Royalty based ST demand quashed

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, allowed the assessees' appeals and set aside service tax demands raised under the reverse charge mechanism on alleged royalty payments. 

The Tribunal held that the amounts described as "royalty" in the balance sheet merely represented deductions withheld by the State authorities pending submission of statutory Forms M and N under the Bihar Minor Mineral Concession Rules and did not constitute royalty paid for assignment of mining rights.