Non-Filing Of Service Tax Returns Alone Doesn't Prove Tax Evasion; CESTAT Chennai Quashes ₹37.54 Lakh Demand

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand of ₹37.54 lakh against SPI Technologies India Pvt. Ltd., holding that the Department could not invoke the extended limitation period merely because the alleged tax liability surfaced during a departmental audit. The tribunal held that the revenue had failed to establish the wilful suppression or intent to evade tax required to invoke the extended period. A bench of Judicial...

Ahmedabad CESTAT Grants Service Tax Relief On Government Staff Quarters, Remands APMC Issue

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 9 July held that construction of residential staff quarters and government infrastructure meant for personal use of government employees is not liable to service tax under the Finance Act, 1994.Technical Member Sanjiv Srivastava and Judicial Member Dr. Ajaya Krishna Vishvesha partly allowed the Revenue's appeal against contractor Paresh S. Patel. While it granted relief for construction works undertaken for...

CESTAT Delhi Allows Shriram General Insurance's KKC, SBC Refund Claim On Cancelled Insurance Policies

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi has allowed Shriram General Insurance's claim for refund of ₹28.57 lakh paid towards Krishi Kalyan Cess (KKC) and Swachh Bharat Cess (SBC) on insurance policies that were subsequently cancelled. The tribunal held that the refund could not be denied on the grounds of limitation or unjust enrichment after the insurer refunded the proportionate premium and tax component. Judicial Member Binu Tamta and Technical Member...

CESTAT Allahabad Sets Aside Service Tax Demand On Bottle Cleaning and Repacking Done For Liquor Manufacturers

The Allahabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand of ₹49.70 lakh against a job work service provider. It held that activities such as repacking old bottles, repackaging glass bottles, barcode sticking, and bottle cleaning carried out for liquor manufacturers constituted exempt intermediate production processes under Entry 30(c) of Notification No. 25/2012-ST. The bench of Judicial Member P.K. Choudhary and Technical...

ITAT Ahmedabad Upholds Rejection Of Tax Deduction Claim On ₹12 Lakh Donation To Political Party

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the denial of a tax deduction claimed by a salaried taxpayer on a ₹12 lakh donation made to a political party, holding that he failed to establish that the contribution was genuine and eligible for deduction. A division bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary observed, "the assessee has failed to establish that the impugned contribution represented a genuine donation eligible for...

Revenue 'Officially But Illegally' Usurped Income: CESTAT Kolkata Orders Interest On Wrongly Collected Service Tax

Observing that the revenue had "officially but illegally" usurped more than half of an employee's annual income, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, directed the department to pay 6% annual interest on the amount collected from her. The tribunal held that the interest would run from the date the amount was collected until the date it was refunded.A coram of Judicial Member R. Muralidhar observed, "The severity of such a demand is beyond imagination when it...

Hyderabad CESTAT Holds Unutilised Education Cess Credit Cannot Be Refunded, Rejects ₹22.11 Lakh Claim

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 8 July held that unutilised Education Cess, Secondary and Higher Education (SHE) Cess and Krishi Kalyan Cess (KKC) lying in the CENVAT credit account as on 30 June 2017 cannot be refunded under Section 142 of the Central Goods and Services Tax (CGST) Act, 2017. Judicial Member Angad Prasad and Technical Member P. Anjani Kumar dismissed the appeal filed by Hexagon Capability Centre India Private Limited...

Non-Recourse Sale Of Future Rent Receivables Not Borrowing Or Interest For TDS Purposes: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 6 July held that discounting charges arising from the assignment of future rent receivables on a non-recourse basis cannot be treated as interest under the Income-tax Act, 1961, and therefore do not attract tax deduction at source (TDS) under Section 194A (which requires deduction of tax on interest other than interest on securities). A Single Member Bench comprising Judicial Member R. Muralidhar allowed seven appeals filed by OPC...

CESTAT Bangalore Sets Aside Service Tax Demand Against Hindustan Newsprint Employees Co-operative Bank

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Bangalore, has granted relief to Hindustan Newsprint Employees Co-operative Bank Ltd. in a service tax matter.It observed that reimbursed employee wages and other employment-related benefits cannot be included in the taxable value for service tax under Manpower Recruitment or Supply Agency Service for the period prior to 14 May 2015.The bench comprising Judicial Member P.A. Augustian and Technical Member R....

CESTAT Mumbai Awards ₹50,000 Costs After Holding Department Harassed Taxpayer Over ₹33,373 Pre-Deposit Refund

The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has imposed ₹50,000 as compensatory litigation costs on the Department after observing that proceedings over the refund of a mandatory pre-deposit of ₹33,373 appeared to have been unnecessarily initiated and were meant to harass a genuine taxpayer. The tribunal directed the Department to refund the pre-deposit along with statutory interest. A single-member tribunal of Judicial Member Dr. Suvendu Kumar Pati...

CESTAT Mumbai Holds Investment Advice To Overseas Client Is Export, Allows Tata Realty Refund

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 7 July held that investment advisory services provided by an Indian company to an overseas client qualify as export of service, even if the advice relates to investment opportunities in India. Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban allowed the appeal filed by Tata Realty & Infrastructure Ltd. and held that the company was entitled to refund of accumulated CENVAT credit as the...

Delhi High Court Refuses Higher Interest On Service Tax Refund Beyond Statutory 6% Rate

The Delhi High Court has dismissed an appeal seeking enhancement of interest from 6% to 12% per annum on the refund of a service tax deposit made during investigation, holding that once the statute prescribes the rate of interest payable, courts cannot award a higher rate in the absence of any challenge to the statutory provision or the notification issued thereunder.A Division Bench of Justices Anil Kshetrapal and Shail Jain upheld a CESTAT order granting interest at 6% per annum under Section...