CESTAT Kolkata Sets Aside ₹70.45 Lakh Service Tax Demand On Government Grants To Indian Chamber Of Commerce

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata has set aside a ₹70.45 lakh Service Tax demand on grants received by the Indian Chamber of Commerce (ICC) from Central and State Governments. The tribunal held that the grants were not consideration for providing a taxable service and were more in the nature of reimbursement. The bench comprising Judicial Member R. Muralidhar and Technical Member K. Anpazhakan found no evidence that ICC provided “Business Exhibition...

CESTAT Allahabad Says Revenue Can't Retain Tax Paid By Mistake, Orders ₹36.92 Lakh Refund To SAF Yeast

On 1 October, the Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that tax paid by mistake on an exempt service cannot be retained by the Revenue. Judicial Member P.K. Choudhary directed the Revenue to refund Rs. 36,92,166 to SAF Yeast Company Pvt. Ltd. with 12% annual interest from the respective dates of deposit until payment. It also directed that the refund be made within three months. The Tribunal observed: “The Revenue has no authority to retain...

Micromax's ₹154 Crore Deposit In Ericsson Patent Case Was Not Royalty For Service Tax: Delhi High Court

The Delhi High Court has held that ₹154.79 crore deposited by Micromax Informatics Ltd. pursuant to interim orders passed in a patent dispute with Ericsson could not be treated as a payment towards royalty for the purpose of service tax.The Division Bench of Justices Avneesh Jhingan and Shail Jain was hearing an appeal filed by the CGST Department against a CESTAT order upholding the dropping of a service tax demand against Micromax.The dispute arose from litigation between Micromax and...

Patna High Court Orders ₹1.24 Lakh Refund After Service Tax Appeal Pre-Deposit Paid Twice, Grants 12% Interest

The Patna High Court has directed the Central GST and Central Excise Department to refund ₹1,24,175 to a petitioner after finding that the amount paid towards the mandatory pre-deposit for a service tax appeal was deposited twiceThe Division Bench of Justice Rajeev Ranjan Prasad and Justice Sunil Dutta Mishra also directed the Department to pay interest at 12% per annum from the date of the second receipt until payment, along with ₹25,000 towards litigation costs.The Court further permitted the...

Madras High Court Upholds Setting Aside Of ₹2.63 Crore Service Tax Demand On TNCSC Over Storage Godowns

The Madurai Bench of the Madras High Court has upheld an order setting aside a ₹2.63 crore service tax demand against the Tamil Nadu Civil Supplies Corporation (TNCSC). The demand was raised for the construction of scientific storage godowns used primarily to store paddy procured from farmers for distribution through the Public Distribution SystemA Division Bench of Justice M. Dhandapani and Justice N. Dileep Kumar held that TNCSC qualifies as a “governmental authority” under the Mega Exemption...

Charitable Donations Not Taxable As 'Sponsorship' Without Reciprocal Obligation: Madras High Court

The Madurai Bench of the Madras High Court on 16 September held that charitable contributions cannot be treated as taxable sponsorship services where the recipient is not under an obligation to provide anything in return. A Division Bench of Justices G.R. Swaminathan and M.D. Sumathi set aside the entire service tax demand raised against Karur Vysya Bank Ltd. They held that the Revenue failed to prove most contributions were sponsorship services, while noting that even the two qualifying...

DIN On Tax Appellate Order Does Not Prove It Was Delivered To Taxpayer: Madras High Court

The Madras High Court has held that the presence of a Document Identification Number (DIN) on an appellate order does not, by itself, establish that the order was served on the assessee. The court ruled that the DIN cannot be used to establish the date of service for calculating the limitation period for an appeal.A Division Bench of Justice Anita Sumanth and Justice S. Raveekumar was dealing with a batch of nine appeals filed by Greaves Cotton Ltd. challenging CESTAT orders dismissing its...

Inadmissible Electronic Data, Computer Printouts Cannot Determine Excise Duty Liability: CESTAT Chennai

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has held that electronic data and computer printouts cannot form the basis for determining Central Excise duty liability unless the statutory requirements for their admissibility are met.The tribunal discarded electronic records relied upon to quantify alleged clandestine manufacture and removal of TMT bars by Sri Kamalaganapathy Steel Rolling Mills Ltd. It set aside the order to the extent that the demand was quantified...

CESTAT Upholds Service Tax On ₹12.66 Lakh JMRC Payment To Chandpole Bazaar Association

On 28 September, the Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the service tax liability on Rs. 12.66 lakh received by Chandpole Bazaar Vyapaar Mandal Samiti from Jaipur Metro Rail Corporation (JMRC) towards publicity and advertisement activities during Diwali celebrations. A Bench comprising Officiating President Rachna Gupta and Technical Member P.V. Subba Rao upheld the taxability of the amount while setting aside the Commissioner (Appeals),...

Indian Exporter Not Liable To Pay Service Tax Under Reverse Charge On Foreign Bank Charges: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has held that an Indian exporter is not liable to pay service tax under the reverse charge mechanism on charges deducted by foreign banks from export proceeds. The tribunal held that the services were received by the Indian bank, not the exporter, which had no contractual relationship with the foreign bank. A coram comprising Judicial Member Somesh Arora and Technical Member Sanjiv Srivastava allowed Sarda Energy and...

CESTAT Kolkata Sets Aside ₹13.20 Lakh Service Tax Demand On Restaurant Over Revenue-Sharing Arrangement

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a ₹13.20 lakh service tax demand on a Kolkata-based restaurant.It held that the amounts received under a revenue-sharing arrangement with a caterer were not consideration for providing Business Support Services.The bench comprising Justice Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) held that sales incentives received from distributors of alcoholic beverages, linked to the...

CESTAT Kolkata Holds Road Construction Services Provided To West Bengal Govt Exempt From Service Tax

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a ₹54.91 lakh service tax demand against a road construction contractor, holding that the services provided to the West Bengal Government were exempt from service tax.The Division Bench comprising Judicial Member Justice R. Muralidhar and Technical Member K. Anpazhakan was hearing an appeal filed by M/s Gouri Construction, a proprietorship concern engaged in construction of roads.The...