CESTAT Chennai Sets Aside ₹37.74 Lakh Service Tax Demand Against Apeejay Surendra Park Hotels

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has set aside a service tax demand of ₹37.74 lakh raised against Apeejay Surendra Park Hotels Ltd. It held that the hotel chain was entitled to avail CENVAT credit on specified common input services while also claiming the benefit of abatement under the applicable service tax notification. A Division Bench of Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed an appeal filed by the company. The...

Tea Estate Lease For Plantation Activities Cannot Be Split Into Multiple Taxable Services: CESTAT Chennai

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has held that a tea estate lease arrangement undertaken for plantation activities could not be artificially split and taxed under different service categories. The tribunal found that the arrangement constituted a composite agricultural transaction. A Division Bench of Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao allowed two appeals filed by NEPC Agro Foods Limited. The Bench set aside...

No Service Tax Under RCM On Railway Space Licence Fees For Ads: CESTAT Hyderabad

On 3 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be demanded under the reverse charge mechanism (RCM) from Prakash Arts Pvt. Ltd. for licence fees paid to Railways for use of space to display advertisements, as the arrangement amounted to renting of immovable property and not “support service”. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad dismissed the Revenue's appeal and upheld the...

Demurrage Paid To Foreign Vessel Owners Not Taxable As Port Service: CESTAT Hyderabad

On 3 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that demurrage charges paid by Rashtriya Ispat Nigam Ltd. (RINL) to foreign vessel owners for delays in loading or unloading cargo cannot attract service tax because such charges are contractual payments connected with transportation of goods and not consideration for any taxable service. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad allowed RINL's appeals and set aside the...

Transfer Of Toll Collection Rights By NHAI Taxable As Service, Not Sovereign Function: CESTAT Hyderabad

On 2 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that consideration received by the National Highways Authority of India (NHAI) from contractors for transferring toll collection rights constitutes a taxable service and does not qualify as a sovereign function. Judicial Member Angad Prasad and Technical Member A.K. Jyotishi dismissed three appeals filed by NHAI challenging service tax demands, interest, and penalties arising from agreements...

CESTAT Chennai Holds Sub-Contractor Not An Independent GTA, Sets Aside ₹90 Lakh Service Tax Demand

On 2 June, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside a service tax demand of Rs.90.26 lakh against Vinoth Shipping Services, holding that a sub-contractor who only arranges transportation for a principal contractor cannot be treated as an independent Goods Transport Agency (GTA) liable to tax under the reverse charge mechanism. Technical Member Vasa Seshagiri Rao and Judicial Member Ajayan T.V. allowed the appeal and quashed the demand,...

Individual Villas In Gated Communities Not Residential Complexes For Service Tax: CESTAT Chennai

A gated community comprising individual villas on separate plots does not become a "residential complex" for service tax purposes merely because it has a common project identity and shared amenities, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held.A bench of Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar passed the ruling while allowing the appeal filed by Green Avenue Homes & Gardens and setting aside a service tax demand of...

CESTAT Chandigarh Holds Rent Paid For Advertising Walls Includible In Taxable Value Of Advertising Services

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has partly allowed a batch of appeals filed by Punjab Advertising Co. It held that rent paid for walls used to display advertisements formed part of the taxable value of the advertising services provided by it. At the same time, it held that the value of printed flex material supplied by Sonia Plastics could not be included in the value of the taxable service. The decision was delivered by a division bench...

Service Of Order On Representative Authorized To Appear Before Excise Department Is Valid: CESTAT Bengaluru

The Bangalore Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), by a majority ruling, has held that when an adjudication order is received by an authorized representative of an assessee, it amounts to valid service under Section 37C of the Central Excise Act, 1944. The Tribunal held that the limitation period for filing an appeal begins from the date the representative receives the order. The case arose from a refund claim filed by Simplilearn Solutions Pvt. Ltd. under...

CESTAT Chennai Quashes ₹1.59 Crore Service Tax Demand Against RRB Energy Over Foreign Technology Agreements

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) at Chennai has set aside a ₹1.59 crore service tax demand raised against RRB Energy Ltd on payments made to overseas entities for technology transfer and wind turbine development services.The tribunal held that the department failed to establish that the transactions were taxable as Intellectual Property Service or Consulting Engineering Services. A coram of Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar passed...

Statutory CAMPA Deposits Not Consideration For Taxable Service Under Finance Act: CESTAT New Delhi

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, on 25 May held that mandatory Net Present Value (NPV) deposits made into the Compensatory Afforestation Fund (CAMPA) for obtaining forest clearance cannot be treated as consideration for a taxable service under the Finance Act, 1994. Judicial Member Ajay Sharma and Technical Member P.V. Subba Rao allowed the appeal filed by Chhattisgarh State Power Transmission Company Ltd. and set aside a...

Service Tax Demand Based Solely On Third-Party TDS, ITR Data Unsustainable Without Inquiry: CESTAT Delhi

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) at New Delhi has recently held that the tax department cannot sustain a service tax demand by invoking the extended limitation period solely on the basis of discrepancies between service tax returns and third-party TDS/ITR data. The tribunal held the department must independently verify whether taxable services were actually rendered before raising such a demand. It accordingly set aside a ₹7.67 lakh demand against Vikash...