CESTAT Allahabad Upholds ₹5.22 Lakh Service Tax Demand, Holds Services To Non-Educational Institutions Not Exempt

The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently upheld a service tax demand of ₹5.22 lakh, along with interest and penalties, against DK Infosolutions Pvt. Ltd. It held that the company was not entitled to claim exemption meant for services provided to educational institutions because its services were rendered to commercial entities. A single-member bench of Technical Member Sanjiv Srivastava dismissed the company's appeal. The tribunal...

CESTAT Kolkata Sets Aside ₹6.25 Lakh Service Tax Demand Based Solely On Annual Income Tax Statement

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand of ₹6.25 lakh raised against an assessee after finding that the Department issued a show cause notice solely on the basis of Form 26AS (an income tax statement reflecting tax deducted at source and certain specified financial transactions) without carrying out any independent verification or investigation. The tribunal ultimately quashed the demand on the ground of limitation....

Taxpayer Cannot Invoke Section 73(4B) Limitation After Delaying Service Tax Proceedings: P&H High Court

The Punjab and Haryana High Court on 2 July held that the one year period prescribed under Section 73(4B) of the Finance Act, 1994 for passing adjudication orders in cases involving the extended period of limitation is not mandatory in all circumstances and cannot be invoked by a taxpayer whose own conduct caused delay in the proceedings. A Division Bench comprising Acting Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor dismissed the appeal filed by Sanjay Verma, an architect and...

Imported Aluminium Panels Used In Mivan Formwork Not 'Moulds' For CENVAT Credit: CESTAT Bengaluru

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 7 July held that aluminium panels imported for use in Mivan formwork cannot be treated as “moulds” for availing Cenvat credit merely because they are assembled into mould-like structures after import. Judicial Member P. A. Augustian and Technical Member R. Bhagya Devi allowed the appeal filed by the Revenue against an order granting Cenvat credit to Puravankara Projects Ltd., noting that the goods must be...

Volvo Not Liable To Pay Service Tax On Royalty Paid For Technical Know-How: CESTAT Bangalore

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Bangalore has ruled that Volvo Buses (India) Pvt. Ltd. is not liable to pay service tax on royalty paid to its Swedish parent company for technical know-how under a Technical License Contract Agreement. The tribunal held that there was no material to show the royalty was paid towards any intellectual property right recognised under Indian law. A bench of Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi...

Department Cannot Selectively Recalculate Service Tax On Works Contract Invoices: CESTAT Bengaluru

The Bengaluru Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 3 July held that the Department cannot selectively compute differential service tax on works contract services by accepting taxpayer's valuation methodology for some invoices while rejecting it for others. Judicial Member P. A. Augustian and Technical Member R. Bhagya Devi allowed two appeals and partly allowed another appeal filed by M.N. Associates challenging differential service tax demands raised by the...

No Service Tax On Reimbursement Of Actual Electricity Charges Recovered From Tenants: CESTAT Chennai

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that reimbursement of actual electricity charges recovered from tenants is not liable to service tax, observing that electricity is "goods" and such recoveries cannot be treated as consideration for a taxable service. The tribunal observed, “Further, eelectricity is specifically recognized as "goods" under the Central Excise Tariff Act and various State VAT laws. Hence reimbursements or collections...

Separately Sold Study Material And Student Fee Waivers Not Taxable To Service Tax: CESTAT New Delhi

The New Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 6 July held that coaching institutes do not have to pay Service Tax on the value of study material sold separately or on scholarships and fee concessions granted to students. Service Tax applies only to the coaching fee actually collected from students and not to amounts that the institute never charged or recovered. Judicial Member Binu Tamta and Technical Member P.V. Subba Rao allowed an appeal filed by FIIT JEE...

CESTAT Chennai Quashes ₹2.32 Crore Service Tax Demand On Non-AC Restaurant Sections In Same Establishment

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai, has set aside a service tax demand of ₹2.32 crore against a Coimbatore-based restaurant chain. It held that the chain was not liable to pay service tax on food and beverages served in the physically demarcated non-air-conditioned sections of its establishments. A tribunal comprising Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed the appeals filed by Sree Annapoorna Sree Gowrishankar Hotels Pvt....

Timing Difference In Availment Of CENVAT Credit Not A Ground To Deny Export Refund: CESTAT Chennai

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 1 July, held that refund of accumulated CENVAT credit on export of services cannot be denied merely on the ground that input service credit was availed after the date of the last export invoice of the relevant quarter, so long as the credit is otherwise admissible and remains unutilised. Technical Member Rajeev Tandon allowed all four appeals filed by Andritz Technologies Private Limited and set aside the...

Rent-a-Cab, Air Travel, Hotel Services Qualify As Input Services If Used For Business: CESTAT Chennai

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that services such as rent-a-cab, air travel, hotel accommodation, restaurant, telecommunication, insurance and business support services qualify as input services where they are used directly or indirectly for providing output services and are not meant for employees' personal consumption. The tribunal accordingly allowed a refund of unutilised CENVAT credit claimed by Olam Information Services Pvt....

CESTAT Delhi Sets Aside Service Tax Demand, Allows CENVAT Credit For Reverse Charge Payments Before July 2012

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service recipients could use CENVAT credit to discharge service tax under the reverse charge mechanism on imported services before 1 July 2012. It ruled that the restriction barring use of CENVAT credit for payment of service tax where the recipient was liable to pay tax came into force only from 1 July 2012 and could not be applied retrospectively. The tribunal also held that a show cause notice...