Service Tax Payment Can't Create Liability Where Tax Is Not Payable: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi has held that merely because a taxpayer wrongly collects or pays service tax, it does not make an otherwise non-taxable activity liable to tax.“However, the fact that some amount was collected and deposited does not create a charge of service tax and no service tax will become payable and no exemption which is otherwise available will become unavailable,” the tribunal observed.The bench comprising Judicial Member Binu Tamta...

Bills Issued By GTA Can Qualify As Consignment Notes If They Contain Essential Particulars: CESTAT Allahabad

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad has recently held that a document issued by a Goods Transport Agency (GTA) need not be titled a “consignment note” to qualify as one, as its substance and contents are material.A bench comprising Judicial Member P. K. Choudhary and Technical Member K. Anpazhakan relied on the words “by whatever name called” in Section 65(50b) of the Finance Act, 1994, which defines a GTA. The provision covers a person providing services...

Allahabad CESTAT Sets Aside ₹22.84 Crore HCL Infosystems Service Tax Demand As Time-Barred

On 10 August, the Allahabad Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the Rs. 22.84 crore service tax demand against HCL Infosystems Ltd., holding that the demand up to September 2014 was barred by limitation. A Bench comprising Judicial Member P.K. Choudhary and Technical Member K. Anpazhakan also clarified that the demand for the post-1 July 2012 period was unsustainable on the basis of the provisions invoked by the Department. It observed: ...

Penalties For Service Tax Default, Suppression Cannot Be Imposed Together: CESTAT Chandigarh

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has held that penalties for failure to pay service tax and for suppressing facts with an intent to evade tax cannot be imposed at the same time.The tribunal set aside the penalty for failure to pay service tax, holding that it could not be imposed alongside the penalty for suppression of facts with an intent to evade tax because the two were mutually exclusive.“As regards the penalty under Section 76, we hold that once...

Recovery Of LC Charges By Non-Banking Entity Not Taxable As Banking Services: CESTAT Delhi

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has held that the issuance of a Letter of Credit (LC) by a person or body corporate not engaged in banking, financial, or similar activities is not covered under the taxable category of "Banking and Other Financial Services." It ruled that the recovery of LC charges by the State Trading Corporation of India Ltd. (STC) from buyers in High Seas Sale (HSS) transactions is therefore not liable to service tax.A bench of...

CESTAT Hyderabad Holds School Examination Services Exempt From Service Tax, Sets Aside ₹1.94 Cr Demand

The Hyderabad Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 31 July held that services provided to schools for conducting examinations, including Olympiads and talent search examinations, are exempt from Service Tax as they relate to the conduct of examinations by educational institutions. A Bench comprising Judicial Member Justice Angad Prasad and Technical Member A.K. Jyotishi set aside the Service Tax demand of Rs. 1.94 crore, along with interest and penalties,...

CESTAT Kolkata Holds No Service Tax On Pre-2016 Mining Rights, Sets Aside ₹89.13 Lakh Demand

On 4 August, the Kolkata Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be levied on royalty paid for mining rights where the right to extract minerals was granted before 1 April 2016, even if the royalty was paid after that date. A Bench comprising Judicial Member Justice R. Muralidhar and Technical Member K. Anpazhakan set aside the service tax demand of Rs. 89.13 lakh, along with interest and penalties, raised against Roy Engineers, a Bihar-based...

Conversion Of Bare Structures Into Retail Showrooms Is Taxable As “Original Works”: CESTAT New Delhi

On 6 August, the New Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that converting bare commercial structures into fully functional retail showrooms constitutes “original works” under the service tax law and not merely completion and finishing services, while also ruling that service tax cannot be levied on forfeited customer advances or insurance compensation received for goods destroyed in a fire. A Bench of Judicial Member Ashok Jindal and Technical Member P.V....

CESTAT Mumbai Sets Aside Service Tax on Packaged Software Sale, Rules It Is Goods, Not Service

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that packaged (canned) software is "goods". It therefore ruled that its sale cannot be treated as a taxable service merely because the conditions for claiming the available service tax exemption were not met.A coram of Judicial Member Dr. Suvendu Kumar Pati observed that once packaged software is recognised as "goods" under Article 366(12) of the Constitution, its sale falls outside the definition of...

CESTAT Chandigarh Sets Aside ₹2.39 Crore Service Tax Demand Against SBI Card

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has set aside a ₹2.39 crore service tax demand against SBI Card and Payment Services Ltd., holding that a show cause notice (SCN) that fails to identify the taxable service, the service recipient or the consideration cannot sustain such a demand. The tribunal observed, "We find that the SCN does not specify as to what was the service rendered by the appellants and to whom and what was the consideration thereon."A bench...

COVID Limitation Extension Can't Revive Time-Barred Service Tax Demands: CESTAT Kolkata

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, has ruled that the COVID-19-related extension of limitation cannot revive tax demands that had already become time-barred under the statute. A coram of Judicial Member R. Muralidhar and Technical Member K. Anpazhakan observed, "The subsequent exclusion of limitation during the pandemic cannot revive a cause of action or breathe life into a demand which had already become time-barred under the statute. The law relating to...

Labour Contractor Liable For Service Tax Despite Production-Based Payments: CESTAT New Delhi

The New Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 31 July held that a labour contractor providing workers to a steel company was liable to pay service tax as the agreement was a manpower supply contract and not a job work arrangement for manufacturing. A Bench of Judicial Member Binu Tamta and Technical Member P.V. Subba Rao dismissed the appeal filed by Padam Charan Guman Singh and upheld the demand of service tax, interest and penalty under Section 78 of the Finance...