Service Tax Demands of Rs.1.83 Crores Set Aside: CENVAT Credit Reversal and Classification Disputes Under Section 73(1)

CESTAT allowed appeal against multiple service tax demands totaling Rs.1.83 crores. Primary demands included non-reversal of CENVAT credit on exempted services (Rs.1.00 crores), business support services (Rs.42.94 lakhs), and healthcare services. Tribunal found appellant had reversed CENVAT credit with interest, services were incorrectly classified under business support/auxiliary categories, and healthcare services were exempt being inpatient treatments. Revenue failed to prove suppression or willful misstatement warranting extended period under Section 73(1). Demands were either legally unsustainable or time-barred. Tribunal noted appellant's bona fides in paying service tax with interest wherever applicable, attributing non-compliance to interpretational difficulties rather than deliberate evasion. .....

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