The Supreme Court of India dismissed Fox Mandal & Co’s plea against a CESTAT remand, with Justices PS Narasimha and Alok Aradhe ruling no grounds existed to expand or revisit the tribunal’s directions.
NEW DELHI: The Supreme Court rejected a petition by law firm Fox Mandal & Co challenging the scope of a remand directed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in a service tax dispute worth Rs 3.9 crore from the pre-GST era.
A bench comprising Justices PS Narasimha and Alok Aradhe refused to interfere with the tribunal’s order, holding that there was no basis to expand or revisit the remand while hearing a special leave petition.
The dispute arose from service tax proceedings against the firm for 2010–11 to 2014–15. The tax authorities accused the firm of improperly claiming CENVAT credit, failing to pay service tax on certain transactions, and showing inconsistencies between return filings and financial statements.
An adjudicating order confirmed service tax of Rs 2.99 crore and sought recovery of Rs 89.63 lakh in CENVAT credit, along with interest and penalties, bringing the total liability to about Rs 3.9 crore.
Fox Mandal appealed to the CESTAT, which partly allowed the appeal and sent key issues back to the adjudicating authority for fresh consideration.
The matters remanded included denial of CENVAT credit due to alleged non-production of original invoices during audit, and the firm’s contention that certain services provided to overseas clients qualified as “export of services” and were therefore exempt.
The tribunal noted that the credit claim could not be denied without examining documents produced later, and it raised concerns about procedural fairness where the department relied on undisclosed verification reports to reject the export claim.
However, the tribunal upheld a limited portion of the demand related to service tax on sponsorship expenditures, observing that the firm had recorded those payments as sponsorships in its books and had not proved they were donations.
Before the Supreme Court, the firm contended that while some issues were remanded, other aspects particularly portions of the service tax demand were not granted the benefit of reconsideration.
The Supreme Court observed that the remand on certain issues was “correct” and found no reason to intervene. The Court declined to widen the remand to include additional elements of the dispute.
The special leave petition was therefore dismissed.
Fox Mandal was represented by advocate Surjendu Sankar Das.
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