CESTAT Dismisses Jal Mahal Resorts' Appeal; Service Tax Refund Rejected as Total Turnover Exceeds ₹10 Lakh Limit [Read Order]
The Tribunal held that the appellant was not an 'undersized business entity' eligible for the exemption.
![CESTAT Dismisses Jal Mahal Resorts Appeal; Service Tax Refund Rejected as Total Turnover Exceeds ₹10 Lakh Limit [Read Order]](https://images.taxscan.in/h-upload/2026/04/10/2132660-cestat-new-delhi-service-tax-refund-jal-mahal-resort-cestat-service-tax-case-taxscan.webp "CESTAT Dismisses Jal Mahal Resorts Appeal; Service Tax Refund Rejected as Total Turnover Exceeds ₹10 Lakh Limit [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, while dismissing the appeal of Jal Mhal Resort, held that for the purpose of availing exemption under Notification No. 25/2012-ST, the term 'turnover' must be interpreted in its common parlance meaning, i.e., the total aggregate turnover of the business entity and not just the turnover from...
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, while dismissing the appeal of Jal Mhal Resort, held that for the purpose of availing exemption under Notification No. 25/2012-ST, the term 'turnover' must be interpreted in its common parlance meaning, i.e., the total aggregate turnover of the business entity and not just the turnover from taxable services.
The appellant resort company had filed a refund claim for service tax amounting to Rs. 95,01,092/- paid on legal consultancy services under the Reverse Charge Mechanism (RCM). The appellant contended that they were eligible for the exemption, as their turnover from taxable services was below the ₹10 lakh threshold prescribed in the notification. They argued that the Department had erred by considering their total business turnover, which included income from nursery plant sales and bank interest.
The Revenue, supported by the Tribunal's earlier decision in the same appellant's case, countered this. The Tribunal observed that the term 'turnover' is not defined in the Finance Act and must be given its general meaning, which refers to the total amount of business done by a company. It noted that the appellant's total turnover for the preceding financial years was ₹11,51,478/- and ₹10,45,004/-, respectively, thus exceeding the ₹10 lakh limit.
It is settled that the term turnover is not restricted to mean turnover of only taxable services. From the facts available, it is noted that during the preceding financial years, the turnover, inclusive of nursery sales, was Rs.11,51,478/- for 2012-13 and Rs.10,45,004/- for 2013-14. Thus, having crossed the threshold of Rs.10 lakhs, the appellant is not eligible for the threshold exemption as per Notification No.33/2022 dated 20.06.2012.
Consequently, the appellant does not qualify for the benefit of exemption provided under Notification No.25/2012 dated 26.06.2012. Therefore, the refund has been rightly rejected vide the impugned order.
The Tribunal held that the appellant was not an 'undersized business entity' eligible for the exemption. Since the claim failed on merits, the Tribunal upheld the rejection of the refund and dismissed the appeal.Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
