Commissioner of Central Excise And Service Tax Vs Adani Power Mundra Limited (Supreme Court of India)
Refund of Service Tax on Ocean Freight stayed pending SC’ decision on ocean freight levy’s validity
The Hon’ble Supreme Court in the case of Commissioner of Central Excise & Service Tax Ahmedabad v. Adani Power Mundra Ltd. [Civil Appeal Diary No. 31293/2025 dated July 15, 2025] held that compliance with the CESTAT Ahmedabad’s order granting refund of service tax on ocean freight under reverse charge must await the final outcome of the pending appeal in SAL Steel Ltd. v. Union of India, which questions the constitutional validity of that levy.
Facts:
The Commissioner of Central Excise & Service Tax, Ahmedabad (“the Appellant”) challenged the CESTAT West Zonal Bench’s order dated November 21, 2024 (STA No. 10307/2023), which allowed Adani Power Mundra Ltd. (“the Respondent”) to claim a refund of service tax paid on ocean freight under reverse charge for input services used in SEZ-authorized operations.
The CESTAT’s reasoning was that “irrespective of the constitutional validity of the levy of service tax on ocean freight, which is before the Supreme Court in SAL Steel Ltd. v. Union of India,” the Respondent remained entitled to the refund under the applicable SEZ notification.
