India's CESTAT Issues Service Tax Rulings on Securities Investment and Police Building Construction

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in New Delhi ruled on the IFCI Limited case, holding that CENVAT credit could not be retained for input services partially used for its own securities‑investment activities. The tribunal upheld the department’s demand for recovery of credit amounting to ₹89.84 million and associated penalties.

In a separate ruling in Chennai, CESTAT examined VRP Constructions’ challenge to service‑tax assessments on construction work for the Tamil Nadu Police Housing Corporation and related effluent‑treatment plants. The tribunal confirmed tax liability on commercial/industrial construction services while rejecting the demand for repair and maintenance of government roads. Both decisions clarify the application of service tax and CENVAT credit rules to non‑commercial and investment‑related activities in India.