Airline Cancellation Charges Are Compensation For Breach Of Contract, Not Taxable Service: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has ruled that cancellation fees collected by Lufthansa German Airlines as compensation for passengers failing to honour their travel commitments are not taxable as consideration for a separate service under Section 66E(e) of the Finance Act, 1994.“In short, the cancellation charges are in the form of a compensation for failure of a contract entered into that the passenger would fly and the airlines would carry him to...

Service Tax On Construction Services Payable On Actual Receipts, Not Accruals: CESTAT Kolkata

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has remanded a ₹11,98,511 service tax demand against Britannia Engineering Ltd., holding that liability for the relevant period must be calculated on actual receipts rather than accruals. The dispute covers financial years 2006-07 to 2008-09, spanning the introduction of Works Contract Service as a separate taxable category from June 1, 2007. “Service tax is to be discharged on the receipt of the amount,” a bench of...

TDS Paid By Indian Company For Foreign Service Provider Not Taxable As Service Value: CESTAT Bangalore

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that TDS paid separately by an Indian company on behalf of a foreign service provider cannot be included in the taxable value for service tax purposes. This applies when the agreement requires the Indian company to bear the tax. A Bench of Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi set aside a service tax demand of ₹13.49 lakh against Promac Engineering Industries Limited....

Tax Refund Cannot Be Claimed Without Challenging Or Modifying Self-Assessment: CESTAT Mumbai

On 8 October, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a taxpayer cannot claim a service tax refund solely on the basis of a subsequent departmental clarification granting an exemption. The taxpayer must first challenge or modify the original self-assessment before seeking a refund of nearly Rs. 5.92 crore. A Bench comprising Judicial Member S.K. Mohanty and Technical Member Sanjiv Srivastava dismissed five appeals filed by Sodexo India and...

GTA Service Tax Cannot Be Demanded From Transporter If Recipient Paid Under RCM: CESTAT Kolkata

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal has held that service tax on Goods Transport Agency services was payable by recipient companies under the reverse charge mechanism where they paid the freight.The court held that demanding the same tax from the transporter again would amount to double taxation where the recipients had discharged the liability.“Thus, we find that as per notification No. 30/2012-ST, dated 20.06.2012, in respect of transportation of goods...

Contract Manufacture Of Alcoholic Liquor For Another Entity Attracts Service Tax: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal, New Delhi has held that manufacture of alcoholic liquor for human consumption undertaken by one entity on behalf of another is liable to service tax after alcoholic liquor was excluded from the negative-list entry with effect from June 1, 2015. Relying on the Delhi High Court's ruling in Carlsberg India Pvt. Ltd. v. Union of India, the tribunal held, "We find that section 66D of Finance Act, 1994 deals with the negative list of the...

Civil Work Contract Not Manpower Supply Service Merely Because Contractor Deploys Own Workers: CESTAT Kolkata

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata has held that civil work billed according to the work performed could not be treated as “Manpower Service” where the contractor's billing was not based on the number of workers or man-days deployed. The tribunal found that the consideration was linked to the civil work carried out at the railway siding, rather than the manpower deployed.“From the above Work Order, we find that the service provider is not charging any amount...

Providing Access To Government Data Through Its Portal Not OIDAR Service: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has set aside service tax demands against MP Online Ltd., holding that the company did not provide Online Information and Database Access or Retrieval (OIDAR) services merely by operating a portal through which Madhya Pradesh Government data could be accessed.The Bench of Officiating President Dr. Rachna Gupta and Technical Member P.V. Subba Rao held that MP Online only provided a network through which government data...

Appeal Can't Be Rejected For Want Of Pre-Deposit Proof When Order Itself Records Payment: CESTAT Mumbai

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 1 October held that an appeal cannot be rejected for non-production of proof of mandatory pre-deposit when the appellate authority itself has recorded that the required amount was deposited. A Bench of Judicial Member Ajay Sharma and Technical Member M.M. Parthiban set aside an order rejecting an appeal filed by Amsons Tours & Travels Pvt Ltd and remanded the matter to the Commissioner (Appeals) for fresh...

CENVAT Credit On Reverse Charge Service Tax To Be Refunded In Cash Under CGST Act: CESTAT Delhi

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi has held that any CENVAT credit accruing to Northern Coalfields Ltd. on payment of service tax under the reverse charge mechanism has to be refunded in cash under Section 142 of the CGST Act after the GST regime came into force.The ruling came in a batch of five appeals filed by Northern Coalfields against service tax demands on payments made to the Madhya Pradesh government towards Rural Infrastructure and Road...

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...