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The tribunal quashed a Rs 89.13 lakh service tax demand, holding that royalty payable under a mining lease granted before 1 April 2016 falls outside the service tax net. It also ruled that the extended limitation period cannot be invoked, benefiting entities with pre-2016 mining assignments.
CESTAT Chennai rules that payments under voyage charter agreements for coastal cargo transport constitute taxable transportation services, not supply of vessels for use, thereby excluding them from reverse charge under service tax law. This clarifies the tax treatment for shipping intermediaries and manufacturers relying on third-party vessels, ending ambiguous classification of freight-based payments as goods rental.
CESTAT Ahmedabad rules that remuneration paid to whole-time directors as commission or perquisites qualifies as salary under the Income Tax Act, placing it within the employer-employee relationship exemption from service tax. This clarifies a critical boundary for corporate compensation structures and relieves companies from reverse charge obligations on director payments previously treated as taxable services.
CESTAT Hyderabad ruled that composite works contracts cannot be taxed under 'Construction of Complex Service' and barred demands where show cause notices were repeatedly issued, citing the precedent in L&T Ltd. v. CST. The decision reinforces that pre-2007 contracts lacking a specific taxable category cannot be retrospectively taxed, offering relief to developers engaged in integrated township projects.
CESTAT Chennai rules that businesses engaged solely in imports can avail CENVAT credit on input services like freight and network management charges, even without providing taxable output services. The Tribunal overturned the Revenue's denial, clarifying that the definition of 'input service' under Rule 2(l) of CENVAT Credit Rules, 2004 includes services used for business operations, regardless of output service provision.
CESTAT Ahmedabad holds that service tax on ocean freight under reverse charge is ultra vires Sections 64, 66B, 67 and 94 of Finance Act, 1994, following SAL Steel and Mohit Mineral precedents.