Fox Mandal Moves Supreme Court Against CESTAT Order in ₹3.9 Crore Service Tax Dispute [Read Order]

In a recent development, the Supreme Court considered an appeal filed by law firm Fox Mandal and Company challenging a service tax order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Fox Mandal and Company filed a civil appeal before the Supreme Court against the final order passed by the CESTAT.

The dispute arose from service tax demands and penalties confirmed by the adjudicating authority against the law firm for the period 2010-11 to 2014-15, including issues relating to CENVAT credit, export of services, sponsorship services and differences between figures declared in ST-3 returns and financial statements.

While deciding the appeal, CESTAT observed that the denial of CENVAT credit was mainly based on the appellant’s failure to produce original documents during audit, even though photocopies were later submitted. The tribunal explained that the issue required proper verification of documents and remanded the matter to the adjudicating authority for fresh examination.

On the claim of export of services, CESTAT observed that the benefit had been denied based on a verification report of the range officer, but the report had not been provided to the appellant before relying upon it. The tribunal explained that the matter should be reconsidered after disclosing the report and verifying the evidence relating to receipt of payments in foreign exchange.

CESTAT upheld the service tax demand on sponsorship services, observing that the appellant had recorded the payments as sponsorship expenses in its books and had not produced any evidence to show that the payments were donations.

The tribunal also upheld the demand based on differences between the ST-3 returns and the financial statements, observing that the appellant had failed to provide documents explaining the discrepancy.

Aggrieved by the tribunal’s order, Fox Mandal and Company approached the Supreme Court by filing a civil appeal.

During the hearing, counsel for the appellant sought time to place additional documents on record in support of the appeal.

After hearing the counsel, the bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe observed that time could be granted to enable the appellant to bring additional documents on record. The court adjourned the matter for two weeks and listed the case for hearing on 25 March 2026.

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