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....

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...

SIPCOT Water Infrastructure Charges Exempt From Service Tax Under Section 104: CESTAT Chennai

On 10 June, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the one-time amount collected by the State Industries Promotion Corporation of Tamil Nadu Ltd. (SIPCOT) from industrial allottees towards water supply infrastructure is exempt from Service Tax under Section 104 of the Finance Act, 1994. Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed SIPCOT's appeal and set aside the Service Tax demand, interest, and penalty imposed...

CESTAT Allows SPI Technologies' ₹2.47 Crore Refund On Export Services Despite CENVAT Reversal

On 8 June, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that refund of service tax paid on input services used for export of services cannot be denied merely because CENVAT credit was initially availed and later reversed, or due to procedural lapses such as delayed filing of declarations. Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V. allowed the appeal filed by SPI Technologies India Pvt. Ltd., a Software Technology Park of India...

Construction of Educational Institutions Not Taxable Before 1 July 2012: CESTAT Chennai

On 8 June, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that works contract services used for construction of educational institutions were not liable to service tax during the relevant period prior to 1 July 2012, and dismissed the Revenue's appeal challenging the non-levy. Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V. decided the appeal filed by the Department against R.R. Thulasi Builders (India) Pvt. Ltd. The Bench held: ...

CESTAT New Delhi Holds Goods Transport by Road Without Consignment Note Not Taxable GTA Service

The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), on 5 June set aside a service tax demand against Best Road Carriers after holding that mere transportation of goods by road, without issuing a consignment note or providing ancillary services, does not amount to a taxable Goods Transport Agency (GTA) service. Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya held: “Since under GTA it is only such of these services which are in...

CESTAT Chennai Holds Remuneration Paid To Thriveni Earth Movers Directors Not Service Taxable

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently set aside service tax demands raised on remuneration paid by Thriveni Earth Movers Pvt. Ltd. to its whole-time directors. The tribunal held that such remuneration could not be subjected to service tax because the directors were working in an employer-employee relationship with the company. A coram of Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed the company's appeals...