only on the value added by the body builder, not on the entire vehicle.

Failure to File Application within time for Continuation of Appeal even after Death of Proprietor: CESTAT Dismisses Appeal

M/s.Sambathe Carriers vs The Commissioner of GST & Central Excise CITATION: 2025 TAXSCAN (CESTAT) 241

The Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) dismissed the appeal as the asseessee failed to file application for continuation of appeal before the tribunal even after death of the proprietor. The court found that no request has been made for condoning this delay, rather there is no mention of the delay at all.

A two member bench of P. Dinesha, Member (Judicial) and Vasa Seshagiri Rao, Member (Technical) viewed that Rule 22 of the CESTAT (Procedure) Rules, 1982 requires that such an application be made within a period of 60 days of the occurrence of the event, which in the present case is the death of the proprietor. The present purported application has been filed more than three years after the death of the proprietor. Even if the date of granting GST Registration to the wife of the appellant is considered, it is still a case of inordinate delay. It is true that the second proviso to Rule 22 ibid confers the power upon us to condone a delay in the filing of the application, for sufficient cause.

Orders-In-Original to be Posted at Conspicuous Part of Factory u/s 37(1) Excise Act before Posting on Dept. Notice Board: CESTAT

Patel Steels vs Commissioner of C.E. & S.T. CITATION: 2025 TAXSCAN (CESTAT) 248

The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has ruled that an Order-in-Original under the Central Excise Act, 1944 must first be affixed at a conspicuous part of the factory before it can be posted on the notice board of the department.

Emphasizing that service of an Order-in-Original must strictly adhere to the prescribed order – first through registered post, then to be affixed at the factory, and only upon the failure of these steps shall the same be posted on the departmental notice board.

No CENVAT Levy on Third Party for Mounting Duty-Paid Chassis on Vehicles later Returned to Manufacturer for further Sale: CESTAT

M/s Perfect Mechanical Industries vs Commissioner of Central Goods andService Tax CITATION: 2025 TAXSCAN (CESTAT) 247

The Chandigarh Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) recently ruled that a third-party vehicle body modifier is not liable for Central Value Added Tax (CENVAT) in the process of mounting duty-paid chassis on vehicles that are later returned back to the manufacturer for further sale.

The two-member Bench constituted by Judicial Member S.S. Garg and Technical Member P. Anjani Kumar upheld the contentions raised by the Appellant, holding that CENVAT cannot be imposed on a third-party fabricator when duty has already been paid on the chassis and the final sale occurs after the vehicle is returned to the manufacturer.

CESTAT Sets Aside Order for Failure to Examine Unjust Enrichment Aspect in LNG Import Duty Dispute

M/s Ratnagiri Gas & Power Pvt. Ltd vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 249

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, set aside an order for failure to examine the aspect of unjust enrichment in a dispute related to liquefied natural gas (LNG) import duty. The case arose from an appeal filed by Ratnagiri Gas & Power Pvt. Ltd. (RGPPL) against an order dated 19.08.2014 issued by the Commissioner (Appeals), Central Excise & Customs, Goa.

CESTAT reviewed the case and noted that the authorities had failed to examine the unjust enrichment aspect thoroughly. The tribunal observed that RGPPL had submitted financial records, Chartered Accountant certificates, and ledger accounts to substantiate its claim that the duty burden had not been passed on. It found merit in RGPPL’s argument that in cases of provisional assessment where the entire quantity is not discharged, unjust enrichment should not apply. CESTAT referred to previous decisions in Petronet LNG Ltd. and Hazira LNG Pvt. Ltd., supporting the contention that duty on un-imported goods should be refunded.

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