2026-VIL-942-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax Liability on Sponsorship Services, Payment of tax by Service Provider - Whether the service receiver is liable to pay service tax on sponsorship services in respect of which the service tax has already been discharged by the service provider - HELD - The balance demand of service tax on sponsorship services cannot be sustained. The appellant has produced invoices with service tax amounts mentioned therein along with letters from service providers confirming tax deposits to the government. The authorities below have not indicated what further evidence or documents would be required to satisfy them. The principle that tax cannot be demanded twice on the same service transaction, regardless of whether paid by service provider or service receiver, is well-established. The appellant's readiness to discharge dues immediately upon being pointed out before the show cause notice, combined with the production of supporting documents including service provider confirmations with their service tax registration numbers, renders the averments credible - Double taxation cannot be permitted when tax has already reached the exchequer - The balance demand for service tax on sponsorship services is set asidernrnEligibility of Cenvat Credit on Input Services - Whether input services such as coffee machine charges, club fees, and employee insurance qualify for cenvat credit eligibility when the definition of input services includes "activities relating to business" and the services have nexus or integral connection with the appellant's business activity - HELD - The definition of input services prior to April 1, 2011, included "activities relating to business, such as," which was consistently interpreted in an expansive manner by various High Courts and Tribunals to encompass all services used in relation to the business of the assessee. The show cause notice is bereft of any details explaining how and why the input services were found ineligible. The High Court decision in CCE v Ultratech Cement and tribunal decisions in Tata Teleservices for employee insurance, Imagination Technologies for coffee machine charges, and Aban Offshore for club fees demonstrate that services with nexus or integral connection to the business activity qualify for credit. Following these precedents, the cenvat credit availed by the appellant to be tenable - The demand for denial of cenvat credit is set aside.
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