The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has partly allowed appeals filed by the Commissioner of Central Goods & Service Tax (CGST), Dehradun, in a high-stakes excise duty dispute involving Hindustan Unilever Limited (HUL) and its job workers, M/s Today Jobs and M/s Maxima Solutions.
The Bench of Justice Dilip Gupta (President) and Member (Technical) P.V. Subba Rao, held that the exemption could not be forced on an assessee for periods before they formally opted for it. Comparing the choice to an insurance claim decision, the Tribunal stressed that opting for the exemption is a business decision with implications such as loss of CENVAT credit.
The dispute arose from activities such as labelling, packing, pouching, and wrapping of HUL products undertaken by the job workers during 2009–10. Initially, both job workers had treated these activities as taxable services under “Business Auxiliary Service” and paid service tax. However, the department contended that these processes amounted to “manufacture” under the Central Excise Tariff, making them liable for central excise duty instead.
A key point in the case was the applicability of area-based exemption Notification No. 50/2003-CE, which offers full excise duty exemption to eligible manufacturers in certain notified areas if they opt for it in advance. Both Maxima and Today filed declarations to avail the exemption — Maxima effective from March 15, 2010, and Today from March 30, 2010 — but the CGST Commissioner had extended the benefit retrospectively, dropping the duty demands entirely.
The Tribunal upheld duty demands for Maxima Solutions from August 1, 2009, to March 14, 2010 and Today Jobs from July 1, 2009, to March 29, 2010.
Demands beyond these dates were set aside, as the exemption applied from the dates mentioned in their declarations.
The Tribunal refused to impose penalties under Section 11AC of the Central Excise Act, noting no evidence of fraud, suppression, or intent to evade duty. It also quashed the proposed penalty on HUL under Rule 26, finding no allegation of goods liable for confiscation or fraudulent invoicing.
Case Details
Case Title: Commissioner Of Central Goods And Service Tax-Dehradun Versus M/S Hindustan Unilever Limited
Case No.: EXCISE APPEAL NO. 52196 OF 2024
Date: 11/08/2025
Counsel For Appellant: Rakesh Agarwal
Counsel For Respondent: M.H. Patil
Read More: ITR 2025 Filing Season: Why Freelancers Face Different Tax Rules Than Salaried Employees?
Mariya is the Senior Editor at Juris Hour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
