Case Details: Instakart Services Pvt. Ltd. Versus Commissioner of Central Tax, Bengaluru (2025) 32 Centax 185 (Tri.-Bang)
Judiciary and Counsel Details
- Dr. D.M. Misra, Member (J) & Mrs R. Bhagya Devi, Member (T)
- S/Shri Tarun Gulati, Sr. Adv. with Kishore Kunal K.K., Adv., for the Appellant.
- Shri K. Vishwanatha, Superintendent, Authorised Representative, for the Respondent.
Facts of the Case
The assessee was engaged in providing taxable services and invested in mutual funds. During the audit, the department observed that the assessee had not discharged service tax liability on the amount received from the employees for the waiver of the notice period on leaving the employment. The department issued a show cause notice demanding service tax on such amount. On adjudication, the demand was confirmed with interest and penalty. Aggrieved by the order, the assessee preferred an appeal to the South Zonal Bench of the CESTAT.
CESTAT Held
The Tribunal held that the assessee was only rendering taxable services; therefore, the Rule 6(1) of the CENVAT Credit Rules, 2004 will not apply. The assessee was investing its surplus in mutual funds and not trading the same as securities. The investment in mutual funds by the assessee cannot be considered as an activity involving exempted services nor sale/trading of exempted goods. Thus, demand for service tax on the amount of charges recovered by the assessee from its employees who had not served the notice period in terms of the employment contract was not sustainable.
List of Cases Cited
- Ace Creative Learning (P.) Ltd. v. Commissioner of Central Tax — [2021] 126 taxmann.com 215 (Bangalore – CESTAT) — Referred [Para 3.1]
- Amit Metaliks Ltd. v. Commissioner of Central GST — [2021] 127 taxmann.com 248 (Kolkata – CESTAT) — Referred [Para 3.2]
- Balaji Medical and Diagnostic Research Centre v. Principal Commissioner, Central GST (East Delhi) — 2023 (12) TMI 748 — Referred [Para 3.2]
- Commissioner of CGST and Central Excise v. Edelweiss Financial Services Ltd. — [2023] 149 taxmann.com 76 (SC) — Referred [Para 3.1]
- GE T & D India Ltd. v. Deputy CCE — [2020] 119 taxmann.com 55 (Madras) — Referred [Para 3.2]
- Indiabulls Securities Ltd. v. CCE — 2018 (1) TMI 1087 — Referred [Para 3.1]
- Madhya Pradesh Poorva Kshetra Vidyut Vitran Co. Ltd. v. Principal Commissioner CGST and Central Excise, Bhopal — [2021] 126 taxmann.com 181 (New Delhi – CESTAT) — Referred [Para 3.2]
- Mormugao Port Trust v. CCE & ST, Goa — 2017 (48) S.T.R. 69 (Tri.-Bom) — Referred [Para 3.1]
- Rajasthan Rajya Vidhyut Prasaran Nigam Ltd. v. Commissioner of Central GST — [2022] 135 taxmann.com 6 (New Delhi – CESTAT) — Referred [Para 3.2]
- Ruchi Infrastructure Ltd. v. CCE & ST, Indore — 2020 (37) G.S.T.L. 236 (Tri.-Del) — Referred [Para 3.1]
- South Eastern Coalfields Ltd. v. CCE and Service tax — 2021 (55) G.S.T.L. 549 (Tri.-Del) — Referred [Para 3.2]
- Space Matrix Design Consultants (P.) Ltd. v. Commissioner of Central Tax, Bangalore North — [2021] 127 taxmann.com 51 (Bangalore – CESTAT) — Referred [Para 3.1]
- United Racing and Blood Stock Breeders Ltd. v. Commissioner of Central Tax, Bangalore — 2023 (5) TMI 84 — Referred [Para 3.1]
- XL Health Corporation India (P.) Ltd. v. Commissioner of Central Tax — [2022] 138 taxmann.com 437 (Bangalore – CESTAT) — Referred [Para 3.2]
