Customs | Face Recognition Access Control Systems Qualify As Automatic Data Processing Machines; NIL Duty Benefit Allowed: CESTAT Kolkata

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Face Recognition Access Control Systems perform data processing functions, such as data storage, read-write memory operations and automated processing, and therefore qualify as an Automatic Data Processing Machine under CTH 8471. The bench clarified that these systems are eligible for NIL customs duty exemption. R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) noted that...

Third-Country Invoicing Inapplicable For Electronic/Non-Electronic Toy Parts From China For Preferential Customs Duty Benefit: Mumbai AAR

The Mumbai, Customs Authority for Advance Ruling (CAAR) has clarified that there's no concept of third-party invoicing or third-country invoicing or third-country trade under the Rules for Determination of Country-Of-Origin under the Asia Pacific Trade Agreement (APTA) for imports of electronic or non-electronic toy-parts from China when Swiss supplier invoices Jparks India. In a ruling dated December 11, 2025 Shri. Prabhat K. Rameshwaram rejected Applicant's reliance placed on Circular...

Third-Country Invoicing Inapplicable For Electronic/Non-Electronic Toy Parts From China For Preferential Customs Duty Benefit: Mumbai AAR

The Mumbai, Customs Authority for Advance Ruling (CAAR) has clarified that there's no concept of third-party invoicing or third-country invoicing or third-country trade under the Rules for Determination of Country-Of-Origin under the Asia Pacific Trade Agreement (APTA) for imports of electronic or non-electronic toy-parts from China when Swiss supplier invoices Jparks India. In a ruling dated December 11, 2025 Shri. Prabhat K. Rameshwaram rejected Applicant's reliance placed on Circular...

Delhi HC To Hear IndiGo's Plea For ₹900+ Crore IGST & Customs Duty Refund On Re-Imported Aircraft Parts; Customs Alleges No Double Levy

The Delhi High Court is set to hear a plea by Interglobe Aviation Limited (Indigo) over denial of an estimated refund of over Rs. 900 crores of Integrated Goods and Services Tax (IGST) and Customs duty on re-imported aircraft parts that were repaired abroad. The Customs Writ Petition filed on December 11, 2025 was mentioned before a Bench comprising Justice Prathiba M. Singh and Justice Shail Jain. As a common practice in the Aviation sector, aircraft components overseas are sent for...

Delhi High Court Flags Validity Of Reports In IGST Refund Denial On Export Of Mouth Fresheners/Pan Masala; Directs Expeditious Examination

The Delhi High Court in a matter involving export of mouth freshner/pan masala, where two differing Test Reports were issued and refund of Integrated Goods and Services Tax (IGST) was denied, has flagged validity of Central Revenues Control Laboratory (CRCL) test reports. Justice Prathiba M. Singh and Justice Shail Jain were hearing writ petitions filed by Exporters/Petitioners of tobacco products including pan masala and mouth fresheners who had challenged the letter issued by Customs...

Customs Act | Mens Rea Mandatory For Penalty U/S 114AA; Assessee Cannot Be Punished On Assumptions: CESTAT Chennai

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that a penalty under Section 114AA of the Customs Act cannot be imposed unless the department proves mens rea and a clear act of abetment with cogent evidence. The Tribunal clarified that Section 114 has a penal character of being a penalty in personam, placing the burden squarely on the Customs Department to establish the guilt. Section 114AA of the Customs Act, 1962, penalises the use of false...

CENVAT Credit Rules | Storage Of Finished Goods Outside Factory Due To Space Constraints Covered Under Rule 2(l); Credit Cannot Be Denied: CESTAT

The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that storing finished goods outside the factory premises due to space constraints is connected with the assessee's business operation. Therefore, CENVAT (Central Value Added Tax) credit on 'warehousing services' is admissible as an 'input service' under Rule 2(l) of the CENVAT Credit Rules, 2004 and cannot be denied.P.K. Choudhary (Judicial Member) stated that how a business has to be run cannot be dictated...

Customs | Goods Cannot Be Confiscated Solely On Local Market Survey/Opinion Without Proof Of Smuggling: CESTAT Allahabad

The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that goods cannot be confiscated merely on the basis of a local market survey or opinion in the absence of proof of smuggling. The Tribunal observed that the burden to prove that the goods are smuggled lies on the department.P.K. Choudhary (Judicial Member) stated that the Department has not discharged its burden. Since betel nuts are also produced in India. In the absence of any evidence that confiscated...

Bottling Pepsi Doesn't Mean Promoting Pepsi's Goods; No Business Auxiliary Service: CESTAT Quashes Service Tax Demand

In a significant relief to SMV Beverages Pvt. Ltd., the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has held that incentives received from Pepsi Foods for advertising and promotional activities cannot be taxed under Business Auxiliary Service (BAS). The Tribunal followed a Larger Bench ruling which categorically held that section 65(19) of the Finance Act does not cover promotion of brand name or trademark of a client.A Bench comprising Mr. S.K. Mohanty (Judicial...

Service Tax | Commission Earned From Foreign Suppliers Is 'Export Of Service': CESTAT Mumbai Sets Aside Demand Against Paramount Dyes

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has held that commission received in India for facilitating sales of goods for foreign suppliers amounts to “export of service” and cannot be taxed under the category of Business Auxiliary Service (BAS).A Bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) allowed the appeal filed by the assessee, setting aside the Service Tax demand, interest, and penalties relating to the period...

Customs | Knitted Ready-Made Garments Fall Under CTH 6102, 10% Drawback Rate Applicable: CESTAT Kolkata

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that knitted ready-made garments, such as Gents' shirts, Ladies' dresses, and coats, are classifiable under CTH 6102; hence, the exporters are entitled to a 10% drawback rate subject to a maximum of Rs. 45/- per piece. R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) stated that from the descriptions of the goods as contained in the concerned shipping bills, it can be...

Import Of Technical Designs Not 'Design Service'; No Extended Limitation Or Penalty: CESTAT Mumbai

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has delivered a significant ruling holding that import of technical know-how, engineering drawings and designs transferred permanently for manufacturing in India cannot be taxed as “Design Services” under the Finance Act, 1994.A Bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) set aside the entire Service Tax demand of ₹21.79 crore, along with interest and penalties, confirming that the...