SERVICE TAX
CESTAT Mumbai Rules CENVAT Credit Cannot Be Denied Service Tax Paid By Grindwell Norton Supplier
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 17 February set aside the denial of Cenvat Credit of Rs. 3,99,183 to Grindwell Norton Ltd., reiterating that once service tax has been paid by the service provider and accepted by the department, it cannot be questioned. A Single Member Bench comprising Dr. Suvendu Kumar Pati (Judicial Member) passed the Final Order, noting that the disputed invoices were raised by the job worker under a belief that the...
CESTAT Kolkata Affirms CBEC Circular, Reiterates Sub-Contractor Independently Liable For Service Tax
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 6 February clarified that after the issuance of CBEC Master Circular No. 96/7/2007-ST dated 23 August 2007, a sub-contractor is independently liable to pay Service Tax on the services rendered by it, even where the main contractor has already discharged the Service Tax liability on the same project. A Bench comprising Judicial Member Ashok Jindal and Technical Member K. Anpazhakan, was examining the legality of...
CESTAT Quashes Service Tax Demand Against IBM India On Warranty Expense Reimbursements
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 6 February set aside service tax demands raised against IBM India Pvt. Ltd., holding that reimbursements received from overseas IBM entities towards warranty costs, in the absence of consideration for any service, cannot be taxed under “management, maintenance or repair” service. A Bench comprising Dr. D.M. Misra (Judicial Member) and Mrs. R. Bhagya Devi (Technical Member) passed the order allowing the...
No Service Tax On Adda Fees Collected At Amritsar Bus Terminal: CESTAT Chandigarh
The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 3 February held that adda fees collected for the use of the Amritsar bus terminal are not liable to service tax. The Bench, comprising Mr. S. S. Garg, Member (Judicial) and Mr. P. Anjani Kumar, Member (Technical), clarified that the entire bus-terminal constructed by the Appellant could not have been built to support the business of bus operators. Bus terminals are created as a public utility service and...
Salaries And Consultancy Reimbursements To Foreign Joint Venture Not Taxable: CESTAT Chennai
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 5 February held that reimbursements made by an Indian company to its overseas joint venture do not constitute consideration for taxable services and are therefore not liable to service tax under the Finance Act, 1994. A Bench comprising Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao dismissed the appeal filed by the Revenue and upheld the order dropping the service tax demand against...
Forfeited Security Deposits And Tender Fee Do Not Attract Tax: CESTAT Delhi
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) on 3 February held that forfeiture of the Earnest Money Deposit (EMD), Security Deposit (SD) and collection of tender fee do not attract service tax, as such amounts cannot be treated as consideration for a declared service under the Finance Act, 1994. A Bench comprising Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya, allowed the appeal filed by RajComp Info Services Limited, an...
Bombay High Court Reiterates That Service Tax Is Not Applicable On Legal Services
The Bombay High Court recently allowed a writ petition filed by an advocate, holding that legal services rendered by an advocate are exempted from levy of service tax. On 5 February, a Bench of Justice G.S Kulkarni and Justice Aarti Sathe held that the proceedings were squarely covered by the Court's earlier decision in Advocate Pooja Patil v. Deputy Commissioner. The Court observed: “8. The present proceedings also would stand covered by such notifications and the position in law as held by...
Service Tax On Ocean Freight In CIF Imports Illegal: Karnataka High Court
The Karnataka High Court has held that service tax cannot be levied on ocean freight in imports made on a CIF (Cost, Insurance and Freight) basis, as such services fall outside the scope of the Finance Act, 1994.“The Act itself would be inapplicable to territories other than India and the Executive would not have the power to make rules for territories beyond India and where the events could be described to be extra territorial events i.e., service provided by a foreign exporter and a...
Superintendent Cannot Adjudicate Cases Involving Extended Limitation: Calcutta High Court
The Calcutta High Court on 2 February held that cases that invoke the extended period of limitation are expressly excluded from the adjudicatory powers of a Superintendent, even if the demand falls within their monetary limit. Justice Om Narayan Rai, allowed a writ petition filed by the partners of Radiant Security, challenging an order by which the Superintendent, CGST, demanded service tax of Rs. 72,000 along with education cess and secondary and higher secondary cess, and imposed penalties...
Calcutta High Court Upholds Service Tax On C&F and Transport of Steel, Excludes Bending & Bundling
On 4 February, the Calcutta High Court held that service tax applies to “Clearing and Forwarding” (C&F) services and transport expenses for steel products. The Court clarified that activities such as transporting, storing, forwarding, and record-keeping fall within the scope of C&F services, while bending, bundling, and stock verification of goods do not. A Division Bench of Justices Rajasekhar Mantha and Ajay Kumar Gupta dismissed an appeal by Naresh Kumar & Co., which claimed...
Are Skin & Hair Care Treatments Taxable As Cosmetic Surgery? CESTAT Delhi Seeks Fresh Examination
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), on 30 January, asked the lower authorities to re-examine whether skin and hair care treatments provided by a clinical establishment qualify as “Cosmetic and Plastic Surgery Services” and are therefore liable to service tax. A Bench comprising Judicial Member Binu Tamta and Technical Member Rajeev Tandon was examining an appeal filed by Trichoderm, a Delhi-based clinical establishment operating under the brand...