No Service Tax Payable On Laying Of Cables Under Or Alongside Roads: CESTAT Kolkata

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that consideration received for laying of underground telecom/optical fibre cables under or alongside roads is not liable to service tax. Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) opined that the entire demand confirmed in the impugned order under these specific categories is not liable to Service Tax, as all the amounts received by the assessee pertain to laying of cables...

Remuneration Paid To Whole-Time Directors Treated As 'Salary'; Service Tax Not Leviable: CESTAT Chennai

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that remuneration paid to whole-time directors does not constitute a taxable service. Consequently, service tax under the reverse charge mechanism (RCM) is not leviable. P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) opined that the remuneration paid to the Directors constitutes “salary” under an employer–employee relationship and is therefore not exigible to service tax. ...

Works Contract Service Provided To CESC For Transmission Or Distribution Of Electricity Not Liable To Service Tax: CESTAT Kolkata

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that works contract service provided to Calcutta Electricity Supply Corporation (CESC) for transmission or distribution of electricity is not liable to service tax. Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) examined whether the works contract service provided by the assessee to Calcutta Electricity Supply Corporation (CESC) for transmission or distribution of electricity is...

Service Tax | Sale Of Popcorn & Beverages At Cinema Counters Is Not Service, No Service Tax Payable: CESTAT Delhi

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal has set aside a service tax demand of over ₹18.84 crore against assessee, holding that the sale of food and beverages such as popcorn, snacks and soft drinks at cinema counters amounts to sale of goods and does not involve any element of “service” under the Finance Act, 1994. A Bench comprising Judicial Member Binu Tamta and Technical Member P.V. Subba Rao was hearing an appeal filed by M/s Cinepolis India...

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...