#Indirect Taxation

CESTAT Chennai ruled that processed milk is an intermediate product, not an exempted final product, so Rule 6 of the CENVAT Credit Rules does not trigger credit reversal. The decision sets aside the tax demand on Lotte India, clarifying that captive consumption of processed milk in confectionery manufacture does not attract CENVAT credit liability.

CESTAT Hyderabad rules remuneration paid to Managing Directors and Whole-time Directors as salary falls under Section 65B(44)(b) exclusion, dismissing a Rs. 9.98 crore Service Tax demand. The ruling clarifies employer-employee relationship for tax purposes, impacting corporate tax structuring and director compensation models.

CESTAT Chennai rules that the extended limitation period under Cenvat Credit Rules cannot be invoked when the department was already aware of the facts. The Rs. 39,99,079 demand was set aside as time-barred, reinforcing that suppression of facts is essential for invoking the extended period.

CESTAT Chennai rules that the extended period under Section 73(1) of the Finance Act 1994 for service tax demands cannot be invoked without concrete evidence of wilful suppression, fraud, or intent to evade tax. The ruling sets a precedent that mere non-filing or interpretational disputes do not justify extended limitation periods, impacting taxpayers facing retrospective demands.

CESTAT rules that insurance, professional fees for forex hedging, and HR training services qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004, entitling manufacturers to credit. The decision clarifies the scope of 'input service' for indirect tax credit eligibility, impacting manufacturers availing such services.

CESTAT Chennai holds that retrospective amendment to Notification No. 41/2012-ST expands 'specified services' to include head office services for exports. Refund claims cannot be rejected on quarter-wise restrictions or pre-amendment interpretations.