CESTAT Bangalore Upholds Service Tax On Emmvee Photovoltaics' Bonus Payments To Foreign Shareholders

On 21 April, the Bangalore Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the service tax on bonus payments made by Emmvee Photovoltaics Power Pvt. Ltd. to foreign shareholders and partly allowed the company's appeal, granting limited relief on penalties imposed under the Order-in-Original. A Bench comprising Judicial Member Dr. D.M. Misra and Technical Member R. Bhagya Devi held that bonus payments linked to performance conditions constitute consideration for...

CESTAT Allows CENVAT Credit On Insurance, Forex Hedging, Employee Training For National Engineering Industries

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has allowed the appeal filed by National Engineering Industries Ltd., setting aside the denial of CENVAT credit on insurance services, forex hedging consultancy, and employee training and travel-related services, holding that these were used in relation to its manufacturing business.The case was decided by Judicial Member Dr. Rachna Gupta, who found that the services in question were connected, directly or indirectly,...

CESTAT Delhi Rejects AAI's ₹30.31 Lakh Excess Service Tax Refund Claim Over Delay

The Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) at New Delhi has dismissed an appeal filed by Airports Authority of India (AAI). The challenge was to an order that had upheld rejection of its refund claim of ₹30.31 lakh, which AAI said was excess service tax paid on lease rent charged to Bharat Petroleum Corporation Limited (BPCL). A coram of Judical Member Dr. Rachna Gupta, who heard the matter, held that merely claiming payment under mistake does not by...

CESTAT Grants Relief To Bharat Hotels, Sets Aside Service Tax On Forfeited Booking Advances

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has recently set aside a service tax demand against Bharat Hotels Limited on amounts retained upon cancellation of hotel room bookings.A coram of Judicial Member Binu Tamta and Technical Member P.V. Subba Rao allowed the appeal and held that advance amounts forfeited as “room retention charges” cannot be taxed under Section 66E(e) of the Finance Act, 1994. The tribunal recorded that Bharat Hotels had discharged service...

Works Contract Road Construction Taxable, Refund Barred Under Unjust Enrichment: CESTAT New Delhi

The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 16 April held that a service tax refund cannot be granted where the taxpayer has passed on the tax burden to the recipient, as such claims are barred by the doctrine of unjust enrichment. The Bench comprising Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya upheld the denial of refund to Sandeep Builders, noting that the activities undertaken by the company were correctly taxed as...

CESTAT Chennai Upholds Tax On 0.5% Deductions From Sub-Contractors' Bills By CCCL As Business Support Services

The Customs, Excise & Service Tax Appellate Tribunal, Chennai Bench, has upheld the service tax demand against Consolidated Construction Consortium Ltd. (appellant), holding that the deduction of 0.5% from sub-contractors' bills constitutes taxable consideration for “Business Support Service” and not a mere reimbursement or CSR-related recovery.The matter came up before the bench consisting of Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V., which proceeded to...

CESTAT Allahabad Sets Aside Service Tax Demand Based Solely On ITR Data In Ganpati Transport Case

The Allahabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that a service tax demand raised solely on the basis of Income Tax return data, without independent verification of the taxpayer's books of accounts, was unsustainable in the facts of the case. It further ruled that transportation of goods by road through own trucks without issuance of consignment notes does not qualify as a taxable Goods Transport Agency (GTA) service. The bench comprising...

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...