Top Stories CESTAT Weekly Round-Up [Jan 18 to Jan 24, 2025] A Round-Up of the CESTAT Cases Reported at Taxscan Last Week By Adwaid M S – On January 26, 2025 11:44 am – 4 mins read This weekly round-up analytically summarizes the key stories related to the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) reported at Taxscan from 18 January 2025 to January 24 2025. Cost of Parts Supplied by Principal Manufacturer not Part of Job Worker’s Assessable Value: CESTAT Electronic Instrumentation and 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. 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-RAIPUR CHHATTISGARH 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.