Mobilisation Advances Received Before 2011 Not Taxable at Receipt Stage: CESTAT Hyderabad Grants Relief To NCC Ltd

The Customs, Excise and Service Tax Appellate Tribunal, Hyderabad, has ruled that mobilisation advances received prior to the introduction of the Point of Taxation Rules, 2011, are not liable to service tax at the stage of receipt, granting partial relief to NCC Ltd.The Hyderabad Bench comprising Judicial Member Angad Prasad And Technical Member A.K. Jyotishi observed that the statutory framework prior to 1 March 2011 did not mandate payment of service tax on advances before actual...

CESTAT Delhi Says Govt Reimbursement Grant For Daawat Foods Plant Not Taxable As Service

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has granted relief to Daawat Foods Ltd., holding that grant-in-aid received by it from the Government as reimbursement of expenditure is not liable to service tax as it does not constitute consideration for any service. A Bench of Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya ruled that the financial assistance did not give rise to any service provider–recipient relationship. “As the...

CESTAT New Delhi Allows Pre-GST CENVAT Credit Refund Under Reverse Charge Mechanism To Yokohama India

On 7 April, the Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi allowed Yokohama India Pvt. Ltd. to claim a cash refund of CENVAT credit paid under the Reverse Charge Mechanism (RCM) for the pre-GST period. Judicial Member Dr. Rachna Gupta clarified that Section 142(3) of the CGST Act protects such vested rights and the refund cannot be denied simply because the tax was paid after GST or due to alleged suppression without evidence. She observed: ...

Total Turnover Determines Eligibility For Tax Exemption, Not Just Taxable Services: CESTAT New Delhi

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 7 April, held that to claim exemption under Notification No. 25/2012-ST, the “turnover” of a business entity includes its entire income and not just taxable services. Therefore, if the total turnover exceeds the prescribed limit, a refund of service tax cannot be granted.A Bench comprising Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya dismissed the appeal filed by Jal Mahal...

CESTAT Hyderabad Sets Aside Penalty Against Biofuels Company As Service Tax Paid Before SCN

The Customs, Excise and Service Tax Appellate Tribunal at Hyderabad has recently set aside penalties imposed on Universal Biofuels Pvt. Ltd., holding that the tax department should not have issued a show cause notice after the company had already paid the full service tax with interest. A coram of Technical Member A.K. Jyotishi and Judicial Member Angad Prasad observed, “In view of the factual matrix of this appeal, we find that in this case, in the first place, the SCN itself should not have...

Production Work For Broadcaster Liable To Service Tax Even With Copyright Transfer: CESTAT Chennai

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 2 April, held that service tax is leviable on the production of a television serial on behalf of a broadcaster under “programme producer's service”, even where the agreement provides for perpetual assignment of copyright. A Bench comprising Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V. dismissed the appeal filed by Sathya Jyothi Films and upheld the service tax demand with interest and...

CESTAT Hyderabad Upholds Service Tax On Services Received From Abroad Classified As IPR

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 2 April, held that services received from abroad classified as Intellectual Property Rights (IPR) services attract service tax.A Bench comprising Technical Member A.K. Jyotish and Judicial Member Angad Prasad partially allowed an appeal by MLR Motors Ltd, allowing the taxpayer to discharge such liability through CENVAT credit for the period prior to 1 July 2012. The Tribunal observed:“the services...

Mere Sale Of Advertising Space Without Creative Input Not Taxable Under Finance Act: CESTAT Chennai

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 2 April held that mere sale of advertising space, without any element of designing, conceptualising or preparing advertisements, does not amount to taxable “advertising agency service” under the Finance Act, 1994. A Bench comprising Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V. held: “under Section 65(3) of the Finance Act, 1994, service tax applies only where services of making,...

Service Tax Payable On Manpower Supply To Government Hospitals: CESTAT Delhi Upholds ₹64.61 Lakh Demand

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has upheld a service tax demand of Rs 64,61,530 against a firm supplying manpower to Government hospitals. The tribunal held that the appellant was not eligible for the benefit of the reverse charge mechanism under a 2012 notification, as the service recipients were not “business entities registered as a body corporate.” A coram of Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya dismissed the...

Bombay HC Quashes Rs. 1.26 Crore Service Tax Demand For Failure To Comply With Pre-SCN Process

The Bombay High Court on 12 March, quashed a service tax show cause notice, holding that failure to conduct mandatory pre-show cause notice (pre-SCN) consultation, as required under CBEC circulars, vitiates the entire proceedings. A Bench of Justices G. S. Kulkarni and Aarti Sathe held that pre-SCN consultation, mandated by circulars issued under Section 37B of the Central Excise Act, is a binding requirement and cannot be bypassed merely because summons were issued to the taxpayer. The Bench...

Coronation Park Is a Historical Site, Construction There Is Exempt from Service Tax: CESTAT New Delhi

The Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at New Delhi has held that Coronation Park, being a historical site of national importance, is eligible for exemption from Service Tax under Notification No. 25/2012-ST. A Bench comprising Judicial Member Binu Tamta and Technical Member Hemambika R. Priya heard cross appeals filed by Ajab Singh & Co. and the Revenue against a common Order-in-Original passed by the Commissioner, Rohtak. The Bench...

CESTAT Chennai Rules Transportation Charges Not Taxable In C&F Services Before May 2015

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 1 April, held that reimbursable transportation charges paid to a clearing and forwarding (C&F) agent do not form part of the taxable value of services for the period prior to the 2015 amendment to the Finance Act. A Bench comprising Technical Member M. Ajit Kumar and Judicial Member Mr. Ajayan T.V. partly allowed the appeal filed by Toll India Logistics Pvt. Ltd., clarifying that only the consideration...