2026-VIL-110-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Section 77(1)(a) of Finance Act, 1994 – Textile processing – Entitlement of exemption – Appellant is engaged in providing various taxable services – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Principal Commissioner confirmed demands proposed in show cause notice – Whether demand confirmed under category of Business Support Service is sustainable – HELD – The activity of processing of textiles undertaken by Appellant had been categorized as an activity liable to Service Tax under category of Business Support Service. Notification No.14/2004-ST specifically exempts activity of textile processing from levy of Service Tax. Activity of textile processing undertaken by Appellant is not liable to Service Tax. Demand confirmed under category of Business Support Service is legally not sustainable and hence, it is set aside – The appeal is disposed ofrnrnIssue 2: Service Tax – Renting of immovable property – Tax liability – Whether Appellant is liable to pay Service Tax in respect of renting of immovable property and renting of machinery services – HELD – Appellant had not declared these services rendered by them specifically either in balance sheet or in Income Tax Returns filed by them. Appellant is liable to pay Service Tax in respect of rendering of these services. Appellant had questioned computation of their Service Tax liability in respect of renting of immovable property and renting of machinery services and have made various submissions to this extent. Considering these submissions, for purpose of re-quantification of Service Tax demand in respect of these services, matter is remanded to Adjudicating authority. rnrnIssue 3: Service Tax – Goods transport agency service – Demand of tax – Whether demand confirmed against Appellant in impugned order under category of ‘goods transport agency service’ is sustainable – HELD – Appellant had actually received CHA services from their service providers. Documentary evidence submitted by Appellant clearly indicates that services received by Appellant are from CHA and there is no evidence of receipt of goods transport agency services. Demand confirmed against Appellant in impugned order under category of ‘goods transport agency service’ is set aside.rnrnIssue 4: Service Tax – Imposition of penalty – Whether penalty imposed on Appellant under Section 77(1)(a) of the Act is sustainable – HELD – Section 77(1)(a) of the Act imposes a penalty on any person liable to pay service tax who fails to take required registration. As Appellant is liable to pay Service Tax on renting of immovable property and renting of machinery services and had not taken registration for said services, penalty imposed on Appellant under Section 77(1)(a) of the Act is uphold.
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