CESTAT Hyderabad Upholds ₹33.54 Lakh Service Tax Demand Against Lemon Tree Hotel Over CENVAT Credit Claim

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld a ₹33.54 lakh service tax demand and penalties against Lemon Tree Hotel. The Tribunal found that the hotel wrongly claimed abatement benefits while availing CENVAT credit on input services linked to its restaurant and accommodation services.“We have not found any evidence to suggest that the services like Maintenance and Repair services or Internet services or Courier services were not used for...

Mutual Fund Investments By Indiamart Not 'Trading', CESTAT Delhi Sets Aside ₹1.53 Crore CENVAT Demand

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) at New Delhi, has set aside a ₹1.53 crore service tax demand, along with interest and penalties, against Indiamart Intermesh Ltd. It held that the company's investment in and redemption of mutual fund units could not be treated as an exempt service for the purpose of denying CENVAT credit.“The mere investment in mutual fund units by the Appellant and the subsequent redemption of those units does not involve the rendering of any...

CESTAT Mumbai Quashes ₹2.73 Cr. Service Tax Demand Against Standard Chartered Finance Over Defective SCN

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 13 May set aside a Rs. 2.73 crore service tax demand raised against Standard Chartered Finance Pvt. Ltd., holding that the show cause notice was fundamentally defective because it did not specify the exact statutory provision under which the Department sought to tax the services. Judicial Member Ajay Sharma and Technical Member A.K. Jyotishi quashed the demand along with interest and penalties, holding that...

CESTAT Ahmedabad Says Payments Beyond Fixed Salary To Whole-Time Directors Not Automatically Taxable Service

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad has set aside a ₹11.12 lakh service tax demand against Champion Jointing Private Limited over performance commission and perquisites paid to its whole-time directors. Judicial Member S.S. Garg held: “The entire demand proceeds on a misconception of law, namely that any remuneration paid by a company to its directors beyond fixed monthly salary must be regarded as consideration for independent taxable service.” The...

CESTAT Mumbai Sets Aside ₹29.72 Lakh Demand Against Owens Corning, Bars SCN After Voluntary Payment

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 5 May set aside the order of the Commissioner (Appeals), Raigad, which had confirmed a service tax demand of Rs. 29.72 lakh along with interest and equal penalty against Owens Corning (India) Pvt. Ltd. in relation to rent-a-cab services received under the reverse charge mechanism. Judicial Member Dr. Suvendu Kumar Pati held that once the company paid the entire service tax liability along with applicable...

CESTAT Mumbai Quashes Service Tax Demand Against Jamnalal Bajaj Institute On Student Placement Fees

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 6 May held that educational institutions facilitating campus placements cannot attract service tax under “Manpower Recruitment or Supply Agency Service” where employers or recruiting entities pay no consideration and institutions collect placement-related fees only from students. Judicial Member Ajay Sharma and Technical Member A.K. Jyotishi allowed the appeal filed by Jamnalal Bajaj Institute of Management...

CESTAT Mumbai Rules Procedural Compliance In Filing Grounds Of Appeal Is Mandatory, Grants Remand

On 12 May, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that filing proper grounds of appeal along with Form ST-4 under the Finance Act, 1994 is not a mere procedural requirement but a mandatory condition for meaningful adjudication. A Bench comprising Judicial Member Ajay Sharma however also held that procedural lapses should not defeat substantive justice and remanded the matter to the Commissioner (Appeals) for fresh consideration on merits after...

CESTAT Kolkata Holds MLM Activities Not Taxable As Business Auxiliary Service, Quashes Service Tax Demand

In a ruling on the taxability of multi-level marketing (MLM) operations under the pre-GST regime, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that activities involving purchase and sale of goods under an MLM model cannot be classified as taxable “Business Auxiliary Service” under the Finance Act, 1994, where the core activity remains trading in products rather than rendering an independent service. On 11 May, a Bench comprising Judicial Member R....

CESTAT Bengaluru Exempts KILA Training Services From Service Tax Under Mega Exemption Notification

The Bengaluru Bench of the Customs, Excise & Service Tax Appellate Tribunal on 8 May 2026 held that training and capacity-building services in local governance provided by the Kerala Institute of Local Administration (KILA) are exempt from service tax. Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi held that the services fall under Serial No. 39 of Mega Exemption Notification No. 25/2012-ST as they relate to functions entrusted to municipalities under Article 243W of the...

CESTAT Bengaluru Quashes Service Tax Demand On Grants-In-Aid, Allows Earth Science Institute Appeal

On 8 May, the Bengaluru Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that grants-in-aid received from government departments do not constitute “consideration” and therefore cannot be subjected to service tax under Scientific or Technical Consultancy Services under the Finance Act, 1994. Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi allowed two tax appeals (21752 and 21754 of 2015) filed by the National Centre for Earth Science Studies. It...

CESTAT Hyderabad Says Pharma Job Work Was Not Renting Service Merely Due To Client's Production Control

The Hyderabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the job work arrangement between Teena Labs Ltd. and Aurobindo Pharma Ltd. could not be treated as “Renting of Immovable Property Service” merely because Aurobindo Pharma exercised production and quality control and reimbursed various expenses. The tribunal observed that, “Thus, what is apparent is that there is an effective control on production process, quality control, etc., however, it...

CESTAT Bengaluru Upholds Service Tax On Employee Secondment From Foreign Parent Company

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 24 April held that employees seconded by a UK-based parent company to its Indian subsidiary under a salary reimbursement arrangement would constitute “Manpower Recruitment or Supply Agency Service” and would attract service tax under the reverse charge mechanism. Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi partly allowed the appeal filed by ARM Embedded Technologies Pvt....