CESTAT Chennai Quashes ₹1.26 Lakh Demand Against Canbank Factors Over 'Bank Charges' Classification

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, on 23 September set aside the service tax demand of Rs. 1,26,841 against Canbank Factors Limited, holding that the Department had failed to establish the taxable character of the disputed receipts. A Bench comprising Technical Member Vasa Seshagiri Rao and Judicial Member Ajayan T.V. held that bank charges cannot be subjected to service tax merely because they are recorded under a ledger-head bearing that description,...

CESTAT Kolkata Sets Aside ₹42.78 Lakh Demand Against Belle Vue Clinic Over Expense Reimbursements

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 22 September set aside the Rs. 42.78 lakh service tax demand against Belle Vue Clinic for the period October 2010 to March 2015. A Bench comprising Judicial Member R. Muralidhar and Technical Member K. Anpazhakan held that reimbursements towards proportionate common expenses could not be included in the taxable value of services before 14 May 2015, when the law was amended to specifically cover reimbursable...

CESTAT Mumbai Quashes ₹17.39 Cr. Service Tax Demand Against Navnit Motors, Says Incentives Not Taxable

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 22 September set aside a Rs. 17.39 crore service tax demand against Navnit Motors, an authorised dealer of Maruti Suzuki, BMW and Jaguar Land Rover vehicles, on incentives, discounts and reimbursements received from vehicle manufacturers. A Bench comprising Judicial Member Ajay Sharma and Technical Member M.M. Parthiban held that the receipts could not be treated as consideration for a taxable service merely...

Tax On Services From Foreign Providers Based On Receipt Date, Not Payment Date: CESTAT Chennai

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, has held that the rate of service tax applicable to services received from foreign service providers is determined by the date of receipt, and not the subsequent date of paymentThe later date of payment to the foreign service provider does not determine the applicable rate under the reverse charge mechanism.The bench of Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao observed, “We accordingly do not...

Ocean Freight Service Tax Refund Claim Filed After One Year Is Time-Barred: CESTAT Delhi

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has held that a refund claim for service tax paid on ocean freight was subject to the one-year limitation under Section 11B of the Central Excise Act, as applicable to service tax.Technical Member Hemambika R. Priya ruled that the relevant date for calculating the limitation was the date on which the tax was paid. The subsequent finding by the Gujarat High court that the ocean-freight levy was unconstitutional did not...

CESTAT Mumbai Allows MIRC Electronics CENVAT Credit On Commission, Insurance, Detention Charges

The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed MIRC Electronics Ltd. (OnIda Electronics) to claim CENVAT credit on brokerage and commission, membership fees, detention charges, and insurance expenses.Judicial Member S.K. Mohanty held that these expenses qualified as “input services” under the CENVAT Credit Rules, 2004. The tribunal, however, upheld the denial of credit on staff welfare expenses relating to canteen and bus facilities.CENVAT credit...

Interest On EMI Loans Through Credit Cards Not Taxable As Credit Card Service: CESTAT Chennai

Holding so, the tribunal quashed the ₹249.35 crore service tax demand against Citibank

Meter Testing Naturally Bundled With Electricity Distribution, Not Taxable Separately: CESTAT Hyderabad

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has ruled that meter-testing charges collected by an electricity distribution utility are naturally bundled with distribution of electricity and cannot be taxed separately. “We accordingly hold that meter-testing is ancillary and naturally bundled element of distribution of electricity. The activity takes its tax character from the principal service falling within Section 66D(k) of the Finance Act, 1994,” Judicial Member...

2016 Amendment To CENVAT Credit Reversal Formula Clarificatory, Applies Retrospectively: CESTAT Allahabad

The Customs, Excise & Service Tax Appellate Tribunal, Allahabad on Thursday held that the 2016 amendment to the CENVAT credit reversal formula under Rule 6(3A) was clarificatory in nature. The amendment clarified that, for calculating the credit to be proportionately reversed, credit used exclusively for taxable services or dutiable goods is not to be included; only common CENVAT credit is relevant.The court observed that Notification No. 13/2016-CE (NT) dated March 1, 2016 substituted the...

Recovery Agent Services For Defaulted Loans Eligible For CENVAT Credit: CESTAT Chennai

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 8 September held that services of recovery or collection agents used by a Non-Banking Financial Company (NBFC) for recovering defaulted loans qualify as “input services” for claiming CENVAT credit. A Bench comprising Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao allowed four appeals filed by TVS Credit Services Ltd., which had availed CENVAT credit of service tax paid on services...

Renting Vacant Land Not Service Taxable Before July 1, 2010: CESTAT Delhi Denies Extended Limitation

The CESTAT Delhi has ruled that renting of vacant land was not taxable for service tax before July 1, 2010. It also held that one-time premium or salami received under a lease of immovable property was liable to service tax, but the extended limitation period could not be invoked against Madhya Pradesh Audyogik Kendra Vikas Nigam Limited without an intent to evade tax or positive evidence of suppression.The tribunal observed, “the immovable property including the vacant land is leviable to...

No Separate DCGI Approval Needed For Service Tax Exemption On Drug Testing: CESTAT Chennai

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently held that Service Tax exemption for clinical testing of newly developed drugs cannot be denied merely because a Clinical Research Organisation (CRO) does not have a separate approval from the Drugs Controller General of India (DCGI).The tribunal found that the drug Sponsors had obtained DCGI-approved permissions for the clinical trials. Consortium Clinical Research Pvt. Ltd. (CCRP), acting as the...