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Showing 21 to 40 of 406322 Records
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2024 (5) TMI 386 - ITAT MUMBAI
Validity of unsigned order - Final assessment order not signed by the AO - DR submitted that the additions made in the draft assessment order and the final assessment order are the same and as the draft assessment order has been duly signed by the AO and the additions made therein have been confirmed by DRP no prejudice is caused to the assessee if the final assessment order is not signed by the AO - HELD THAT:- The Board has issued instructions from time-to-time laying down the procedures for signing of the notices and the assessment orders. Sub-section (2) of section 282A of the Act explains the connotation of expression "authentication". Thus, signing of document and authentication of document carry different meaning.
Signing of document denotes committing to the document, whereas, authentication of document relates to genuineness of origin of document. If signing and authentication would mean the same, then there was no need for the Legislature to lay down the requirement of signing the documents, viz., notices, orders, etc., in sub-section (1) and explain the purpose of authentication in sub-section (2) of section 282A of the Act. If argument of the Revenue is accepted, then the provisions of sub-section (1) of section 282A would become redundant.
Revenue has tried to take shelter under section 292B of the Act. The said section cures the procedural defects or omissions. The section does not grant immunity from non-compliance of statutory provisions. Non-signing of an assessment order is not a procedural flaw that can be cured subsequently. The order is complete only when it is signed and released. The date on which the order is signed by the AO is the date of order. If the Revenue's contention is accepted and the AO is allowed to sign the assessment order now considering it to be procedural deficiency, still the order would suffer from the defect of limitation and would be without jurisdiction.
In the case of Vijay Corporation [2012 (4) TMI 353 - ITAT MUMBAI] co-ordinate Bench in a case where the assessment order served on the assessee was not signed by the AO held that requirement of signature of the Assessing Officer is a legal requirement. The omission to sign the order of assessment cannot be cured by relying on the provisions of section 292B of the Act and held the order invalid.
Ergo, in facts of the case and documents on record, we hold the unsigned impugned assessment order served on the assessee invalid and quash the same. Decided in favour of assessee.
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2024 (5) TMI 385 - ITAT JODHPUR
Validity of reopening of assessment - no approval was taken U/s 151 - HELD THAT:- On perusal of the recorded reason, it reveals that the ld. AO has not taken any approval u/s 151 of the Act from higher authorities.
Whether the mistake is curable U/s 292B? - The reply is against the revenue.Issuance of notice without approval has been rendered illegal due to breach of mandatory condition of the sanction on satisfaction of higher authority under proviso to Section 151of the Act. Considering this, we set aside the impugned appeal order. See M/S DHADDA EXPORTS VERSUS INCOME TAX OFFICER, WARD 1 (1) , JAIPUR [2015 (4) TMI 304 - RAJASTHAN HIGH COURT] - Assessee appeal allowed.
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2024 (5) TMI 384 - ALLAHABAD HIGH COURT
Benami transaction - The applicant was found in possession of a significant amount of cash during an income tax raid - whether the bare ingredients of the offence under Section 53 read with Section 3 of PBPT Act were satisfied in the present case? - applicant submit that the applicant is an innocent person and has been falsely implicated in the present case due to enmity - whether sufficient ground for proceeding exists in the case or not? - HELD THAT:- Prosecution under Section 53 of PBPT Act can be initiated only in a case where the alleged transaction is either a Benami transaction pertaining to a Benami property or has been entered in order to defeat the provisions of any law or avoid payment of statutory dues or avoid payment to creditor whereas the complaint filed against the applicant does not make any whisper in this regard. In the absence of any allegation to the effect that the alleged transaction was entered by the applicant in order to defeat the provisions of any law or avoid payment of statutory dues or avoid payment to creditor, prosecution under Section 53 of PBPT Act could not have been initiated against the applicant, thus, the impugned summoning order dated 27.02.2024 fails on this count also.
It is also observed here that from the perusal of impugned summoning order dated 27.02.2024 it is evident that the learned trial court has not even applied its mind to the fact that whether the bare ingredients of the offence under Section 53 read with Section 3 of PBPT Act were satisfied in the present case or not. Further, this Court is of the view that summoning an accused is a very serious matter and the summoning order has to be passed after considering the legal aspects and material available on record in this regard Hon'ble Supreme Court of India has held that the order of issuance of process is not an empty formality. The Magistrate is required to apply his mind as to whether sufficient ground for proceeding exists in the case or not in the cases of Lalankumar Singh [2022 (10) TMI 1135 - SUPREME COURT], Pepsi Foods Ltd. [1997 (11) TMI 518 - SUPREME COURT], Mehmood UL Rehman [2015 (3) TMI 1349 - SUPREME COURT]
After going through the facts and circumstances of the case, this Court finds that learned trial court has not applied its judicial mind while summoning the applicant and has completely relied on the averments made in the complaint dated 27.02.2024 and also the order of summoning is a non-speaking order, therefore, in the opinion of this Court, the applicant has made out a case for interim relief. The matter requires consideration on fact and law both.
Learned Counsel for the opposite party Nos.1 and 2 prays for and is granted four weeks' time to file the counter affidavit. Two weeks' time thereafter shall be available to learned Counsel for the applicant for filing rejoinder affidavit.Accordingly, list/put up this case on 30.08.2024.
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2024 (5) TMI 383 - GUJARAT HIGH COURT
Revocation of ADD imposed on Purified Terephthalic Acid - Absence of any recommendation by the Designated Authority (DA) - Sunset review - exported from the People’s Republic of China, Iran, Indonesia, Malaysia, Taiwan, Korea RP and Thailand - levy without initiating sunset review - by N/N. 03/2020-Customs (ADD) dated February, 2, 2020 issued by respondent No. 1 – Union of India, Ministry of Finance, Department of Revenue, Government of India, N/N. 28/2016-Customs (ADD) dated 5th July, 2016 and Notification No. 28/2019 – Customs (ADD) dated 24th July, 2019 are rescinded.
HELD THAT:- The issue raised in this petition with regard to revocation of ADD on subject goods during the five years without initiating sunset review is no more res integra in view of decision of this Court in similar facts in case of Realstrips Limited and others [2022 (9) TMI 1171 - GUJARAT HIGH COURT], wherein in case of levy of countervailing duty under the Act having pari-materia provisions for levy of ADD, this Court after considering the case laws cited by both the sides answered the question that rescinding the notifications of levy of countervailing duty was irregular and illegal exercise and such notification rescinding the countervailing duty could not have been issued when the exercise in law is required to be undertaken pursuant to the commencement of process of sunset review not completed in that case, whereas in the facts of the case, sunset review was never initiated.
The contention raised on behalf of the respondents are considered by this Court in the aforesaid decision of Realstrips Limited and others in detail however, the specific contention raised by respondent No. 3 in the affidavit in reply to justify the revocation of ADD on the subject products is concerned, the respondent No. 3 has only narrated the factors which may be considered for taking a decision by the Central Government to revoke the ADD, however, as held by the aforesaid decision of Realstrips Limited and others, the Central Government could not have issued the notification rescinding the ADD in absence of any recommendatory exercise conducted by the Designated Authority and without waiting for such recommendation of the Designated Authority in accordance with the prescribed procedure in the Rules.
Therefore, the impugned notification issued by the Central Government is without power in the manner in which it is issued in absence of any recommendation by the Designated Authority.
Therefore, the procedure prescribed as per the provisions of the Act and the Rules could not be considered as directory as the same would reduce the entire scheme of levy of ADD as futile exercise to be carried out by treating such procedure as optional, more particularly, when the Designated Authority has recommended for continuation of ADD on the subject product and based upon such final recommendation, Notification No. 28/2019 dated 24th July, 2019 was issued by the Central Government for continuation of the ADD on the subject product to be imported from Thailand and Korea RP. So far as other subject countries are concerned, Notification No. 28/2016 was very much in existence for levy of ADD and the Designated Authority was required to conduct sunset review for making recommendation as to continue to levy ADD on the other subject countries such as China PR, Iran, Indonesia, Malaysia and Taiwan after completion of five years.
As the facts of the present case are similar to the facts which were before the Court in case of Realstrips Limited and others. Adopting the same reasonings and result of the discussion made therein, the present petition is allowed in terms of the following orders and directions:
(i) The Notification No. 3/2020-Customs (ADD) dated February 2, 2020 issued by respondent No. 1 rescinding the anti-dumping duty on subject goods is hereby quashed and set aside.
(ii) Respondent no. 2 shall immediately proceed to initiate Sunset review process in relation to the continuance or otherwise of the ADD already levied as per Notification No. 28/2019 – Customs (ADD) dated 24th July, 2019. So far as Notification No. 28/2016-Customs (ADD) dated 5th July, 2016, the period of five years is over during the pendency of this petition.
(iii) The provisions of the Act and the rules so far as sunset review in case of Notification No. 28/2019 – Customs (ADD) is concerned, same shall be complied with and completed in accordance with the statutory provisions and rules for determining about the continuation or recurrence of injury to domestic industry in respect of the product in question.
(iv) As the No. 3/2020-Customs (ADD) dated February 2, 2020 is set aside, the original Notification No. 28/2019 – Customs (ADD) dated 24th July, 2019 shall revive and ADD shall become leviable on the product in question.
(v) Respondent no. 2 after initiation of sunset review shall comply with the Rules 23 and 24 of the Rules and shall recommend to the Central Government for its continuance or withdrawal of ADD on subject goods. Since the review process is yet to commence, respondent no. 2 Designated Authority shall issue notification of initiation of sunset review and thereafter complete the same as per Rules 23(2) and (3) of the Rules. However, in the interregnum i.e. from the date of Notification No. 3/2020 dated February 2, 2020 till respondent no. 2 takes appropriate decision after final findings notification is issued by the respondent No. 1, levy of ADD shall continue on the subject goods till 19.07.2024.
Petition disposed off.
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2024 (5) TMI 382 - SC ORDER
Doctrine of subrogation - Allowing recourse to the Financial Creditors against the Personal Guarantors of Asian Colour Coated Ispat Limited - Resolution Plan approved - it was held by NCLAT that 'commercial wisdom of the CoC has been given supremacy and no grounds exist for the Adjudicating Authority or Appellate Tribunal to interfere' - HELD THAT:- There are no error in the NCLAT - appeal dismissed.
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2024 (5) TMI 381 - SC ORDER
Validity of Resolution Plan - classification as made in Resolution Plan between payment to employees, is discriminatory and violative of provisions of Section 30, sub- section (2) of the Code or not - it was held by NCLAT that The distribution to the employees, whose liquidation value was ‘NIL’ falls within the commercial wisdom of the CoC and the said clause of Resolution Plan cannot be impugned on the said ground, nor the said proposal for payment is violative of Section 30, sub-section (2) (b) of the Code.
HELD THAT:- There are no substantial question of law arises in this Appeal - appeal dismissed.
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2024 (5) TMI 380 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Admissibility of CIRP u/s 9 of the IBC - petition filed without delivery of a demand notice under Section 8 of the IBC - Appellant is liable to pay the outstanding dues to the Operational Creditor or not - existence of debt or not - time limitation - HELD THAT:- There is no tripartite agreement on record which could have guided the mode and responsibilities of payment. Without any agreement in place, in the facts of the instant case, the responsibility to repay the outstanding dues remains on the Appellant. As the IBC proceedings are self-contained which govern the course of action in such situations, the Appellant cannot take refuge of Section 230 Indian Contract Act, 1872 that the “agent cannot personally enforce, nor be bound by, contracts on behalf of principal” and pass on its liability to VIL.
Validity or otherwise of the service of Demand notice - HELD THAT:- Demand notice dated 31.07.2018 was sent by registered post on 01.08.2018 to the registered address of the Corporate Debtor, which was not replied to by the Corporate Debtor. Some documentary evidence is available on record, which includes the details of the India Post and the postal receipt, which indicate that the demand notice has been issued, even though the addresses are not fully legible and correct in the receipt and acknowledgement. This will not make any material difference as both parties have been dealing in business for long and were continuously exchanging lot of emails - Furthermore, the Applicant never disputed the address on which the demand notice was issued to the Corporate Debtor. But it has merely questioned the failure of proof of the service of the statutory demand notice, which appears to be spurious granted and unsustainable.
The Adjudicating Authority has clearly brought out that as per records, the date of default is 12.12.2015. The TMPL acknowledged the debt and paid certain invoices and also facilitated in barter arrangement in the year 2017. Later on, there is an admission of liability by way of emails dated 21.07.2017 and again on 18.09.2017, which amounts to the admission of liability. Since there is an admission of liability on 18.09.2017, their cannot be any question of claims to be time barred as the period of limitation starts afresh from the date of admission of 18.09.2017. There is a clear admission with respect to the unpaid invoices / outstanding dues by the Corporate Debtor, with no dispute or denial of any kind.
It is clearly brought out that there is a debt in terms of Section 5(21) of the Code and that there is also a default in terms of Section 3(12) of the Code and also the debt is within the period of limitation and there is no dispute raised at any point of time. Therefore, the Adjudicating Authority has rightly come to the conclusion that it satisfies the requirement for admission under Section 9 for Corporate Insolvency Resolution Process.
There are no error in the orders of the Adjudicating Authority - appeal dismissed.
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2024 (5) TMI 379 - MADRAS HIGH COURT
Territorial Jurisdiction - impugned proceeding has been initiated by the Officer located at Tirunelveli in respect of the dispute that had arisen in Chennai in respect of the rental income received by the petitioner from renting of the property - HELD THAT:- Considering the fact that the petitioner has already paid the disputed tax and considering the fact that the petitioner is raising fundamental issue, which goes to the root of the issue, a reprieve is given to the petitioner by quashing the impugned order and by remitting the case back to the respondent to pass fresh orders on merits and in accordance with law within a period of 90 days from the date of receipt of a copy of this order, subject to the petitioner filing a detailed reply to the show cause notice.
Considering the fact that the petitioner has already paid the tax, the order attaching the bank account of the petitioner with the concerned bank shall stand vacated. The petitioner is directed to co-operate with the respondent.
The writ petition is allowed.
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2024 (5) TMI 378 - MADRAS HIGH COURT
Levy of service tax - service received by the respondent/Assessee received in India, provided by nonresident/ person located outside India - reverse charge mechanism - HELD THAT:- The issue is no longer res integra. The same is decided by the Supreme Court in the case of C.S.T. DELHI VERSUS M/S. SOJITZ CORPORATION [2022 (11) TMI 48 - SUPREME COURT] where the levy of service tax was set aside.
The writ petition is disposed of.
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2024 (5) TMI 377 - CESTAT CHENNAI
Levy of service tax on purported receipt of service charges - Erection, Commissioning and Installation Service - period from 01.04.2010 to 31.03.2011 - HELD THAT:- The appellant had not received the consideration for the services rendered to M/s. JSW Steels Ltd., for an amount of Rs.14,10,405/- as the Cheque was never encashed by the appellant. As no amount was received by the appellant, the liability of Service Tax cannot be fastened to them.
The impugned order is set aside - appeal allowed.
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2024 (5) TMI 376 - CESTAT CHANDIGARH
Levy of service tax - Business Auxiliary Services - appellant are purchasing SIM Cards/Recharge coupons from BSNL on full payment of the Purchase consideration and selling these SIM Cards/ Recharge coupons to its customers on a Principal to Principal basis on a profit Margin - HELD THAT:- It is found that the commission received by the appellant are for sale of SIM Cards and other products of BSNL. It is also found that the service tax has already been paid by the BSNL on the products sold by the appellant.
This issue is no more res integra and has been settled by the various decisions of the Tribunal as relied upon by the appellant in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S RAMA SALES AND SERVICES [2018 (3) TMI 556 - ALLAHABAD HIGH COURT], the Hon’ble Allahabad High Court held that purchase and sale of SIM Cards by franshisee/distributors appointed by telecom companies not leviable to Service Tax under category of Business Auxiliary Service especially when such companies already discharged service tax on gross amount of Such SIM cards and charging any further service tax on same amount would lead to double taxation.
Revenue relied upon the decisions of the Hon’ble Apex Court in the case of IDEA MOBILE COMMUNICATION LTD. VERSUS CCE. & C., COCHIN [2011 (8) TMI 3 - SUPREME COURT]. It is pertinent to mention that this judgment of the Hon’ble Apex Court was considered by the Tribunal in the case of COMMISSIONER VERSUS DAYA SHANKAR KAILASH CHAND [2015 (8) TMI 1007 - ALLAHABAD HIGH COURT] and it was observed by the Tribunal that the issue involved in the said case before the Supreme Court was different than the issue involved in the present case.
The impugned order is not sustainable in law and the same is set aside - Appeal allowed.
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2024 (5) TMI 375 - CESTAT KOLKATA
Suppression of production and clandestine removal of excisable goods without payment of duty - demand confirmed on the basis of certain loose sheets/documents recovered from the trading firm located in the same premises where the appellant-company is also located - demand also based on statements recorded from the Director Shri Amit Agrawal - corroborative evidences or not - Penalty imposed on Shri Amit Agrawal, Director - HELD THAT:- The installed capacity of the unit was 6,000 M.T. only. As per the records, the appellant has produced 5377.140 M.T. of the goods and cleared the same on payment of duty. There is no evidence brought on record to show any increase in the installed capacity of the unit during the material period. There is no evidence available regarding excess consumption of electricity or procurement of raw material or utilization of labour to produce excess goods clandestinely. If the excess production of 1365.257 M.T. is added, then that would amount to production of 6742.397 M.T. (5377.140 M.T. + 1365.257 M.T.) by the appellant during a period of 11 months, whereas the installed capacity of the unit itself is only 6,000 M.T. per annum. The adjudicating authority has not given any finding as to how it is possible to produce excess quantity beyond the installed capacity. Thus, the demand has been confirmed much beyond the installed capacity of the unit without adducing any evidence in support of clandestine manufacture and clearance.
The entire allegation is based on certain loose sheets / documents recovered during the course of search. The clandestine removal has not been corroborated with any other evidence. The burden of proving clandestine removal with positive, tangible and cogent evidence is on the Department, to establish that the appellant has manufactured and clandestinely cleared the goods.
For the purpose of establishing clandestine clearance, there must be documentary evidence, to support the said allegation. The entire demand in this case has been made only on the basis of some loose sheets and the statement of Shri Amit Kumar Agrawal. Oral statements being secondary evidence, cannot prevail over documentary evidences. There is no shortage or excess of raw material or finished goods found at the time of search in the factory of the appellant. No parallel invoice was found during the course of search operations. There is no verification done at the customer’s end regarding receipt of the clandestinely manufactured and cleared goods.In the absence of any such evidence, the allegation of clandestine removal cannot be substantiated only on the ground of assumptions and presumptions.
In the entire records of proceedings, there is no evidence to indicate that there was clandestine manufacturing. There is no independent tangible evidence on record of any clandestine purchases or receipt of the raw materials required for the manufacturing of the alleged quantity of finished goods for its clandestine removal from the factory - There is also no cogent evidence of disproportionate and unaccounted receipt and consumption of the basic raw materials and packing material, required for manufacturing alleged quantity of unaccounted finished goods. There are no tangible proof of unauthorized payment for procuring such unaccounted raw material and packing material - thus, the unaccounted production in the factory of the appellant-company has not been established.
There is no corroborative evidence brought on record to substantiate the allegation of clandestine manufacture and clearance of finished goods by the appellant. In the absence of such corroborative evidence, the demand of central excise duty confirmed in the impugned order is not sustainable. In view of the above discussions and the decisions, the demand of Rs.56,52,591/- confirmed in the impugned order, on the basis of the loose sheets/documents found in the trading firm is not sustainable. and hence we set aside the same.
As the demand itself is not sustainable, the question of demanding interest and imposing penalty on the appellant does not arise.
Penalty imposed on Shri Amit Agrawal, Director - HELD THAT:- It is observed that a Statement dated 26.02.2009 was recorded from him by showing 5000 pages of loose sheets after conclusion of search operation at 9.15 pm on 26.02.2009. and it cannot be considered as a certificate of correctness of each and every transaction appearing in loose sheets. Hence, the statement given by him cannot be considered as an admission of his guilt. Since the offence alleged to have been committed by the appellant company is not established, it is held that imposition of penalty on the basis of the same allegation is not sustainable. In the absence of any evidence to show specific role played by a Director and his active involvement, in the commission of the offence, penalty cannot be imposed under Rule 26 of the Central Excise Rules, 2002.
The allegations of clandestine removal and clearance of goods without payment of duty has not been established - the role of the Director in the alleged clandestine manufacture and clearance of the goods is not established - no penalty is imposable on him under Rule 26 of the Central Excise Rules, 2002. Accordingly, the same is set aside.
The impugned order is set aside - appeal allowed.
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2024 (5) TMI 374 - CESTAT ALLAHABAD
CENVAT Credit - services provided by Container Corporation of India Ltd. during the period from June, 2015 to March, 2016 on GTA Service - liability of Service Tax on amounts paid to East Central Railways.
CENVAT Credit - GTA Services - HELD THAT:- The Appellant exported its final products i.e. Carbon Black from JNPT, Mumbai via ICD Kanpur in respect of which M/s Container Corporation of India Ltd. charged GTA Services from ICD Kanpur to JNPT, Mumbai - the issue is no more res integra and is squarely covered by the judgement of Hon’ble Gujarat High Court in the case of CENTRAL EXCISE VERSUS INDUCTOTHERM INDIA P LTD [2014 (3) TMI 921 - GUJARAT HIGH COURT]. Hon’ble High Court while considering the issue of admissibility of Cenvat credit of Service Tax paid on Cargo Services, held that any service availed by the Exporter, until the goods left India from the port, shall be considered as services used in relation to clearance of final products upto the place of removal - it is the Appellant and not the Container Corporation of India Ltd. who continued to remain owner of the goods till the goods are exported. Therefore, the place of removal would be JNPT Mumbai and not ICD Kanpur. The Appellant has rightly availed Cenvat credit on Service Tax paid on GTA from ICD Kanpur to JNPT, Mumbai - demand on account of Cenvat credit amounting to Rs.98,765/- alongwith interest is set aside, penalty of Rs.49,383/- imposed under Rule 15(2) of Cenvat Credit Rules is also set aside.
Liability of Service Tax on amounts paid to East Central Railways - HELD THAT:- The railway crossing in question is used not only by the Appellant but also by residents of the colonies and also by industries situated in the adjoining areas. That in the aforesaid background, during the period 2014-15 & 2015-16, Appellant paid an amount of Rs.14,22,468/- and Rs.14,61,966/-respectively to East Central Railways as recovery of wages of two gate keepers of railway crossing. As the charges were not in respect of any service provided by Railways to Appellant, hence neither Railways charged service tax on the same, nor Appellant paid service tax under reverse charge mechanism - East Central Railway has not provided any service to the Appellant under the category of Business Support Services as alleged by the Department and Railways was performing statutory obligation by way of constructing a railway crossing and posting of two gatemen. The payment made by the Appellant to the Railways during the period 2014-15 to 2015-16 does not attract any Service Tax liability and the Appellant was not required to discharge Service Tax under reverse charge mechanism. Thus, the demand of Rs.6,76,049/- alongwith interest and penalty of Rs.3,38,025/- is set aside.
The impugned order is set aside - appeal allowed.
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2024 (5) TMI 373 - CESTAT CHANDIGARH
Refund claim for service tax paid on specified services used in relation to authorized operations in the SEZ unit - rejection of refund on the ground that wrong address being mentioned in the invoices and the input services have not been consumed in the SEZ unit - refund sanctioning authority held that the input services have not been consumed in the SEZ unit, merely on account of raising of invoices by the service providers on the registered office of the company instead of its SEZ unit - N/N. 12/2013-ST dated 01.03.2013 - HELD THAT:- The respondent has brought on record the fact that the registered office of the company does not carry out any operation and it is merely a liasoning office and has been established only for the purpose of correspondence with vendors etc and in compliance with provisions of the Companies Act and no commercial activity is being undertaken from this office and also, no GST registration is obtained for this office by the respondent. All the input services have been consumed in the SEZ unit located in Gurugram, Haryana, which is further cleared from the declarations issued by the service providers specifically stating that the input services in question have been provided by them to the SEZ unit and the same have been consumed in the SEZ unit only.
This issue is no more res integra as the same has been decided by various courts in a plethora of decisions consistently holding that the Cenvat Credit cannot be denied pertaining to certain input service invoices which are addressed to unregistered premises of the respondent. In this regard, reference made to the decision of the Hon’ble Allahabad High Court in the case of M/S CYQUATOR MEDIA SERVICES P. LTD. VERSUS UNION OF INDIA THRU' ITS SECY. & 2 OTHERS [2017 (12) TMI 775 - ALLAHABAD HIGH COURT] wherein Hon'ble High Court while deciding a similar issue has held that if all the information as stipulated in Rule 4A of Service Tax Rules is mentioned on the invoice, the Cenvat Credit cannot be denied.
Further it is found that the receipt and the use of input services by the respondent have not been questioned by the Department and the issue relates only to validity of invoices which were issued to the wrong address, which is not registered with the Service Tax - it is a settled law that substantial benefit cannot be denied merely on a procedural infraction.
There are no infirmity in the impugned order and the same is upheld - the respondent is entitled to refund of service tax paid on input services used in relation to authorized operations in their SEZ unit situated in Gurugram, Haryana.
The appeal of Revenue dismissed.
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2024 (5) TMI 372 - CESTAT BANGALORE
Levy of service tax - Employees were deputed to the assessee - receiving services from the overseas company FFECJ through Dispatch Agreement and Secondment Agreement in deployment of qualified and skilled employees during the said period - extended period of limitation.
The Revenue’s argument is that the facts of the present case are similar to the facts decided by the Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd.’s case [2022 (5) TMI 967 - SUPREME COURT]; hence applying the ratio laid down in the said case, the service tax demand confirmed by the adjudicating authority be restored. On the other hand, the respondent argued that the Dispatch Agreement and Secondment Agreement are different in the present case to the one decided by the Hon’ble Supreme Court; hence ratio of the Supreme Court judgment is not applicable to the present case.
HELD THAT:- In the sample Secondment Agreement and the Dispatch Agreement between the respondent and FFECJ reveals that these agreements’ terms and conditions are more or less similar to the one referred to in para 3 of the judgment of the Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd. In the present case also, the respondent was in need of personnel for facilitating the business operations in India and the overseas company which has such personnel who possesses the requisite qualification and skilled employees itself desired to employ such persons on exclusive basis and the overseas company has duly consented to depute such personnel. The deputed personnel while under employment with the respondent was not in any way subjected to any kind of instruction or control or direction or supervision of the overseas company and they would report only to respondent’s management - The remuneration to be paid by the respondent to dispatched personnel as laid down at Article 5 comprising of Monthly salary in India; Monthly Salary in Japan; Bonus in Japan and any other allowance paid / cost incurred for the dispatched personnel during the employment period. Further it is agreed that in respect of monthly salary in India and monthly salary in Japan and bonus in Japan on the request of the dispatched personnel as his home country is Japan and for administrative convenience, respondent company to request overseas company to make such payments in Japan which shall be reimbursed by the respondent on actual cost basis.
In the Secondment Agreement, the dispatched personnel agrees with all the conditions settled between the respondent and the overseas company under the dispatch agreement.
A careful reading of the Dispatch Agreement along with the Secondment Agreement and also the contract of the employment, letter of employment etc., there are no substantial difference from the facts stated in the judgment of Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd.’s case - it was held in the said case that ' it is held that the assessee was, for the relevant period, service recipient of the overseas group company concerned, which can be said to have provided manpower supply service, or a taxable service, for the two different periods in question (in relation to which show cause notices were issued).'
Their Lordships on the issue of invocation of extended period of limitation decided in favour of the assessee.
The impugned order is set aside and the matter is remanded to the adjudicating authority to compute the liability of the service tax payable with interest for the normal period of limitation - appeal disposed off by way of remand.
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2024 (5) TMI 371 - CESTAT NEW DELHI
Non-payment of service tax - Business Auxiliary Service - activity of using Galileo CRS system - Tour Operator’s Service - services of domestic and international hotel bookings - Banking and Other Financial Service - activity of sale/purchase of foreign exchange by the appellant - extended period of limitation.
Service Tax with respect to Business Auxiliary Services allegedly rendered to M/s. GIPL - HELD THAT:- What is important to notice is that for an activity to qualify as “promotional”, the person before whom the promotional activity is undertaken should be able to use the services. The passenger cannot directly use the CRS software provided by the Company to book an airline ticket. It cannot, therefore, be said that a travel agent is promoting any activity before the passenger. It has also been held that mere selection of software for exercising of a choice would not result in any promotional activity. The department is opined to have failed to point out any activity undertaken by an Air Travel Agent that promotes the business of the CRS companies - the demand of service tax on the amount of incentives received by appellant from GIPL/ITQPL under ‘Business Auxiliary Service’ has wrongly been confirmed. The same is hereby set aside.
Service Tax with respect to Tour Operator’s Service - HELD THAT:- In view of the statutory definition of "tour", considered in the context of the legal position demarcating the limits of the application and reach of provisions of the Act, it is clear that a journey from one place to another beyond the territorial limits of India, even if amounting to an activity comprised within the ambit of the definition of "tour operator", would not amount to a taxable service under the provisions of the Act. On the aforesaid analysis we conclude that the consideration received for operating and arranging outbound tours, even if falling within the scope of the amended definition of "tour operator”; (provided by the assessees and consumed by their tourist customers beyond Indian territory), is not liable to levy and collection of Service Tax, under provisions of the Act - This issue is otherwise no more res integra as stands decided by the Larger Bench of this Tribunal in M/S COX & KINGS INDIA LTD., M/S TRAVEL CORPORATION OF INDIA LTD. AND M/S SWAGATAM TOURS PVT. LIMITED VERSUS CST, NEW DELHI [2013 (12) TMI 1024 - CESTAT NEW DELHI] where it was held that 'Planning and scheduling of outbound tours may not be components of services provided to tourists, would amount to an incidental activity undertaken as a prelude to providing tours and thus the service if at all provided is to the service provider itself. Nevertheless, since organizing and/or arranging of outbound tours are components of the service provided to tourists and these are the primary and substantive purposes of the service provided and consumed, the composite activity of planning, scheduling, organizing or arranging tours falls within the scope of the taxable service defined in Section 65(115) of the Act.' - thus, tax demand of Rs.6,54,828/- on outbound tours has wrongly been confirmed.
Service tax on the amount received for Eurail passes for the travelers - HELD THAT:- The said service charges collected by the appellant from the tourist is leviable to Service Tax under "Tour Operator's Service". It is apparent that appellant is merely re-selling Eurail passes and is in no way concerned for arranging tours in Europe by Eurail. Appellant is merely purchasing such passes from other Indian tour operators and reselling them to the tourists. They are earning small amount on resale of such passes as commission. Selling Eurail passes is merely selling a commodity or a service and there is no general service tax levy on resale of services. Further in the light of above discussion about definition of ‘tour operator’, the present activity does not get covered. Hence the demand on this count is not sustainable. The order under challenge is set aside to this extent.
The service tax on account of allegedly rendering the Banking and other Financial Services in respect of sale/purchase of foreign exchange - HELD THAT:- The demand on this count has already been dropped except for Rs.2,037/-. It is observed that the foreign currency has been received by the appellant while planning, scheduling, organizing, etc., the outbound tours. It cannot be ruled out that receiving consideration in convertible foreign exchange facilitates and encourage inflow of currency into India and simultaneously avoid outflow of Indian currency i.e. the purpose is to augment foreign exchange earnings. There are no evidence on record which may show that the appellant was dealing with sale and purchase of foreign exchange directly except that the foreign exchange dealer from whom the passenger purchases the foreign exchange adds a profit on the foreign currency sale rate and reimburses the same to the appellant - That entry 'Banking and other Financial Services’ under the amended Finance Act, 2008 in no way covers the said transaction of the appellant. The only entry could be under (a) (iv), (vii) or under (b) of Section 66(12) of the Act. However, the appellant states that they are not having any license for brokerage in foreign exchange and they are not carrying out any such activity. Therefore, neither under (a) (iv) or under (a) (ix) or under (b), there is a case for bringing the impugned transaction under the category of Banking and other Financial Services. The demand is therefore liable to be set aside.
Invocation of extended period for issuing show cause notice - HELD THAT:- The activities as that of using CRS of GPIL/ITQPL etc. was under consideration and at the relevant point of time had the contradictory decisions. So is true as far as the activity of Tour Operator’s Services is concerned. During the relevant time the decisions were in favour of the assessee-appellant. The said confusion about the nature of the impugned activities/services is sufficient to hold that appellant did not take service tax registration on the bona fide ground. There are nothing on record which may prove a positive act on the part of the appellant about mala fide intent to evade the payment of duty - the confirmation of demand for the period beyond the normal period is liable to be set aside as the extended period is not invokable in the given set of circumstances.
The order confirming the demand on service tax on inbound tours and domestic tours under Tour Operator’s Services is upheld, however, for the normal period. Rest of the demand is held to be non-sustainable - Appeal allowed in part.
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2024 (5) TMI 370 - CESTAT ALLAHABAD
Eligibility for deduction of cost of medicines incurred for providing health services - N/N. 12/2003-ST dated 20.06.2003 - HELD THAT:- The decision of larger bench relied upon by the Commissioner (Appeals) in the case of M/s Aggarwal Colour Advance Photo System has been set aside by the Hon’ble Madhya Pradesh High Court vide its order dated 13.03.2020 [2020 (4) TMI 799 - MADHYA PRADESH HIGH COURT] where it was held that 'in goods, the tax on such sale or purchase of goods is leviable. In this view of the matter, after the 46th Amendment, there is no question of dominant nature test applying in photography service and the works contract, which is covered by Clause (29A) of Article 366 of the Constitution where the element of goods can be separated, such contracts can be subjected to sales tax by the States under Entry 54 of List II of Schedule II. Once that is so, value of photographic paper and consumables cannot be included in the value of photography service for the purposes of imposition of service tax.'
From the decision of Hon’ble High Court it is quite evident that the benefit of exemption under Notification No 12/2003-ST cannot be denied just for the reason that the value of goods consumed in providing the taxable services is not separately indicated in the invoice, or no separate invoice for the sale of such goods have been made. The appellant hospital admittedly consuming the medicines and other consumables for providing the health services to its client. The only reason recorded in the impugned order for denying the said benefit is non production of sale bills showing sale of the medicines which were actually consumed in providing the health services. Commissioner (Appeal) has based his order on decision of larger bench of tribunal referred above. However as this decision has been set aside by the Hon’ble High Court reliance placed on the said decision cannot be upheld.
The he impugned order is set aside, Order-in-Original passed by Deputy Commissioner has been restored - appeal allowed.
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2024 (5) TMI 369 - CESTAT NEW DELHI
Refund of Service tax paid - time limitation - application rejected as not filed within one year from the payment of the service tax as laid down in section 11B of CEA - HELD THAT:- The nature of assessment and refunds were examined by the Supreme Court in Priya Blue Industries vs Commissioner of Customs (Prev) [2004 (9) TMI 105 - SUPREME COURT] which was a Customs case and Collector of Central Excise vs Flock (India) Pvt. Ltd. [2000 (8) TMI 88 - SUPREME COURT] which was a central excise case. In both judgments, the Supreme Court held that refund can only be sanctioned in pursuance of the assessment not such as to have the effect of changing the assessment.
After these judgments, there have been changes in the law and self-assessments were introduced. The question which arose is if there was only self-assessment and no re- assessment by the officer, if the refund could be sanctioned contrary to the self assessment. This was answered by a larger bench of Supreme Court in negative in ITC Ltd. vs Commissioner of Central Excise, Kolkata IV [2019 (9) TMI 802 - SUPREME COURT]. It has been held that all assessments, including self-assessments are appealable and unless the assessment is modified, no refund could be sanctioned so as to change the assessment. The reason for this is the refund proceedings are in the nature of execution proceedings and they cannot be used to re-determine the liabilities - Thus, it was held that through refund proceedings, the assessment (including self-assessment) cannot be modified. Through ITC Ltd., a batch of matters were disposed of. The discussion in this judgment was largely based on the provisions of Customs Act but the principle laid down was clear that refund proceedings are only in the nature of execution proceedings and cannot change the assessment.
The legal position is loud and clear. Refund proceedings are in the nature of execution proceedings and they cannot modify an assessment including self-assessment. Refund can only be sanctioned or denied as per the assessment- be it self-assessment by the assessee or the best judgment assessment by the officer. This legal position will not and cannot vary depending on which side it favours. The law laid down in ITC Ltd. and BT (India) Pvt. Ltd. applies whether the claimant will get refund as a result or will be denied refund as a result. In neither case can the refund, which is in the nature of an execution proceeding be used to alter the assessment. Thus, the order of the Larger bench of this Tribunal in Balaji Warehouse interpreting the applicability of ITC Ltd. to service tax matters relied upon by the appellant has been clearly overturned by the High Court of Delhi in BT (India) Pvt. Ltd. Clearly, ITC Ltd. applies to service tax matters also.
Since the appellant had self-assessed service tax without applying the notification and the assessment has not been modified, it cannot be modified now in the refund proceedings. As per the self-assessment, the appellant was not entitled to the refund.
The impugned order is upheld - appeal dismissed.
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2024 (5) TMI 368 - CESTAT NEW DELHI
Levy of service tax - notice period recovery - Declared Service or not - Department was of the opinion that the said amount is towards agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act - HELD THAT:- The employer cannot be said to have rendered any service per se much less taxable service and has merely facilitated the exit of the employee upon imposition of cost upon him for the sudden exit. Definition in clause (e) of Section 66E is not attracted to the scenario at hand. The employer has not 'tolerated' any act of the employee but has permitted a sudden exit upon being compensated by the employee in this regard in form of Notice pay, in lieu of sudden termination. In any case this act however, does not give rise to the rendition of service either by the employer or employee.
The decision relied upon by the appellant the Principal Bench in M/S RAJASTHAN RAJYA VIDHYUT PRASARAN NIGAM LTD. VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, CUSTOMS AND CENTRAL EXCISE, JODHPUR I [2022 (1) TMI 909 - CESTAT NEW DELHI] is perused wherein it has been held 'compensation for failure under a cannot is NOT consideration for service under the contract and also following the law laid down by Madras High Court in GE T & D INDIA LIMITED (FORMERLY ALSTOM T & D INDIA LIMITED) VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE [2020 (1) TMI 1096 - MADRAS HIGH COURT] that Notice pay, in lieu of termination, however, does not give rise to the rendition of service either by the employer or the employee, the impugned order upholding confirmation of a demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained and needs to be set aside.'
The amount from employee received by appellant, the employer, in lieu of notice period is wrongly held to be an amount towards rendering the Declared Service - the order under challenge is hereby set aside - Appeal allowed.
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2024 (5) TMI 367 - MADHYA PRADESH HIGH COURT
Interest on delayed refund - scope and ambit of Section 11 B and 11 BB of the Central Excise Act, 1944 and Section 35 F and 35 FF of the Central Excise Act, 1944 - HELD THAT:- The issues raised in the present appeal is covered by the judgments in the case of THE PRINCIPAL COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX VERSUS M/S GREEN VALLIEY INDUSTRIES PVT LTD [2023 (7) TMI 1176 - MEGHALAYA HIGH COURT] and COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS M/S RIBA TEXTILES LIMITED [2022 (3) TMI 693 - PUNJAB & HARYANA HIGH COURT] where it was held that 'On such basis, the Tribunal found that the deposit had not been made on account of any duty or interest which would attract the implied bar under Section 11B of the Act. It was a possible view taken on the set of facts that presented themselves before the Tribunal and, in this appellate jurisdiction, such interpretation does not call for any interference.'
The appeal sans merit and is hereby dismissed.
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