Profit Sharing Agreement Between Mall And Parking Operator Not Lease, Not Subject To Tax: CESTAT Chennai

The Customs Excise and Service Tax Appellate Tribunal at Chennai on Friday held that a profit-sharing arrangement for managing a mall's parking facility does not amount to leasing of space and therefore is not liable to service tax. The appeal was against an order of Commissioner of Service Tax that had upheld a service tax demand of over Rs 20 lakh, treating the parking arrangement between CCCHPL and SPIPL as leasing of space and therefore taxable. A coram comprising Judicial Member Ajayan T...

Service Tax Provisions Under Finance Act Do Not Extend To Jammu & Kashmir: CESTAT Sets Aside ₹4 Crore Demand

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the provisions of service tax under the Finance Act, 1994, do not extend to the State of Jammu & Kashmir, and accordingly set aside a service tax demand of Rs. 4 crores. S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) opined that the provision of Chapter V of the Finance Act does not extend to J&K. Once the provisions of the Finance Act are not applicable in...

Black Tea Is Agricultural Produce, Commission Paid To Foreign Agents Not Liable To Service Tax : CESTAT Chennai

The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside service tax demand on commission paid to foreign agents for sale of black tea, finding that 'essential characteristic' of agricultural produce is retained. CESTAT Chennai clarified that black tea gets covered by the expression 'in relation to agriculture' appearing in Notification 14/2004-S.T. (as amended) dated September 10, 2004 observes that “Once the black tea is found to be agricultural...

Commission-Based Services To Foreign Clients As Agent Qualifies As 'Export Of Service': CESTAT

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that commission-based services such as sales facilitation and regional support services provided by Indian counterparts to foreign companies qualified as 'export' and not as 'Business Auxiliary Services'.The assessee was engaged in the manufacture and sale of zippers and parts thereof in India and to neighbouring foreign companies, including YKK Singapore located in Singapore. The Department conducted an...

Customs | Traveller Entitled To Release Of Goods If SCN Not Issued Within Time, No Liability To Pay Fine Or Penalty: Delhi High Court

The Delhi High Court has clarified that a traveller, whose goods are seized by the Customs, is not liable to pay a redemption fine or penalty for the release of goods if the Department failed to issue a show cause notice within the statutory timeframe.A division bench of Justices Prathiba M. Singh and Madhu Jain observed,“It is the settled position in law, after Union of India &Anr. v. Jatin Ahuja (/2024) that without a SCN under Section 110 of the Customs Act, 1962, the goods of the...

Externally Procured Parts Supplied To Customer For Assembly, But Not Used By Manufacturer, Aren't Liable To Excise Duty : Supreme Court

The Supreme Court on Monday (November 10) dismissed the Revenue Department's excise duty demand against a company that had manufactured and erected a large boiler at a customer's site, holding that the full contract value could not be subjected to central excise duty. The Court clarified that parts bought out externally and supplied to the customer for assembly, but not actually used by the manufacturer, would not attract excise duty. “we arrive at the finding that the final product that...

'Twaron Para Aramid Pulp' Classified As 'Textile Flock', Importers Liable For Higher Customs Duty: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Twaron Para Aramid Pulp is classified as 'textile flock', hence, the importers are liable for a higher customs duty. Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) were addressing the issue of whether the Twaron Para Aramid Pulp imported by the assessee was classified under Customs Tariff Item (CTI) 5601 22 00 or under CTI 5601 30 00. The case was whether the...

Supreme Court Issues Notice On Patanjali Foods' Rs 2.97 Crore Excise Duty Refund Appeal

The Supreme Court has recently issued notice in an appeal filed by Patanjali Foods Limited (formerly Ruchi Soya Industries Ltd.) seeking a refund of Rs 2.97 crore charged by the tax department in connection with an excise duty dispute. A Division Bench of Justice Pamidighantam Sri Narasimha and Justice Atul S Chandurkar issued notice on both the main appeal and the application seeking condonation of delay. The appeal challenges the Karnataka High Court's judgment dated September 30, 2024, and...

Refund Claims Are Time-Barred Despite Non-Obstante Clause U/S 142(5) CGST Act: CESTAT Rejects Mahindra Holidays' Appeal

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the Non-Obstante Clause in Section 142(5) of the CGST Act (Central Goods and Services Tax Act, 2017) cannot override the limitation under Section 11B of the Central Excise Act. Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) stated that section 142(5) does not refer to overriding any particular provision, and hence the non obstante clause has to be examined and given a...

Supreme Court Dismisses Rs 244 Crore Service Tax Plea Against Bharti Airtel Over Employee Scheme

The Supreme Court has recently dismissed a nearly Rs 244 crore service tax appeal filed by the Commissioner of Central Goods and Service Tax, Gurugram, against telecom giant Bharti Airtel Ltd. The dispute concerned the company's Airtel Employees Services Scheme (AESS), which offered free or discounted telecom services to its employees.The appeal challenged a January 27, 2025 order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, which had set aside the entire tax...

Advertisement, Promotional And Management Service Payments Excluded From Customs Valuation: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that Advertisement and Promotional Expenses and Management Service Fees (APE and MSF) payments are independent transactions, and cannot be included in the transaction value of imported goods. The issue before the Tribunal was whether the advertisement and promotional expenses incurred by the assessee in India are required to be added to the value of the imported goods, treating the said...

Customs | Importer Cannot Be Penalised For Misdeclaration Merely Because Other Importers Declared High Prices For Similar Goods: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that an importer cannot be penalised for misdeclaration merely because other importers declared high prices for similar goods under the Customs Valuation Rules. Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) opined that the mere fact that another importer had imported identical goods from the same overseas exporter at different prices does not prove that the assessee...