No Break-Up, No VAT Proof: CESTAT Allahabad Upholds ₹2.19 Crore Service Tax Demand Against Lakmé Franchise Beauty Salon

The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that in the absence of any documentary break-up between service receipts and retail sale of goods, the entire receipts of the Lakme Franchise beauty salon are liable to service tax. P. Dinesha (Judicial Member) and Sanjiv Srivastava (Technical Member) stated that no Notes on Accounts, which would have been part of the audited balance sheet/ profit and loss account, showing the proceeds from the...

Service Tax | Extended Limitation Cannot Be Invoked Without Mens Rea, Deliberate Intent To Evade Duty To Be Proven: CESTAT Chandigarh

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand of ₹18.95 crore raised against the assessee, KEC International, holding that the Department wrongly invoked the extended period of limitation without establishing any intent to evade tax . A Bench comprising Hon'ble Mr. S.S. Garg (Judicial Member) and Hon'ble Mr. P. Anjani Kumar (Technical Member) allowed the appeal filed by the assessee and quashed the...

Service Tax | Tax Paid Under Wrong Service Category Cannot Be Demanded Again: CESTAT Mumbai

The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand raised against the assesse, holding that once service tax has already been paid under the Reverse Charge Mechanism, merely under a wrong service category, the department cannot demand the same tax again.A Bench comprising Dr. Suvendu Kumar Pati (Judicial Member) allowed the assessee's appeal and quashed the order passed by the Commissioner (Appeals), granting...

Service Tax Cannot Be Levied On Membership & Participation Fees Paid To Foreign Associations Before 01.07.2012: CESTAT Chennai

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be levied on membership and participation fees paid to foreign associations such as International Packaging Group (IPG) or International Packaging Forum Network (IPFN) for the period prior to 01.07.2012. P. Dinesha (Judicial Member) and Vasa Seshagiri (Technical Member) stated that the demand for the period prior to 1.7.2012 on IPG/IFPN is unsustainable as there was no...

CENVAT Credit Rules | Storage Of Finished Goods Outside Factory Due To Space Constraints Covered Under Rule 2(l); Credit Cannot Be Denied: CESTAT

The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that storing finished goods outside the factory premises due to space constraints is connected with the assessee's business operation. Therefore, CENVAT (Central Value Added Tax) credit on 'warehousing services' is admissible as an 'input service' under Rule 2(l) of the CENVAT Credit Rules, 2004 and cannot be denied.P.K. Choudhary (Judicial Member) stated that how a business has to be run cannot be dictated...

Bottling Pepsi Doesn't Mean Promoting Pepsi's Goods; No Business Auxiliary Service: CESTAT Quashes Service Tax Demand

In a significant relief to SMV Beverages Pvt. Ltd., the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has held that incentives received from Pepsi Foods for advertising and promotional activities cannot be taxed under Business Auxiliary Service (BAS). The Tribunal followed a Larger Bench ruling which categorically held that section 65(19) of the Finance Act does not cover promotion of brand name or trademark of a client.A Bench comprising Mr. S.K. Mohanty (Judicial...

Service Tax | Commission Earned From Foreign Suppliers Is 'Export Of Service': CESTAT Mumbai Sets Aside Demand Against Paramount Dyes

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has held that commission received in India for facilitating sales of goods for foreign suppliers amounts to “export of service” and cannot be taxed under the category of Business Auxiliary Service (BAS).A Bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) allowed the appeal filed by the assessee, setting aside the Service Tax demand, interest, and penalties relating to the period...

Import Of Technical Designs Not 'Design Service'; No Extended Limitation Or Penalty: CESTAT Mumbai

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has delivered a significant ruling holding that import of technical know-how, engineering drawings and designs transferred permanently for manufacturing in India cannot be taxed as “Design Services” under the Finance Act, 1994.A Bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) set aside the entire Service Tax demand of ₹21.79 crore, along with interest and penalties, confirming that the...

Railway Receipts & STTG Certificates Are Valid Documents For Availing CENVAT Credit Before 27.08.2014: CESTAT Kolkata

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that railway receipts and STTG (Service Tax Certificate for Transportation of Goods) Certificates are valid documents for taking CENVAT (Central Value Added Tax) Credit even prior to 27.08.2014. R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) opined that the STTG Certificates issued by the Railways have been prescribed as a document for availing credit with effect from...

Pan Masala, Tobacco Profits Invested In Mutual Funds Not 'Trading In Securities', Service Tax Not Applicable: CESTAT Delhi

The Delhi Bench, Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside service tax demand on the activity of investing in Mutual Funds as such activities undertaken by Godfrey Phillips India Limited (Appellant) would be different from 'trading in securities' and cannot be considered as an exempted service in terms of section 66D(e) of the Finance Act. In an order dated December 05, 2025 the Bench comprising Justice Dilip Gupta (President) and Shri. P..V. Subba Rao...

Service Tax | No Reverse Charge Liability On Software Maintenance Consumed Abroad; Hotel Expenses Not 'Sponsorship Services': CESTAT Bangalore

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore has held that no Service Tax liability can be applied under the reverse charge mechanism on an Indian branch where the software maintenance services were contracted, received and consumed entirely outside India. The Tribunal further held that payments made towards hotel expenses of guests cannot be treated as taxable “Sponsorship Services”. A Division Bench comprising P.A. Augustian (Judicial Member) and R. ...

Staff Reimbursement, Training, And Hospital Management In Joint Venture Not Taxable Under Service Tax: CESTAT Chennai

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that staff reimbursement, training, and hospital management in a joint venture are not taxable under the service tax. P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) stated that the receipts characterised as “royalty”/“management fee” are integrally connected with the provision of healthcare services and do not constitute a separate taxable Management or Business...