CESTAT Chennai Sets Aside Service Tax Demands Against Indian Bank On Limitation Ground

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, granted relief to Indian Bank and held that where transactions are duly recorded in statutory books, and there is no evidence of suppression or intent to evade tax, the larger period of limitation cannot be invoked.The ruling was delivered by a Bench comprising Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao while allowing appeals filed by Indian Bank against service tax demands raised on...

No Service Tax On Pal Promoters' Construction For Police Housing, Tsunami Rehab: CESTAT Chennai

The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 18 June held that construction services provided to the Tamil Nadu Police Housing Corporation (TNHPCL), Tsunami District Implementation Unit, Pudukkotai (TDIU), and Peoples Development Association (PDA) do not attract service tax, as the projects do not constitute commercial construction activity. Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V. allowed appeals filed by Pal Promoters Pvt....

CESTAT Kolkata Sets Aside ₹14.59 Crore Service Tax Demand Against Bihar State Sugar Corporation

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand of ₹14.59 crore against Bihar State Sugar Corporation Limited. It held that a show cause notice issued before the insertion of Section 73(2A) of the Finance Act, 1994 could not sustain a demand for the normal period after the extended limitation period was found inapplicable. “Accordingly, we hold that in the present case, the demand even for the normal period does not...

CESTAT Kolkata Quashes ₹2.10 Crore Service Tax Demand On Equipment Rentals After Finding Transfer Of Control

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, has held that an earthmoving equipment manufacturer and lessor was not liable to pay service tax on equipment rental transactions. The Tribunal held that possession and effective control of the equipment had been transferred to customers and that VAT had been paid on the transactions. The ruling was delivered by a Bench of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan while allowing the appeal filed...

Tour Operator Services Rendered Entirely In Jammu & Kashmir Not Taxable During 2005-10: CESTAT Mumbai

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that no service tax was payable on tour operator services rendered entirely in Jammu & Kashmir during the period from October 2005 to September 2010. It held that the service tax law in force at the time did not extend to the State. A bench of Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban allowed the appeal filed by Heena Tours & Travels. The Bench also dismissed the...

CESTAT Kolkata Quashes Service Tax Demand Based On 'Royalty on Mineral' Entries In Contractors' Records

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, has recently set aside service tax demands of about ₹19.26 lakh raised under the reverse charge mechanism against two road and bridge contractors. The tribunal found that the Revenue failed to establish that they had obtained any mining rights or paid royalty pursuant to a mining licence. The decision was delivered by Judicial Member R. Muralidhar, who allowed the appeals filed by J.K. Engicon Private Limited and J.K....

Gujarat High Court Revives YMCA's ₹9.39 Crore Service Tax Refund Claim Rejected As Time-Barred

The Gujarat High Court has recently set aside an order rejecting the Young Men's Christian Association's refund claim for financial years 2009-10 to 2012-13 as time-barred and directed the authorities to reconsider the claim on merits. A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati was hearing a petition challenging an order that denied refund of ₹9.39 crore claimed by the association for FYs 2009-10 to 2012-13 while allowing a refund claim of ₹26.66 lakh for FY...

CESTAT Bars Vivisection Of Turnkey Project, Allows CENVAT Credit To L&T

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 12 June held that authorities cannot artificially dissect an integrated turnkey project to deny CENVAT credit, and that the substance of the contractual arrangement must prevail over isolated treatment of individual components. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad allowed the appeal filed by Larsen & Toubro Ltd. (L&T) and set aside a demand of Rs. 2.22 crore along with...

CESTAT Chennai Quashes Rejection Of BPL Telecom's VCES Declaration As Notice Was Delayed

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside the rejection of a Voluntary Compliance Encouragement Scheme (VCES) declaration filed by BPL Telecom Pvt. Ltd. The tribunal found that the notice proposing rejection was issued beyond the prescribed time limit. It also found that the departmental correspondence relied upon by the Revenue was merely general in nature. A bench of Technical Member Vasa Seshagiri Rao and Judicial Member Ajayan T.V....

CESTAT Chennai Bars Extended Limitation In CERA Audit Case, Says Issue Interpretational, Not Suppression

On 9 June, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that authorities cannot invoke the extended period of limitation under service tax law when a dispute arises from a CERA audit objection and the Department itself contests the audit findings, as such circumstances indicate an interpretational issue rather than suppression of facts by Precision Equipments Chennai Pvt. Ltd. Judicial Member P. Dinesha and Technical Member M. Ajit Kumar allowed the...

CESTAT Chennai Quashes Service Tax Demand On Proprietorship, Rejects Liability For Erstwhile Firm

On 10 June, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the Department cannot fasten service tax liability on a proprietorship concern for dues arising from an erstwhile partnership firm without establishing any transfer, amalgamation, or successor liability. Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar reiterated that composite works contracts executed prior to 1 June 2007 cannot be subjected to service tax under the...

Mark-Up On Ocean Freight Cannot Be Taxed Merely Because It Exceeds Actual Freight Paid: CESTAT Chennai

On 10 June, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a freight forwarder's mark-up or profit on ocean freight charges cannot be subjected to service tax merely because the amount collected from customers exceeds the freight actually paid to shipping lines. Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed the appeal filed by GAC Shipping (India) Pvt. Ltd. and set aside the service tax demand, interest, and penalties...