Tax
Customs Act | CESTAT Chennai Holds S.117 Penalty Cannot Be Imposed Without Finding Of Contravention
The CESTAT, Chennai has set aside the ₹4 lakh penalty imposed on Dahnay Logistics Pvt. Ltd. under Section 117 of the Customs Act, finding that there was no established contravention warranting penalty.A Bench comprising Ajayan T.V., Member (Judicial) found that 100% examination of the cargo had revealed nothing objectionable and that the documents furnished by Dahnay Logistics were not found wanting.The Tribunal held that Section 117 could not be invoked mechanically and that a penalty required...
Earth Excavation For Govt Dam Project Is Works Contract, Eligible For Service Tax Exemption: CESTAT Hyderabad
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad has held that earth excavation and site formation work carried out by a sub-contractor for a government dam project qualified as a works contract service, even though the sub-contractor had not actually paid VAT.The Division Bench of Judicial Member Angad Prasad and Technical Member A.K. Jyotishi held that Capital Housing Projects Pvt. Ltd. was entitled to exemption from service tax under Serial No. 29(h) of Notification...
Delhi ITAT Allows Foreign AE As Tested Party Under RPM In ₹13.42 Crore Transfer Pricing Case
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 19 August held that a foreign Associated Enterprise (AE) can be selected as the tested party under the Resale Price Method (RPM) for back-to-back merchant trading transactions where it is the least complex entity and reliable comparable data is available. A Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal dismissed the Revenue's appeal against the deletion of a Rs. 13.42 crore transfer...
Deletion Of 'Setting Up' Does Not Bar CENVAT Credit On Plant-Setting Services: CESTAT Ahmedabad
On 19 August, the Ahmedabad Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that CENVAT credit cannot be denied merely because the expression “setting up” was omitted from the definition of “input service” under Rule 2(l) of the CENVAT Credit Rules, 2004, with effect from 1 April 2011. A Bench comprising Judicial Member Dr. Ajaya Krishna Vishvesha and Technical Member Satendra Vikram Singh partially allowed appeals filed by ATC Tires Pvt. Ltd. against denial of CENVAT...
Foreign University Agent Not 'Intermediary' Without Tripartite Arrangement: CESTAT Chandigarh
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 18 August held that an overseas education consultant cannot be treated as an “intermediary” merely because it acts as an agent of foreign universities and receives commission from them. A Bench comprising Judicial Member S.S. Garg and Technical Member P. Anjani Kumar, dismissed the Revenue's appeal against Trivedi Overseas Education Services, holding that where there is no tripartite arrangement and only...
Criminal Court Cannot Order Release Of Seized Goods Without Customs Cognizance: Gauhati High Court
The Gauhati High Court on 13 August held that a regular criminal court cannot exercise powers under the general criminal law to release goods seized under the Customs Act when no cognizance of a Customs offence has been taken. Justice Mridul Kumar Kalita allowed a criminal petition filed by the Deputy Director, Directorate of Revenue Intelligence (DRI), Dimapur Regional Unit, challenging the 12 March 2026 order of the Principal District and Sessions Judge/Special Judge, Dimapur. The order had...
Reassessment Objections Must Be Raised Before Assessing Officer First: Telangana High Court
The Telangana High Court on 11 August declined to interfere with reassessment proceedings against Nitin Enterprises at the preliminary stage, holding that objections concerning the jurisdiction and validity of the reassessment must first be raised before the Assessing Officer and, if necessary, pursued through the statutory appellate remedies. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda held that proceedings initiated through a notice under Section 148A and the...
Telangana High Court Holds Share Premium From Non-Resident Is Capital Receipt, Quashes ₹44.07 Cr Demand
The Telangana High Court on 11 August held that the share premium received by Escientia Advanced Sciences Pvt. Ltd. from a non-resident shareholder on a fresh issue of equity shares is a capital receipt and cannot be treated as taxable income. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda allowed the company's writ petition and quashed a Rs. 44.07 crore tax demand raised for assessment year 2019-20. The judges held: "..the premium received by the petitioner on...
DBS Bank Indian Branch's ECB Services To Singapore Office Not 'Intermediary Services': CESTAT Mumbai
On 17 August, the Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that services provided by DBS Bank's Indian branch to its Singapore head office in connection with External Commercial Borrowings (ECB) cannot be treated as “intermediary services” for levy of service tax. A Bench comprising Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban held that the Indian branch and DBS Bank Singapore were not two different persons but formed part of the same legal...
Mumbai CESTAT Holds Tata Communications' Transponder Bandwidth Services Are Telecommunication Services
The Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 17 August held that transponder bandwidth services received by Tata Communications Limited from foreign satellite service providers constitute telecommunication services and cannot be classified as Business Support Services (BSS). A Bench comprising Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban dismissed the Revenue's appeal and upheld the Commissioner's order dropping service tax demands against the...
Karnataka High Court Sets Aside Advance Ruling On Kitchen Exhaust Hoods In Halton India's Case
The Karnataka High Court on 6 August held that the Customs Authority for Advance Rulings must examine material produced by an importer to determine whether kitchen exhaust hoods contain fans before deciding their tariff classification. A Division Bench comprising Justices S.G. Pandit and K. Manmadha Rao set aside the Authority's order dated 25 March 2026 after finding that material submitted by Halton India Pvt. Ltd. to establish that its imported exhaust hoods contain fans had not been...
CESTAT Mumbai Says No Separate Tax On Interchange Fee If Tax Paid On Entire MDR, Grants HDFC Bank Relief
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held on 17 August that service tax cannot be separately demanded on the interchange fee earned by a credit card issuing bank when the bank has already paid service tax on the entire Merchant Discount Rate (MDR). A Bench comprising Judicial Member S.K. Mohanty and Technical Member M.M. Parthiban set aside the service tax demands raised against HDFC Bank Ltd., along with interest and penalties, relying on the...