Confederation Indian Industry Not Liable to Service Tax on Convention Reimbursements and MES Income: CESTAT [Read Order]
On the Modular Employment Scheme, the Bench held that MES is a vocational training programme administered by the Ministry of Labour, and CII’s role as an assessing body formed an integral part of vocational training, which was exempt from service tax under applicable notifications.
![Confederation Indian Industry Not Liable to Service Tax on Convention Reimbursements and MES Income: CESTAT [Read Order]](https://images.taxscan.in/h-upload/2026/01/27/2122013-confederation-indian-industry-not-liable-service-tax-taxscan.jfif "Confederation Indian Industry Not Liable to Service Tax on Convention Reimbursements and MES Income: CESTAT [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Chandigarh held that the Confederation of Indian Industry (CII) is not liable to pay service tax on reimbursement of expenses under convention services and income earned from the Modular Employment Scheme (MES). Confederation of Indian Industry is an industry body registered with the Service TaxDepartment. The...
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Chandigarh held that the Confederation of Indian Industry (CII) is not liable to pay service tax on reimbursement of expenses under convention services and income earned from the Modular Employment Scheme (MES).
Confederation of Indian Industry is an industry body registered with the Service TaxDepartment. The department issued impugned demands from audit objections followed by a show cause notice.
While most of the demands raised in the notice were dropped by the Commissioner, the remaining two heads were confirmed. Therefore, CII approached the Tribunal through Adv. Rupali Singh.
The Bench, comprising Mr. S.S. Garg (Member, Judicial) and Mr. P. Anjani Kumar (Member, Technical) observed that the issues had already been examined and decided in favour of CII in its own earlier case.
Service tax cannot be levied on reimbursements, particularly in view of the Delhi High Court’s ruling in Intercontinental Consultants, which declared taxation of pure reimbursements to be ultra vires, said the appellate tribunal.
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On the Modular Employment Scheme, the Bench held that MES is a vocational training programme administered by the Ministry of Labour, and CII’s role as an assessing body formed an integral part of vocational training, which was exempt from service tax under applicable notifications.
The Tribunal further noted that the show cause notice was vague, as it failed to clearly specify the taxable category under which MES receipts were sought to be taxed.
Thus, the CESTAT set aside the service tax demand for the period 01.10.2010 to 31.03.2012, which included tax of ₹39,034 on convention expense reimbursements and ₹1,25,818 on MES income under the category of BusinessAuxiliary Service.
Mr. Varun Sharma, Authorized Representative appeared for the Respondent.
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