Instakart Services Pvt. Ltd. Vs Commissioner of Central Tax (CESTAT Bangalore)
Summary: The Customs, Excise & Service Tax Appellate Tribunal, Bangalore Regional Bench, considered Service Tax Appeal No. 21017 of 2019 filed by M/s. Instakart Services Pvt. Ltd. against Order-in-Original No. 16/ST/COMMR/2018 dated 26.12.2018 passed by the Commissioner of Central Tax, Bangalore. Final Order No. 20415/2024 was pronounced on 13.03.2024.
The appellant was discharging Service Tax both as a service provider and recipient of services and was availing CENVAT credit on input services for payment of its Service Tax liability. During audit, the Department took the view that during July 2015 to September 2016 the appellant had traded in Mutual Funds but had failed to discharge 6%/7% of the value under Rule 6(3) of the CENVAT Credit Rules, 2004. The Department also alleged that Service Tax was payable on amounts received from employees towards waiver of the notice period on leaving employment.
A show-cause notice consequently demanded Rs.7,75,11,889/- towards 6%/7% of the value attributed to mutual fund trading and Rs.7,84,641/- as Service Tax on notice-period waiver charges recovered from employees during December 2015 to September 2016, along with interest and penalty. The demands were confirmed in adjudication.
On the mutual fund issue, the appellant contended that investment and redemption of mutual funds did not constitute rendering of a service or trading in goods and therefore could not constitute an exempted service for purposes of Rule 6 of the CENVAT Credit Rules, 2004. The appellant relied on several decisions, including Ruchi Infrastructure Ltd. vs. CCE & ST, Indore, Mormugao Port Trust vs. CCE & ST, Goa, Commissioner of CGST & CE vs. Edelweiss Financial Services Ltd., Space Matrix Designs Consultants (P.) Ltd. vs. Commissioner of Central Tax, Bangalore North, Ace Creative Learning (P.) Ltd. vs. Commissioner of Central Tax, [2021] 126 taxmann.com 215, United Racing and Blood Stock Breeders Ltd. vs. Commissioner of Central Tax, Bangalore, M/s Indiabulls Securities Ltd. vs. CCE and Ambuja Cements Ltd. v. Commissioner of Customs, Central Excise & GST Nagpur.
