Renting Vacant Land Not Service Taxable Before July 1, 2010: CESTAT Delhi Denies Extended Limitation

The CESTAT Delhi has ruled that renting of vacant land was not taxable for service tax before July 1, 2010. It also held that one-time premium or salami received under a lease of immovable property was liable to service tax, but the extended limitation period could not be invoked against Madhya Pradesh Audyogik Kendra Vikas Nigam Limited without an intent to evade tax or positive evidence of suppression.The tribunal observed, “the immovable property including the vacant land is leviable to...

Bombay High Court Dismisses Revenue Appeal Against Millennium Beer Industries Over ₹21.92 Cr Service Tax

The Bombay High Court on 3 September dismissed the Revenue's appeal against the setting aside of a Rs. 21.92 crore demand against Millennium Beer Industries Ltd., holding that the extended period of limitation cannot be invoked to raise a service tax demand without establishing fraud, collusion or suppression of facts with an intent to evade tax, and A Division Bench of Justices Nitin B. Suryawanshi and Abasaheb D. Shinde also held that the Revenue cannot take different stands in substantially...

No Separate DCGI Approval Needed For Service Tax Exemption On Drug Testing: CESTAT Chennai

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently held that Service Tax exemption for clinical testing of newly developed drugs cannot be denied merely because a Clinical Research Organisation (CRO) does not have a separate approval from the Drugs Controller General of India (DCGI).The tribunal found that the drug Sponsors had obtained DCGI-approved permissions for the clinical trials. Consortium Clinical Research Pvt. Ltd. (CCRP), acting as the...

Airport Entry-Ticket Licensee Liable For Service Tax Only From June 1, 2007: Madras High Court

The Madras High Court has ruled that an airport entry-ticket licensee was liable to pay service tax only from June 1, 2007, and not for the earlier period.The court observed that the law was amended from that date to specifically bring the renting of immovable property within the service tax net. For the period before June 1, 2007, it noted that the Delhi High Court had ruled that service tax did not apply to the rental/licence fee in question.“...the appellant is liable to pay service tax as an...

Works Contracts Involving Material Supply Not Taxable As Maintenance Or Repair Service: CESTAT Bangalore

On 3 September, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore, held that composite works contracts involving both supply of materials and services cannot be subjected to service tax under the category of Management, Maintenance or Repair Service (MMRS). A Bench comprising Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi set aside service tax demands against Kerala Public Works Department contractor G. Janardhanan for repair, reconstruction and...

CESTAT Sets Aside ₹93.75 Lakh Demand Against HCL, Upholds BPO Works Contract Credit Denial

On 1 September, the Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that CENVAT credit cannot be denied merely because input services were received at premises not included in the taxpayer's centralised registration, while upholding denial of credit on works contract services used for construction or setting up of Business Process Outsourcing (BPO) branches. A Bench comprising Judicial Member P.A. Augustian and Technical Member Sanjiv Srivastava partly...

CESTAT New Delhi Bars Extended Limitation Where RCM Liability Is Revenue-Neutral

On 3 September, the Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that the extended period of limitation cannot be invoked where service tax payable under the Reverse Charge Mechanism (RCM) would have been available as CENVAT credit, as such a revenue-neutral situation does not establish an intention to evade tax. A Bench comprising Technical Member P.V. Subba Rao partly allowed an appeal filed by Kaps Advertising, restricting the service tax demand to...

Patna High Court Refuses To Interfere With ₹60.88 Lakh Service Tax Demand Against FCI Contractor

The Patna High Court on 28 August refused to interfere with a Service Tax demand of Rs. 60.88 lakh, along with interest and penalties, raised against a contractor engaged by the Food Corporation of India (FCI). A Division Bench of Justices Rajeev Ranjan Prasad and Ramesh Chand Malviya dismissed the writ petition filed by Anjani Kumar Singh, while granting him liberty to pursue the statutory remedy available under law. It observed: “We have noticed that neither before the competent...

Excess Service Tax Can Be Adjusted Against Liability Beyond Immediately Succeeding Period: CESTAT Chennai

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 31 August held that excess service tax paid by a taxpayer can be adjusted against tax liability arising in later months or quarters and is not restricted to the immediately succeeding month or quarter. A Bench of Judicial Member P. Dinesha and Technical Member M. Ajit Kumar allowed appeals filed by BASF Catalysts India Pvt. Ltd., relying on an earlier Division Bench decision in South India Aluminium Company...

CESTAT Mumbai Says Revenue Can't Take Contrary Stands On Same Services, Allows Flipkart CENVAT Refund

The Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 24 August allowed four appeals filed by Flipkart Internet Pvt. Ltd. against rejection of its refund claims under Rule 5 of the CENVAT Credit Rules, 2004. A Bench comprising Judicial Member S.K. Mohanty and Technical Member Sanjiv Srivastava held that the Revenue cannot deny refund of accumulated CENVAT credit by treating services as not export of services when it had not initiated proceedings to recover service tax on...

Mark-Up On Non-Taxable Ocean, Air Freight Can't Be Taxed As Business Support Service: CESTAT Chennai

On 28 August, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be imposed on the mark-up earned by a freight forwarder on ocean or air freight when the underlying freight was not taxable during the relevant period. Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao observed that where the principal activity itself was outside the service tax net, the profit earned from that activity could not be separated and...

STPI Charges For SOFTEX Certification And NOCs Liable To Service Tax: CESTAT Hyderabad

On 25 August, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad held that charges collected by Software Technology Parks of India (STPI) from software exporters for certifying SOFTEX forms, issuing No Objection Certificates (NOCs) and providing related assistance constitute consideration for taxable Business Support Services and are liable to Service Tax. Technical Member P. Anjani Kumar and Judicial Member Angad Prasad dismissed two appeals filed by STPI against...