World number 25 Kashyap fought his heart out but couldn't get past Bhat, ranked 46th, who registered a 21-13 21-17 win in the 52-minute men's singles battle.
Bhat, who had won the title in 2009 after four final appearances, raised his game in crucial moments to not only clinch the title but also kick start the new season on a positive note after a below par 2010.
On the final day of the 75th edition of the Championship, unseeded player Arundhati Pantwane's dream run also came to an end after losing to seventh seed Aditi Mutatkar.
Mutatkar, who ranks 81st in the world, beat Arundhati 19-21 23-21 21-15 in another gruelling battle to become the women's singles national champion.
In the mixed doubles final, second seeded pair of Pranav Chopra and Prajakta Sawant defeated top seeds Arun Vishnu and Aparna Balan 18-21 21-11 21-13 in a close match to annex the title.
The men's doubles category saw defending champions Rupesh Kumar and Sanave Thomas beat third seed pair of Manu Attaree and Jishnu Sanyal 21-15 21-9 to clinch the title seventh time in a row.
In another close encounter, top seed pair of Aparna Balan and Prajakta Sawant won against Prandnya Gadre and P Jyothsna 13-21 21-19 21-15 to clinch their maiden women's doubles championship title.
In the men's singles, it turned out to be a heart break for Kashyap who blew up a 5-0 lead in the first game and was left to do the catch up act by Arvind. The strapping Indian rubbed off the five-point deficit and then moved to 10-10 before galloping ahead.
The second game saw a fierce battle as Arvind and Kashyap fought tooth and nail and moved from 9-8 to 18-17 but it was the former who had the last laugh.
"I am very happy to win the title. I liked the way I played today. I had played Kashyap once before in 2010 Singapore but had lost the match. So it is nice to win against him here," he told reporters after the match.
Kashyap had reached the semifinals of Singapore Super series beating Bhat in straight-games in the quarterfinals in June last year.
Chief Minister of Haryana, Bhupinder Singh Hooda was the chief guest at the closing ceremony of the tournament, which was also attended by national coach P Gopichand, legendary player Prakash Padukone and Commonwealth Games gold medallist pair of Jwala Gutta and Ashwini Ponappa, who were honoured with Badminton Ratan award on the occasion.