This weekly round-up analytically summarizes the key stories related to the Customs Excise and Service Tax Appellate Tribunal (CESTAT) reported at Taxscan from 01 June 2025 to June 07 2025.
Amendment of Bill of Entry to Claim CVD Exemption After Five Years Not Allowed Without Reassessment: CESTAT Sets Aside Appellate Order
Commissioner of Customs (Port) vs M/s. Krish Fabrics India Pvt. Ltd. CITATION: 2025 TAXSCAN (CESTAT) 596
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) set aside the Appellate order, holding that amending a Bill of Entry to claim Countervailing Duty ( CVD) exemption nearly five years after import was not permissible without reassessment.
The Bangalore Tribunal dismissed the appeal, stating the correction could not be treated as a clerical error under Sections 149 or 154. The appellant failed to claim the exemption at the time of assessment and tried to amend the Bill of Entry nearly six years later.
EPCG Exemption for Sericulture Projects Does Not Waive Block-Wise Export Obligation, Only Average Export Requirement: CESTAT
M/s Kasare Vanya Silk Mills Pvt. Ltd vs The Commissioner, Customs CITATION: 2025 TAXSCAN (CESTAT) 600
The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the exemption under the EPCG notification for sericulture projects waives only the requirement to maintain average export performance and does not exempt exporters from meeting export obligations within specified time blocks.
The two-member bench comprising Justice Dilip Gupta and Technical Member P.V. Subba Rao held that while the exemption under the EPCG notification removed the need to maintain average export performance, it did not remove the obligation to meet the specified export targets in each time block. The tribunal upheld the recovery of customs duty with 15 percent interest for failure to meet the obligation. It found no evidence of diversion of goods or deliberate suppression and set aside the related duty demand, penalties, and confiscation orders.
CESTAT Holds Construction Services for DDA Not Taxable Under CCIS as Projects Serve Public Purpose
M/s Vats Builders& Suppliers vs Principal Commissioner of Central CITATION: 2025 TAXSCAN (CESTAT) 599
The Delhi Bench of Customs,Excise and Service Tax Appellate Tribunal (CESTAT ) held that construction services provided to the Delhi Development Authority (DDA) for Commonwealth Games 2010 projects are not taxable under Commercial or Industrial Construction Services (CCIS) as these works served a public purpose.
Regarding the water supply line at Saket Sports Complex, although the assessee denied having executed the work, the tribunal noted that this claim was made by counsel before the adjudicating authority. Still, it held that such work fell outside the scope of taxable commercial construction, as supported by earlier decisions in Hyundai Heavy Industries, Nagarjuna Construction Co., and Indian Hume Pipe Co. Ltd.
Redemption Fine Not Justified on Re-Exported Goods Due to Supplier’s Mistake: CESTAT
Durga Computers vs Commissioner of Customs CITATION: 2025 TAXSCAN (CESTAT) 598
The Mumbai Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the redemption fine was not justified on goods re-exported due to the supplier’s mistake.
The appellate tribunal pointed out that the law on imposing a redemption fine on goods allowed to be re-exported was settled by earlier decisions, including one from this bench in Skylark Office Machines. That decision said if goods are allowed for re-export, no redemption fine can be imposed.
No Service Tax Liability on Artwork and Design Charges Paid in Foreign Currency: CESTAT
M/s. Artifacts India vs Commissioner of Central Excise (Appeals) CITATION: 2025 TAXSCAN (CESTAT) 601
The Delhi Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT )held that no service tax was payable on artwork and design charges paid in foreign currency.
However, the purchase order with the client M/s TESCO showed the appellant was required to pay these charges as per the agreement. The artwork charges were received by the buyer abroad, and the appellant paid them according to the contract. There was no proof that the assessee received design services. Therefore, no service tax was due on these charges.
Extended Limitation Not Invocable When Service Tax Demand is Based Solely on Income Tax Disclosures: CESTAT
Ajitabh Mishra vs Commissioner of Central Excise & CGST CITATION: 2025 TAXSCAN (CESTAT) 602
The New Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the extended period of limitation under Section 73 of the Finance Act, 1994, cannot be used when the case is based only on information already shared in the assessee’s income tax returns and financial records.
The bench, led by Judicial Member Binu Tamta, observed that the appellant had already shared all the financial details in his tax returns and balance sheet, and these records were used by the department itself to make the case. The tribunal observed there was no proof that the appellant had tried to hide anything.
Bank Charges Paid to Foreign Banks Not Taxable Under Reverse Charge Mechanism: CESTAT
M/s. Artifacts India vs Commissioner of Central Excise (Appeals) CITATION: 2025 TAXSCAN (CESTAT) 601
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that bank charges paid to foreign banks are not taxable under the Reverse Charge Mechanism ( RCM ) as the service is provided outside India and there is no direct service relationship between the foreign bank and the Indian exporter.
The CESTAT also relied on the decision in Greenply Industries Ltd. v. CCE, where it was held that no tax is applicable if there is no direct link between the foreign bank and the Indian exporter. Accordingly, the tribunal ruled that service tax was not applicable on the foreign bank charges paid by the assessee.
No Service Tax Liability on Foreign Commission Payments under RCM as They Constitute Trade Discounts: CESTAT
M/s. Artifacts India vs Commissioner of Central Excise (Appeals) CITATION: 2025 TAXSCAN (CESTAT) 601
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that there is no service tax liability on foreign commission payments under the Reverse Charge Mechanism (RCM) as they constitute trade discounts.
The appellate tribunal observed that while commission agent services fall under “business auxiliary service,” and reverse charge applies when such services are received from abroad, the key factor is identifying the actual service recipient. It referred to the purchase order from M/s TESCO, which stated that artwork charges, foreign bank charges, and agent commission were to be borne by the assessee as part of the sale terms.
Accrued CENVAT Credit is a Statutory Right and cannot be denied without Clear Legal Provision: CESTAT
Shri India Cotton Mills Pvt. Ltd. vs Commissioner of GST & CentralExcise CITATION: 2025 TAXSCAN (CESTAT) 597
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that CENVAT credit, once validly availed, is a statutory right and cannot be retrospectively taken away unless explicitly provided by law.
The tribunal ruled that the amended Rule 11(3) cannot operate retrospectively to deny credit earned before its insertion. It held that the revenue’s attempt to apply the rule to past credits was legally unsustainable and violative of the principle that vested rights cannot be taken away without explicit legislative intent.
ERP Services to Overseas Client Held Export: CESTAT Quashes Service Tax Demand on Limitation Grounds
M/s. South Nests Software Solutions Pvt. Ltd vs Commissioner of GST andCentral Excise CITATION: 2025 TAXSCAN (CESTAT) 603
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the service tax demand raised on ERP development services provided to a foreign entity was not maintainable as the entire demand was barred by limitation.
The tribunal explained that when facts are already disclosed in official filings, the longer five-year limitation period cannot be applied without clear evidence of intent to evade tax. Since the show cause notice was issued beyond the normal 30-month period from the date of filing the last return, the entire demand was time-barred.
100% EOU Can Carry Forward Accumulated CENVAT Credit Upon De-bonding to DTA Unit: CESTAT
M/s. Stanadyne India (P) Ltd vs Commissioner of GST & Central Excise CITATION : 2025 TAXSCAN (CESTAT) 607
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a 100% Export Oriented Unit (EOU) is entitled to carry forward accumulated CENVAT credit upon de-bonding and conversion into a Domestic Tariff Area (DTA) unit, subject to verification of facts. The tribunal set aside the order passed by the Commissioner (Appeals) and remanded the matter back to the original authority. The adjudicating authority was directed to verify the relevant facts and decide the issue in line with the High Court’s ruling. The appeal was disposed of accordingly.
Overseas Services by Tech Mahindra’s Subsidiaries are Not Taxable in India: CESTAT denies Refund on CENVAT & Service Tax Paid
Tech Mahindra Ltd. vs Commissioner of Service Tax-I CITATION : 2025 TAXSCAN (CESTAT) 613
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) recently dismissed all 12 appeals filed by Tech Mahindra, rejecting its claim for refund of accumulated Central Value Added Tax (CENVAT) credit and service tax. It further appreciated the revenue’s argument that the services in question were performed independently by the subsidiaries without the involvement of the appellant company, hence failing to qualify for input tax under Rule 2(l) of the Cenvat Credit Rules , 2004, further substantiating the denial of refund claims.
‘Service Tax cannot be levied when there is no flow of Consideration’: CESTAT sets aside Rs. 31.5 lakhs demand on Corporate Guarantee
M/s. Wellworth Project Developers Private Limited vs Commissioner ofCGST CITATION : 2025 TAXSCAN (CESTAT) 611
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be levied when there is no flow of consideration and set aside Rs. 31.5 lakh demand on corporate guarantee. One of the issues in this case was in relation to the demand of service tax on corporate guarantees for the financial year 2017-18. An amount of Rs 31.5 lakhs was demanded towards corporate guarantees for the financial year 2017-18.
Leasing of Oxygen Plant Equipment by Praxair India Not a Financial Lease, Not Taxable as Financial Service: CESTAT
Praxair India Private Limited vs The Commissioner of Central Excise& Service Tax CITATION : 2025 TAXSCAN (CESTAT) 617
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Bangalore, has held that the activity of leasing oxygen plant equipment by Praxair India Pvt. Ltd. does not amount to a “financial lease” and thus cannot be taxed under the category of “Banking and Other Financial Services.” Further, the bench of P A Augustian (Judicial member) and R. Bhagya Devi (Technical member) noted that in Praxair’s own earlier case decided in 2018, a similar issue was adjudicated in its favour, where it was conclusively held that the equipment leasing arrangement was an operating lease and did not fall under financial leasing services. The earlier decision, having attained finality, was binding on the current case as well.
Relief for Patna Municipal Corporation: CESTAT Rules Licensing Fee for Mobile Towers Not Taxable as ‘Renting of Immovable Property’
M/s. Patna Municipal Corporation vs Commissioner of Central Excise andService Tax CITATION : 2025 TAXSCAN (CESTAT) 618
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that licensing fees collected by the Patna Municipal Corporation for mobile towers cannot be classified as “renting of immovable property” and are not liable to service tax.
The tribunal found merit in the appellant’s argument that licensing fees collected for mobile towers were not periodic rent but permission fees and thus did not fall within the scope of “renting of immovable property.” The tribunal also ruled that ISBT parking charges did not constitute rent and should not attract service tax.
Relief for Patna Municipal Corporation: CESTAT Rules Licensing Fee for Mobile Towers Not Taxable as ‘Renting of Immovable Property’
M/s. Patna Municipal Corporation vs Commissioner of Central Excise andService Tax CITATION : 2025 TAXSCAN (CESTAT) 618
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that licensing fees collected by the Patna Municipal Corporation for mobile towers cannot be classified as “renting of immovable property” and are not liable to service tax. The tribunal found that the department had not clearly defined the basis for one of the miscellaneous rent demands and set it aside. It also held that since the appellant had disclosed all transactions in its books and there was no intent to evade tax, the extended limitation period and associated penalties under Sections 78, 77(1)(a), and 77(1)(c) could not be invoked. However, the late fee for delay in filing service tax returns was upheld.