Customs Cannot Reclassify Fabrics Without Laboratory Test To Determine Composition: CESTAT Kolkata

On 25 August, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata held that Customs authorities cannot change the classification of imported fabrics merely on the basis of their description without conducting a laboratory test to determine their actual composition. A Bench comprising Judicial Member R. Muralidhar and Technical Member K. Anpazhakan set aside a Rs. 39.12 lakh differential customs duty demand against Elvance Overseas LLP, holding that the Department could not...

CESTAT Hyderabad Says Sample Purchase Orders Cannot Establish All Sales Were FOR Sales

On 25 August, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad held that the Revenue cannot presume that all sales were on FOR (Free on Road) basis merely from sample purchase orders relied upon in the show cause notice. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad dismissed the Department's appeal against Eco-Care Building Products Pvt. Ltd. and upheld the dropping of the substantial portion of the differential Central Excise duty demand for the...

Madras High Court Quashes ₹4.56 Crore Customs Duty Demand Against Shipping Forwarder

The Madras High Court on 19 August set aside a Rs. 4.56 crore differential customs duty demand, along with interest and penalties, imposed on the proprietor of The Sea Shipping Forwarders. A Single-Judge Bench comprising Justice Hemant Chandangoudar held that the Customs Department failed to record a specific finding, supported by cogent evidence, that the petitioner had prior knowledge of the concealed goods or knowingly facilitated their concealment and attempted duty evasion. He held: ...

Calcutta High Court Upholds Reassessment Against Chirania Projects, Orders Personal Hearing

The Calcutta High Court on 18 August upheld reassessment proceedings initiated against Chirania Projects Private Limited for Assessment Year (AY) 2019-20, while directing the Assessing Officer to provide the company an opportunity of personal hearing during the reassessment. Justice Smita Das De passed the order while hearing the company's writ petition challenging the 30 June 2025 order under Section 148A(3) of the Income Tax Act and the consequential notice under Section 148. She observed: ...

Rajasthan High Court Says Supplier's Tax Payment Mandatory For ITC, Upholds Recovery From Buyer

The Rajasthan High Court on 17 August held that actual payment of tax by the supplier to the Government is a mandatory condition for availing Input Tax Credit (ITC) under Section 16(2)(c) of the Central Goods and Services Tax (CGST) Act, 2017, and that the credit can be recovered from the purchaser if the supplier fails to pay the corresponding tax. A Division Bench comprising Justices Dr. Pushpendra Singh Bhati and Praveer Bhatnagar dismissed a writ petition filed by Shree Karni Electrovision,...

Arbitrary Turnover Projections Cannot Support Best-Judgment Service Tax Assessment: CESTAT New Delhi

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 21 August held that best-judgment assessment under Section 72 of the Finance Act, 1994 cannot rest on arbitrary percentage growth or earlier-year turnover when actual financial records are available. A Bench of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan set aside an order confirming Service Tax and CENVAT credit liabilities of about Rs. 60 crore against Twenty Four Guarding Private...

Interest On Trust's FDs Taxable Without Specific Donor Direction For Corpus: Madras High Court

The Madras High Court on 17 August held that interest earned on fixed deposits maintained by a Trust is taxable revenue receipt where donors have not specifically directed that such interest form part of the Trust's corpus. A Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed an appeal filed by St. Joseph's Development Trust, upholding the addition of Rs. 94.66 lakh as taxable interest income for Assessment Year (AY) 2017-18. The judges held: ...

Supreme Court Directs Union To Consider 60-Day Tax Relief For Seafarers Stranded In India During COVID-19

The Supreme Court on 21 August directed the Union of India to sympathetically consider representations filed by Merchant Navy Officers and Ladies Association (MNOLA) seeking a 60-day tax exemption for Indian seafarers who remained in India for more than 182 days during the COVID-19 pandemic. A Bench comprising Chief Justice Surya Kant with Justices Joymalya Bagchi and V. Mohana disposed of the writ petition without expressing any opinion on merits and directed the Union to take an appropriate...

Natural Rubber Latex Toy Balloons Classifiable As 'Toys', Not As 'Rubber Articles': CESTAT New Delhi

On 24 August, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi held that toy balloons made of natural rubber latex are classifiable under Customs Tariff Heading (CTH) 9503 as “toys” and not under Chapter 40 as “rubber products.” Officiating President Dr. Rachna Gupta and Technical Member Hemambika R. Priya upheld the Revenue's classification of the goods imported by Vee Vee Enterprises, JMD Impex and V.K. Import Export Co. stating that specific functional...

Calcutta HC Upholds ₹752 Cr. Relief For Syama Prasad Port, Says Actuarial Contributions Not Limited

The Calcutta High Court on 21 August upheld the deletion of tax disallowances totalling over Rs.752 crore from the assessment of Syama Prasad Mookherjee Port, Kolkata, (formerly Kolkata Port Trust) and dismissed the Revenue's appeal against the Income Tax Appellate Tribunal (ITAT), Kolkata's order. A Division Bench comprising Justices Rajarshi Bharadwaj and Uday Kumar observed that extraordinary contributions to approved superannuation and gratuity funds made to meet actuarial shortfalls cannot...

Rajasthan High Court Says Customs Cannot Recover Excess Drawback Without Reassessment

The Rajasthan High Court on 12 August held that Customs authorities cannot directly invoke Section 75A(2) of the Customs Act, 1962 to recover alleged excess drawback without first reassessing the exporter's self-assessment under Section 17 of the Act. A Division Bench comprising Justices Munnuri Laxman and Sangeeta Sharma allowed writ petitions filed by Bhati & Company and Latiyal Handicrafts Pvt. Ltd. and granted the Customs authorities liberty to proceed under Sections 17 and 18 of the...

Supreme Court Sets Aside GST Notice Against Tata Steel, Says 'Suppression' Must Have Factual Basis

The Supreme Court has set aside a GST show cause notice issued to Tata Steel Limited and the consequential Order-in-Original dated 26 December 2025, holding that the Department could not invoke the extended limitation period under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act), merely by using the words “suppression of facts” without setting out the foundational facts supporting the allegation. A Bench of Justices J.B. Pardiwala and K. Vinod Chandran held that where the...