|
Advanced Search Options
Service Tax - Case Laws
Showing 1 to 20 of 30277 Records
-
2024 (11) TMI 1049
Service tax on amounts related to execution of statutory obligations - whether the amounts collected by the appellant from their customers towards KEB, BWSSB and Advocate fees should be treated as taxable value u/s 67 of the Finance Act, 1994 read with Rule 2A of the Service Tax (Determination of Value) Rules - as argued service tax is not payable by the appellant prior to 01.07.2010 in view of the Board Circular No. 108/02/2009-ST dated 29.01.2009 and the amounts related to execution of statutory obligations cannot be levied to service tax
HELD THAT:- The charges collected in dispute referred above are electricity charges, water charges and legal fees. These are statutory charges to be collected by the appellant and to be paid to the respective authorities are in the nature of reimbursable expenses. The issue of inclusion of reimbursable charges in the taxable value is no longer res integra in view of the decision by the Supreme Court in the case of Union of India Versus Intercontinental Consultants and Technocrats Pvt. Ltd. . [2018 (3) TMI 357 - SUPREME COURT]
In view of the above, as rightly claimed by the appellant, the above statutory reimbursable amounts cannot form part of the gross amount on which service tax is to be charged. Therefore, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.
-
2024 (11) TMI 1048
Invoking extended period of limitation - Non discharge of service tax on the legal expenses incurred under the reverse charge mechanism - Appellant failed to register themselves under the Service tax since they are providing taxable service namely renting of Samudhaya Bhavana and also towards renting of shops for business purposes - HELD THAT:- As considering the communication made by Assistant Commissioner of Central Excise confirming that the Appellant is not liable for payment of service tax and in the absence of any allegation regarding any other service provided by appellant and without any amendment of relevant provision of law, no finding can be made that the Appellant who had registered under the Societies Act and filing income tax return regularly had suppressed the facts regarding service provided by them. Since the entire demand is made by invoking the extended period of limitation and no demand is falling under normal period, the demand is barred by limitation. Appeal allowed.
-
2024 (11) TMI 1047
Service tax liability - rendering of service - sale/ transfer as a going concern by way of slump sale as defined under the Income Tax Act 1961, amounts to service - exemption from service tax under Sr. No. 37 of Notification No. 25/2012-ST - demand for Service Tax under the Proviso to Section 73 (1) with interest u/s 75 and imposed penalty equal to the said amount of service tax u/s 78.
HELD THAT:- As per entry in Notification No. 25/12–ST dated 20.06.2012 Services by way of transfer of the going concern as a whole or an independent part thereof is exempted.
Revenue, in the impugned order has denied the aforesaid exemption on the ground that in the present case the transfer of business is not an independent part of the appellant for the reason that the appellant is involved in the business of Software Development and the transfer of business is also nothing but a business of software development. Therefore, it is not an independent part of the appellant’s overall business.
Appellant before transfer of as going concern, they were providing a software solution of a product exclusively developed for the buyer of the business in the present case i.e. M/s ZeroChaos Workforce Solutions Private Limited. Therefore, the activity of software development, which was sold to M/s ZeroChaos was exclusively being done for ZeroChaos, therefore, it is clear that the software solution business which were earlier provided to ZeroChaos was absolutely independent, than their other software development business meant for other customers. Therefore, it is clear that the transfer of business as per the business agreement dated 30.10.2014 an exclusive part of the business of the appellant was out rightly transferred to ZeroChaos. The term used in the exemption entry that “ an independent part thereof” indicates that there should not be any situation where even though a business is transferred but the same is not independent and consequently the same is still continued by the transferor.
In the present case, the business related to ZeroChaos was exclusively being done for M/s. ZeroChaos and the entire business which was being done for M/s. Zero Chaos has been transferred. As per the agreement, it is clear that the same business is not subsequently continued by the appellant, which is also otherwise not possible, since, software solution was made and carried out exclusively for M/s ZeroChaos, the same business cannot be retained by the appellant for some other customer.
Appellant has transferred an exclusive part of their business to the transferee M/s. ZeroChaos, therefore, it is clearly an independent part. In this position, we do not find any doubt about the eligibility of the exemption to the appellant.
Therefore, we hold that the appellant is entitled for the exemption under Sr. No. 37 of Notification No. 25/2012-ST dated 20.06.2012. Since, we decide that the demand is not sustainable only on the ground that the appellant is eligible for exemption Notification 25/2012-ST, we are not addressing the issue that whether the transfer of business as slump sale as going concern, is service or otherwise.
-
2024 (11) TMI 1046
Classification of services - demand service tax under the category of ‘Scientific or Technical Consultancy Services’ on RCM basis on the expenditure in foreign currency declared under the head ‘Professional fees’ and ‘Sampling charges’ in the Profit & Loss Account (‘P&L’)
As submitted the demand confirmed in the instant case on the expenditure in foreign currency recorded under the head ‘Professional fees’ and ‘Sampling charges’ in the P&L A/c for the relevant period does not tantamount to ‘Scientific or Technical Consultancy’ service defined under Section 65(92) of the Finance Act, 1994 as applicable prior to 01.07.2012 inasmuch as the said category covers services provided by a scientist or a technocrat, or any science or technology institution or organization unlike the instant case -
HELD THAT:- A perusal of the definition of ‘Scientific or Technical Consultancy’ reproduced above indicate that any service rendered by them is classifiable under the category of ‘Scientific or Technical Consultancy’ only when such service is provided by a scientist or a technocrat, or any science or technology institution or organization.
In the instant case, from the agreements entered into by the appellants with the foreign vendors reveals that the service providers cannot be called as a science or technology institution or organization. They are merely experts conducting site visits for assisting the Appellant in taking informed decision on the viability of acquisition of coal mining assets situated outside India. Accordingly, we hold that the service received by the appellant from the experts cannot be classified under the category of ‘Scientific or Technical Consultancy’.
Appellant has placed their reliance on the TRU Circular dated 09.07.2001 bearing F.No.B.11/1/2001-TRU, wherein it has been clarified that the scientific or technical consultancy service envisages expert opinion/ advice in one or more disciplines of science or technology.
We observe that the activities under taken by the experts involves review and validation of the data pursuant to site visits, meetings and discussions w.r.t. estimated resources and reserves of the mines; geological data; geotechnical and hydrological conditions effecting mining etc. These activities performed by the Foreign Service providers evidently do not fall within the ambit of scientific or technical consultancy services. Thus, the Circular issued by the Board cited above also supports the view that the service rendered by the appellant can be categorized as ‘Scientific or Technical Consultancy’ only when such service is provided by a scientist or a technocrat, or any science or technology institution or organization.
All services provided in relation to mining of minerals, including the then existing taxable service of ‘survey and exploration of mineral services' were also brought under the taxable service of ‘mining of mineral, oil or gas services’. Thus, we observe that w.e.f. 01.06.2007, the service rendered by the appellant would fall under the taxable category ‘mining of mineral, oil or gas as defined under Section 65(105)(zzzy) and 65(105(zzv) of the Act.
We hold that the demand confirmed in the impugned order under the category of ‘scientific or technical consultancy services’ is not sustainable.
Demand of service tax confirmed in the impugned order on 'sampling charges' - We observe that the payment in foreign currency has been made to third party inspection agencies for carrying out inspection w.r.t. the quality of iron ore exported by the Appellant as per the requirements of the export orders. Hence, the same is classifiable as ‘Technical Inspection and Certification Service’ as defined under Section 65(108) of the Act. The services are not provided by a science or technology institution or organization and are merely in the nature of technical inspection and certification service. However, we observe there is no demand made under the category of ‘Technical Inspection and Certification Service’ as defined under Section 65(105)(zzi) of the Act. Accordingly, we hold that the impugned order confirming the demand under ‘scientific or technical consultancy services’ is not sustainable.
In respect of services covered under Section 65(105)(zzi) and 65(105)(zzv) of the Act, the taxability shall arise when the services are performed in India. In the instant case, we observe that the mines are immovable property, which are situated outside India. Thus, we observe that the mining as well as technical inspection services have been performed outside India.
Service tax liability w.r.t. Professional Fees - demand of service tax confirmed for the Negative List period, in terms of Section 66B of the Act - As in terms of Guidance Note 5 –POPOS Rules, 2012 of Service Tax Education Guide, services connected with oil/gas/mineral exploration or exploitation relating to specific sites of land or the sea bed are specified as land-related services.
In the instant case, we observe that the place of provision of service is outside India, as the service is provided by team of experts deployed by the foreign services providers to identify mines (immovable property) situated outside India. Accordingly, we hold that the same shall not be chargeable to service tax at the hand of the appellant, on RCM basis.
Service Tax liability w.r.t. Sampling Charges - Para 5.4.1 of the Service Tax Education Guide specifies technical testing/ inspection/ certification service to be performance-based service covered under Rule 4 of the POPOS Rules. Hence, the place of provision in the instant case is the place where the services are actually performed (outside India). Accordingly, we hold that the same shall not be chargeable to service tax at the hand of the appellant, on RCM basis.
We hold that the taxability does not arise in India in respect of either of the services and set aside the demands of service tax confirmed in the impugned order.
Since the demand of service tax itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
The impugned OIO has confirmed the demand post 01.07.2012 based on provisions of the Act that are not applicable post 01.07.2012. Since the order does not make reference to the provisions pertaining to the Negative List regime under the Section of ‘Discussion and Findings’, which were applicable for the period post 01.07.2012, therefore, in the absence of such reference, we hold that the service tax demand confirmed for the period post 01.07.2012 is not sustainable on this ground also.
-
2024 (11) TMI 1045
Demand sustainability on the ground of limitation - Service tax demand under the category of Goods Transport Agency (GTA) services - mainly based on income tax data, form 26AS and balance sheets of the appellant’s business of transportation of goods - HELD THAT:- As demand of service tax is raised and confirmed solely based on data received from income tax department viz. from 26AS and admittedly there was no independent examination carried out even considering such recorded income whether related to consideration received towards taxable services provided and leviability of service tax thereon.
As seen from the records that appellant has filed ST-3 returns for the disputed period and maintained records which were furnished by the appellant during inquiry, in that view, nothing prevented department from verifying returns and raising query within normal period of limitation. It is further observed that there is no such specific finding in the show cause notice of wilful suppression of facts by the appellant except contending that it would not have come to the knowledge of department if the data from income tax returns were not received from income tax department. In this background, it cannot be alleged that appellant has wilfully suppressed facts from department with intention to evade tax. Therefore the demand is not sustainable on the ground of limitation.
Without prejudice to the above finding, we further find that the transport in the present case was undertaken by the owners of the transport vehicles and no consignment note was issued.
The transportation in the present case not being under GTA is not liable to service tax in terms of the above specific item in the negative list. Therefore for this reason also the transportation service in the facts of the present case is clearly not taxable. As per our above discussion and finding, the demand is not sustainable.
-
2024 (11) TMI 1044
Request for adjourning the matter beyond three times - HELD THAT:-The reason for seeking adjournment is that the fire took place in the office of Counsel in the year 2021 i.e. more than three years from today. Even from 2021 this matter has been listed five times in the year of 2024, as stated in para-1 above.
If Counsel for the appellant was really serious about the matter, there was enough time to reconstruct the file or get the relevant documents from registry or from the appellant, for this reason also this request cannot be considered.
No justification for adjourning the matter beyond three times which is the maximum number statutorily provided. Appeal is dismissed for non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982.
-
2024 (11) TMI 1043
Rejection of refund claim - refund of the amount which was collected during investigation - refund of amount paid without liability whether permissible or not? - scope of assessee's substantive right to refund of the illegally recovered tax - HELD THAT:- The new judicial thesis instead rests on the principles of "economic and distributive justice" enshrined in the Preamble and the Directive Principles of State Policy. It also attaches significance to the unethical consequences which would flow and the fiscal and financial chaos which would follow if no bar of "unjust enrichment" is applied by the courts before ordering refunds.
Article 265 and Section 72 should all be read and understood, says the majority view, in the light of "the philosophy and the core values of (the Indian) Constitution" and in keeping with "equity and good conscience".
As discussed decision of Hon’ble Supreme Court Mafatlal Industries Ltd [1996 (12) TMI 50 - SUPREME COURT] are sufficient to clarify that seeking the refund is not a matter of right and the procedure as discussed in the decision has to be followed. In the present case, apparently none of the said procedure has been followed. Though there had been an earlier order of this Tribunal sanctioning the refund, however, the Tribunal remanded back the matter to the adjudicating authority to dispose of the refund application as per law. In compliance thereof, adjudicating authority has invoked section 11B of Central Excise Act. We do not find any infirmity in the same. We hold that the refund claim of appellant is not maintainable in the light of Mafatlal (supra) decision. Thus the order under challenge is upheld and the appeal is dismissed.
-
2024 (11) TMI 994
Service Tax demand under the category of rent a cab service, interest and imposition of penalty - invocation of extended period - HELD THAT:- We find that the issue involved in the instant case relates to the appellant’s understanding with respect of hiring of vehicles. The appellant was under the impression that hiring of vehicles does not fall under the category of renting of cab service, and therefore, the appellant was not discharging service tax in respect of vehicles hired by them.
We hold that while service provided by the appellant is taxable, the Notification of extended period of limitation cannot be sustained. The impugned order is therefore, set aside and matter remanded to the original adjudicating authority for decision in light of above findings.
-
2024 (11) TMI 993
Service tax on handling charges collected by the appellant from their customers of motor vehicle - appellant being a car dealer of Maruti Suzuki Ltd. involved in the selling car on principle to principle basis - appellant submits that the handling charges was collected by the appellant which was subsequently considered as part of the sale price of the car and the appellant have discharged the VAT on such handling charges treating the same as part and parcel of sale price of the car, any amount which is part of the sale of the goods will not attract any service tax.
HELD THAT:- We find that this issue is no longer res-integra in as much as in various judgments, it was held that if the handling charges is included in the sale value of the car and VAT was paid then such handling charges being a part and parcel of the sale value will not be exigible to service tax. See Ganga Automobiles [2023 (10) TMI 355 - CESTAT AHMEDABAD]
It is not in dispute that once the handling charges is part and parcel of the sale price of car and sales tax/VAT thereon has been paid, the same became a part and parcel of the sale value hence will not attract any service tax.
Thus the service tax demand on the handling charges collected during the sale of the car as sale price of the car cannot be levied with service tax.
Whether the handling charges is a part and parcel of the sale value of the goods and VAT was paid? - From the VAT assessment order, it is clear that the handling charges and warranty amount which was not earlier included in the sale value was included for the purpose of VAT assessment and VAT has been paid and thereafter, no VAT amount tax remains to be paid. With the above it is clear that the appellant have paid the VAT amount on the handling charges.
Therefore, the above judgments which are on the facts that the handling charges is a part and parcel of the sale value and the same was suffered the VAT tax, directly applies in the facts of the present case as discussed above.
AR raised point that this VAT assessment order were not presented before the lower authority. Therefore, the same cannot be considered at this stage. In this regard, we are of the view that as per the settled legal position this Tribunal is a final fact finding authority, therefore, considering the VAT assessment order, the demand of service tax is not incorrect. Therefore, the objection of Ld. AR cannot be sustained.
-
2024 (11) TMI 992
Classification of Services Provided - services as a steamer agent and a cargo handling agency - whether the services qualify as export of service? - since the service provided by the appellant is partly outside India, the same is covered by the definition of export of service - appellant is engaged in providing service of steamer agent in respect of vessels arriving at Kandla and other ports for discharging imported cargo and loading export cargo - appellant has got themselves registered under the category of steamer agent service covered u/s 65 (105) (i) of Finance Act, 1994, as also taken registration under the category of “Cargo Handling Agency” Service covered u/s 65(105) (zr) of Finance Act, 1994
HELD THAT:- We find that the appellant have carried out the job of segregation and internal shifting of timber logs on behalf of foreign based principals as part of their obligation but also the appellant have sent progress reports of segregation and internal shifting to the service recipient i.e. foreign based principals. Therefore, the progress report is also indeed a part of over all part of important service activity without which the service provided by the appellant would not complete.
From the above sub rule (ii) of Rule 3 of export of service rules, 2005 it is clear that the service falling under sub – clause (zn) and (zr) which are subject matter of the present case, if partly performed outside India it shall be considered as performed outside India. In the present case as discussed above, the progress report was sent to the foreign principals which is the part of the overall service. Hence, the service is partly performed outside India, therefore, it qualifies as export of service in terms of Rule 3 (ii) of Export of Service Rules, 2005.
In the identical facts where the service was performed in India but the reports of the sad service was sent to the foreign service recipient wherein it was held that performance of service not completed until progressive/analysis report delivered to the client. Delivery of report being essential part of service made outside India and used outside India. Such delivery of report to client outside India amounting to part of performance of taxable service outside India.
As relying on SGS India Pvt Ltd [2011 (2) TMI 54 - CESTAT MUMBAI] and B A Research India Ltd. [2009 (11) TMI 213 - CESTAT, AHMEDABAD] we find that since in the present case the service is complete only when the progress report is sent to the foreign service recipient. The service is partly performed outside India. Therefore, it clearly falls under the definition of export of service in terms of Rule 3 (ii) of Export of Service Rules, 2005. It is also not in dispute that against the service provided by the appellant to their foreign principals they have received the payment remittance in convertible foreign exchange. Therefore, there is no doubt that the appellant have provided the export of service. Accordingly, the demand is not sustainable.
-
2024 (11) TMI 991
Denial of CENVAT credit - expenses incurred at unregistered branches - Appellant undertakes the services of the ‘Technical Testing & Analysis Service’ from the branches that are performed on the blood samples of the Volunteers obtained during the human trials - IP molecule which is administered to the Volunteers is sometimes mixed with ancillary products. Study of the samples are sent to the Ahmedabad office from where final report is prepared - appellant did not obtain centralised registration for three branches namely Mumbai, Nadiad and Mehsana, they fail to prove that the appellant was paying the Service Tax for the services at Ahmedabad for these branches
HELD THAT:- We find that though the appellant at Ahmedabad did not obtain the centralised registration but the overall business is accounted for at Ahmedabad and depending on the nature of the activity i.e. Technical Testing & Analysis Service, which were performed on the sample of the volunteers obtained during human trials. Since, this nature of activity has to be carried out at different places, but the same is carried out by the appellant at Ahmedabad only.
Therefore, merely because of obtaining the blood samples of volunteers at different places such as Mumbai, Nadiad and Mehsana but the final study of the samples are carried out at Ahmedabad office, where the final analysis report is prepared. For all the activities, as regards the expenses, the Ahmedabad office only making the payment for those expenses. Therefore, all the activities carried out irrespective at different places such as Mumbai, Nadiad and Mehsana, but same are accounted for and carried out from Ahmedabad only. Therefore, there is no reason to deny the credit in the peculiar facts of the present case.
Centralized registration - Revenue's contention that the appellant have not obtained the centralised registration, for this reason Cenvat credit cannot be denied as held in catena of the judgments that for the purpose of availment of Cenvat credit registration is not prerequisite. The only criteria to allow the Cenvat credit on any input service is that the service should be used in or in relation to output service. The service should be tax paid. These criteria is not under dispute. The appellant have centralised accounting at Ahmedabad only. Therefore, even though the part of the activity are carried at different places but for all the activities of different places, the accounting is done at Ahmedabad office only. Therefore, in our considered view there seems to be no reason to deny the Cenvat credit.
This issue has been considered by this Tribunal in the case of Manipal Advertising Services Pvt Ltd [2009 (10) TMI 434 - CESTAT, BANGALORE] wherein the Tribunal held that if a person is discharging service tax liabilities from his registered premises, the benefits of Cenvat Credit on the service tax paid by the service providers cannot be denied to the assesse only on the ground that the said services are in the name of branch offices. There is no dispute that the branch offices are not registered with the Service Tax Authorities and they are not discharging service tax liabilities.
Since, the entire service tax liabilities is of Ahmedabad office, all the activities irrespective carried out at different places, are ultimately attributed to the Ahmedabad office only. Therefore, availment of Cenvat credit at Ahmedabad is absolutely in order and as per the law.
Even though there is no centralised registration at Ahmedabad office but on the fact that all the services even if received at branch offices for same is attributed to the final output service of Ahmedabad. Therefore, in our considered view the Cenvat credit is admissible to the appellant.
Demand on account of difference of taxable income as appearing in the profit and loss account, vis-a-vis taxable value declared in the half yearly ST-3 return - As we find that firstly, merely on the basis of difference between the ST-3 return and books of accounts, the confirmation of demand is not sustainable unless until the Revenue establish that the difference is on account of any service and the nature of service if any performed. Therefore, on this ground itself, the demand of Rs. 1,50,829/- is not sustainable. Further we find that the appellant have provided the reconciliation statement, according to which the appellant paid service tax on the excess amount coming after the reconciliation. Therefore, there is no short payment of service tax. We have perused the reconciliation statement as Annexed-2 of the appeal memo. Accordingly, on this count also demand is not sustainable.
We place reliance on the decision in the case of Chartered Logistics Ltd [2023 (7) TMI 770 - CESTAT AHMEDABAD] dealing with the situation where there is a demand on difference of value shown in books of accounts and ST-3 return.
Merely on the difference between the value mentioned in books of accounts and ST-3 returns, demand of service tax cannot be confirmed.
Demand on the premise of totaling mistake and short payment of service tax to that extent - We find that the appellant have provided the explanation before the first Appellate Authority and as per the statement in Annexed at page No. 19 of the appeal it clearly shows that the appellant have correctly paid service tax on the taxable service and there is no calculation mistake as alleged by the revenue. Therefore, on this ground also the demand is not sustainable.
Demand on the basis of debit notes issued by Wockhardt Ltd the allegation of the department is that the appellant could not provide the proof of payment of service tax to the Government Exchequer. We find that the appellant have submitted that they have paid the service tax during the year 2019 and produced the documents evidence in that respect.
We fail to understand that despite giving this documentary evidence which clearly show the payment of service tax, the Learned Commissioner (Appeals) for no reason discarded such documentary evidence, only on the basis that the same unsigned. It is the submission of the appellant that though they did not pay the service tax immediately upon issuance of debit notes in the month of July,2008. Since, the appellant have received money subsequently from Wockhardt Ltd., thereafter they paid the service tax with the department at the time of receipt of amount. I am convinced with the submission of the appellant which is supported by the documentary evidence. Therefore there was no reason for Learned Commissioner (Appeals) to uphold the demand. Hence, the same is not sustainable.
Invoking extented period of Limitation - We find that the period involved for the present matter is 2008-09 and the show cause notice has been issued on 22.10.2013. Hence, the entire demand is under extended period. In this regard we find that the appellant obtained service tax registration and the department had conducted various audits from the date of registration. The entire data on the basis of which the service tax demand was raised in the present case were retrieved from the existing books of accounts of the appellant. Therefore, there is no suppression of fact or any mala fide intention with intend to evade payment of duty on the part of the appellant. Therefore, in the facts of the present case also hold that the demand is not sustainable on the ground of limitation also.
The demands are not sustainable on merit as well as on limitation.
-
2024 (11) TMI 990
Refund claim filled by service receiver - jurisdiction of Mumbai Service Tax authority or Kolkata Service Tax authority to deal with the refund application of the appellant - action of the Deputy Commissioner in returning the refund claimed filed by the Appellants, in terms of Section 103 of Finance Act 1994, as inserted by the Section 159 of the Finance Act, 2016 -
Difference of opinion among members of bench - difference of opinion between learned Member (Technical) and learned Member (Judicial) on the findings pertaining to jurisdiction of Mumbai Service Tax authority or Kolkata Service Tax authority to deal with the refund application of the appellant, filed in terms of Section 103 of the Finance Act, 1994.
Appellants have challenged this action, arguing that since the appellant was registered in the jurisdiction of Deputy Commissioner, Division 9, Service Tax VII, thus they had rightly filed the refund claim in the jurisdiction where they were registered for payment of service tax - Whether the Deputy Commissioner, Division-9, Service Tax-VII, action in returning the refund claim that has been upheld by the Commissioner (Appeals) is to be upheld by the CESTAT as opined by Member (Technical) or is to be set aside as opined by Member (Judicial)?
HELD THAT:- In the present case, due to non-obstante clause in Section 103 (1) of the Act of 1994, the charge of service tax itself and the assessment, if any, stands nullified by the legislated Act of the Parliament and thus, there is no need of ascertaining the fact, as to who would be considered as the jurisdictional proper officer for grant the refund of the service tax amount. In fact, Section 103(2) of the Act of 1994 mandates that refund shall be made of all such service tax, which has been collected, but which would have not been so collected, had sub-section (1) been in full force at all times.
Section 103 of the Act of 1994 is a complete code in itself and it does not mandate for filing of the refund claim at any specified jurisdiction. Once it is admitted that the recipient of the service is eligible to file refund claim, it is beyond the mandate of the law to insist that such claim should be filed with the proper officer, having jurisdiction over the service provider. Section 103(3) of the Act of 1994 also starts with a non-obstante clause and puts only condition that the refund application should be filed within six months. Thus, there is no other condition imposed, as to the specific officer, before whom the refund claim should be filed with.
The appellants in the present case have filed their refund claim before their own jurisdictional Service Tax divisional office, where they used to file the service tax returns. Even Section 11B of the Act of 1944, which has been strongly relied upon in the Interim Order, also does not mandate that the claim should be filed before the service provider's jurisdictional officer alone.
In fact, the principle laid down in Canon India [2021 (3) TMI 384 - SUPREME COURT] would support the appellant's case inasmuch as in the event of any erroneous grant of refund, the proper officer to issue the show cause notice for recovery of such erroneously granted refund would be the jurisdictional officer at the appellant’s end, and not the jurisdictional officer at the service provider’s end.
Thus, as per the reasoning given by the Hon'ble Member (Technical), the jurisdictional officer of the service provider will not have even geographical jurisdiction to issue any show cause notice to the appellants herein. Therefore, the expression ‘the assessing officer’, in the present case, would mean the jurisdictional officer of the appellants, and not that of the service provider. In any case, the appellants would not have any locus standi to file their refund claim before the jurisdictional officer of the service provider, as they are not registered in that jurisdiction.
In the present case, interpretation of the provisions of Section 27 (supra) is not in question and there is no dispute that the appellants have filed the refund claim within 6 months of the Presidential assent to Section 103 of the Act of 1994 and as such, is within the schedule time frame. Thus, recourse cannot be had to the provisions of 1872 Act or the 1963 Act.
The appellant's right to seek refund arose out of an act of the Parliament, by way of granting retrospective exemption, which overrides all assessments and hence, there is no question or need for seeking any re-assessment.
In paragraph 4.32 of the Interim Order, learned Member (Technical) has observed that Section 103 of the Act of 1994 or Section 11B of the Act of 1944, did not permit for filing of the refund claim in multiple jurisdictions. In the present case, it is not the case of the appellants that they wanted to file the claim in multiple jurisdictions. The appellants have in fact, filed the refund claim application only with their jurisdictional officer.
Therefore, this finding is of no relevance in the present context. In fact at the end of this paragraph, it is stated that we have no hesitation in agreeing to the observations made by the Tribunal to the effect that both the jurisdictions cannot refuse to entertain the refund claim filed by the recipient of service. If this be so, then the appellants are correct in filing the claim with their own jurisdiction. It is also stated in the said paragraph that filing of claim in multiple jurisdictions, will amount to double benefit in respect of the same transaction. In the present case, the appellants have filed the claim only in one jurisdiction and in any case, it is not the case of Revenue or of the Adjudicating or First Appellate Authority that the appellants is taking double benefit. Such a remark is unwarranted in the present case.
Thus, in agreement with the learned Member (Judicial) that the impugned order is required to be set aside and the appellants should be entitled to get the refund at Mumbai.
In view of the majority opinion, the impugned order is set aside and the appeal is allowed in favour of the appellants.
-
2024 (11) TMI 926
Valuation of accommodation provided by the appellant to CISF personnel -Short payment of service tax - appellant was availing security service from Central Industrial Security Force (CISF) for which they were paying service tax on the reverse charge mechanism on security service on net value paid to the CISF - case of the department is that intrinsic value of the house rent in respect of accommodation provided to the CISF personnel should be added in the gross value of security service
HELD THAT:- Issue is no longer res-integra as relying on Bharat Coking Coal Ltd [2021 (9) TMI 23 - CESTAT KOLKATA] and NTPC LTD VERSUS COMMISSIONER OF C. E-BHARUCH [2024 (10) TMI 1130 - CESTAT AHMEDABAD] - Hence the intrinsic value of the rent for the accommodation provided by the appellant to the service provider M/s CISF is not includible in the gross value of security service, therefore, demand thereon is not sustainable. Hence, the impugned order is set aside. Appeal is allowed.
-
2024 (11) TMI 925
Liability to pay service tax - services provided to a foreign entity - as argued turnover undertaken within the domestic market was less than the threshold limit, therefore, they were not required to pay any Service Tax - Adjudicating authority dropped part of the demand and confirmed the Service Tax demand along with interest and penalty - HELD THAT:- As in case of ‘Business Auxiliary Services’/’Business Support Services’ they would fall under the category of 3(1)(iii). As per the provisions under Rule 3(1)(iii)of the Export of Services Rules 2005, so long as the services are provided to an entity situated abroad, the same would be exempted from payment of Excise Duty, provided the consideration is received in convertible foreign exchange. The clarification given by the Board Circular echoes the same view.
In the present case, both the facts as to whether the service has been rendered to a foreign entity or not and as to whether the appellant has received the proceeds in convertible foreign exchange or not, are not under dispute. Therefore, we find force in the Appellant’s arguments that no Service Tax is required to be paid. Accordingly, we set aside the confirmed demand given the Table A above.
Demand in respect of ‘Erection, Commissioning and Installation Services’ - As observed Appellant’s turnover during the period 2008-09 to 2011-12 was much below the threshold limit. Hence no Service Tax is required to be paid by them for the period 2008-09 to 2011-12. In respect of ‘Erection, Commissioning and Installation Services’ taken up during the period 2012-13, the Appellant is required to pay the Service Tax. It is found from the records that the Appellant has already paid Rs.1,44,381/- along with interest of Rs.18,172/- on 26.08.2013, which is more than the Service Tax payable if the threshold exemption of Rs.10,00,000 is considered for the period 2012-13. Therefore, we hold that the Appellant has already paid Service Tax where it is payable. Accordingly, we set aside the confirmed demand of Rs.2,75,420/- on merits.
Invoking extended period of limitation - We find that the Appellant has declared of their foreign exchange earnings in the Balance Sheet. They are also assessed under Service Tax registration and have been filing ST-3 Returns. The Department has not made out any specific case of suppression on the part of the Appellant. Therefore, the confirmed demand in respect of the extended period is set aside on account of time bar also.
-
2024 (11) TMI 924
Valuation of taxable services for charging service tax - Benefit of partial reverse charge and cum-tax value - Eligibility for threshold exemption - HELD THAT:- From the plain reading of the sub section (2) & (3) it is evident that gross amount received for the taxable service by the service provider is inclusive of the service tax payable. Emphasis is on the phrase “payable” used in the sub section (2). The use of word “payable” raises the presumption in the favour of appellant. No agreement has been relied upon in the present case the demand has been made on the basis of the third party information received from the income tax department
As demand need to be recomputed by treating the gross amount received by the appellant as inclusive of service tax payable in terms of Section 67 (2) of the Finance Act, 1994.
As regards the impugned order whereby the benefit on threshold exemption has been sought to be denied. We do not find anything on record to show that the said exemption under Notification No.33/2012 was available to the Appellant.
Appeal is partly allowed to the extent that the taxable value should be computed treating the amounts received from the service recipient to be cum-tax price as per the Section 67(2) of the Finance Act, 1994. Original Authority should re-compute the demand after allowing the said benefit.
-
2024 (11) TMI 923
Dismissal of appeal as time barred - Time limitation for filing appeal during the Covid 19 outbreak - Non depicting correct value of the services provided in their ST-3 returns filed - information received from Income Tax Department - HELD THAT:- The appeal has been filed before the first Appellate Authority beyond the period of limitation as per the order of Hon’ble Supreme Court dated 10.01.2022 where the period of limitation have been stated as Ninety days from 01.03.2022 the said decision of Hon’ble Supreme Court was consequence of the COVID-19 outbreak.
In the said decision taking note of the pandemic conditions, Hon’ble Supreme Court has directed that for period of pandemic, the limitation filed for filing the appeal shall be 90 days from 01.03.2022.
As this decision was made in exceptional circumstances, it was setting the period of limitation in absolute terms without any power to the authorities to further condone the delay. Or more appropriately said the Hon’ble Supreme Court had condoned the delay in filing the appeals during the period of pandemic by setting the time limit for filing the appeals within 90 days from the 01.03.2022.
Thus the impugned order rightly observed that the appeal was filed before the Commissioner (Appeals) beyond the prescribed period of limitation and he was not having the powers to condone the delay as per the order of Hon’ble Apex Court prescribing the period of limitation of 90 days from 01.03.2022.
As observed that the total amount of disputed service tax in the present appeal is only Rs.1,41,610/-. In terms of second proviso to Section 35B(1) as the amount involved is less than Rs.2 lakhs, thus find that this appeal need not be admitted for consideration as no substantial question of law is involved in relation to rate of duty etc., is involved.
-
2024 (11) TMI 922
Classification of services rendered - services rendered by the respondent to their parent company situated in USA is an ‘intermediary service’ or 'export services’ - HELD THAT:- The basic requirement to be an intermediary is that there should be at least three parties; an intermediary is someone who arranges or facilitates the supply of goods or services or securities between two or more persons. There is main supply and the role of the intermediary is to arrange or facilitate another supply between two or more other persons and, does not himself provide the main supply.
The present case is more or less similar to the Illustration 4 of the said Circular dated 20.09.2021 which says 'A' is a manufacturer and supplier of computers based in USA and supplies its goods all over the world. As a part of this supply, 'A' is also required to provide customer care service to its customers to address their queries and complains related to the said supply of computers. 'A' decides to outsource the task of providing customer care services to a BPO firm, 'B'. 'B' provides customer care service to 'A' by interacting with the customers of 'A' and addressing / processing their queries / complains. 'B' charges 'A' for this service. 'B' is involved in supply of main service 'customer care service' to 'A', and therefore, "B' is not an intermediary.
No merit in the appeal filed by the Revenue.
-
2024 (11) TMI 921
Demand of Service Tax and penalties - appellant and SAIL appellant has been appointed as the authorized dealer for sale of GP Coils/GP Sheets - whether the activity carried on by the appellant falls under the business auxiliary service as defined in Section 65 (19) of the Finance Act? - whether the appellant can be called Commission Agent rendering business auxiliary service?
HELD THAT:- The goods are purchased from SAIL for which the appellant pays to SAIL on its own account as an owner of the said goods. The appellant is also registered with VAT/Sales Tax during the relevant period and has been paying VAT/Sales Tax. The Transaction between SAIL and the appellant dealer was on principal to principal basis and the discount of 1.5% was an incentive for lifting the specified quantity of 300 MTs per month.
We also find that this issue has been examined by the Tribunal in various cases relied upon by the appellant cited (Supra). We also find that recently the Tribunal of Mumbai, in the case of My Car (Pune) Pvt. Ltd. [2023 (6) TMI 995 - CESTAT MUMBAI] held that Department does not dispute that there was such agreements, scheme between the appellant in the car manufacturers and the account of the appellant only reflect the actual discount allowed to them.
Department's argument is that the said discount/commission is in view of services rendered by the appellant by way of popularisation of the sales and consumption of the products by the end customer. We find it difficult to accept the conclusion arrived at in the impugned order that all the discounts/commission/incentives given by the manufacturer for the various types of targets achieved in terms of the number of vehicles sold under a particular model/category, consistent achievement of targets by each quarter, exchange bonus etc., are to be treated as compensation for the services rendered by the appellants by way of popularization of sales and purchase of the cars of the manufacturer.
The element of sales promotion or marketing services is involved only when the appellants provide some service to the end customer in sale of the cars. If the discounts/commission/incentives are given in terms of the specific schemes or an agreement entered by the manufacturer of car with the appellants, then such transaction cannot be overstretched to categorize it as service for the purpose of charging service tax.
Also assessed respondent is the authorized dealer of car manufactured by MUL and are getting certain incentives in respect of sale target set out by the manufacturer. These targets are as per the circular issued by MUL. Hence these cannot be treated as business auxiliary service.
In respect of sales/target incentive, the Revenue wants to tax this activity under the category of business auxiliary service. We have gone through the circular issued by MUL which provides certain incentives in respect of cars sold by the assessee-respondent. These incentives are in the form of trade discount. In these circumstances, we find no infirmity in the adjudication order whereby the adjudicating authority dropped the demand.
-
2024 (11) TMI 830
Recovery of CENVAT Credit erroneously refunded alongwith interest - penalty for ineligible availment of CENVAT Credit - HELD THAT:- It is stated at the bar pursuant to the direction issued by the High Court, the refund amount has been released to the respondent.
No reason to entertain this Special Leave Petition. Hence, the Special Leave Petition is dismissed.
-
2024 (11) TMI 829
Order travelled far beyond the show cause notice - Service tax demand along with interest and equal amount as penalty u/s 78 of the Finance Act - there was no proposal to demand service tax under “works contract service" in the SCN and Demand was proposed under “commercial and industrial construction service"
HELD THAT:- The undisputed facts are that the appellant had entered into contracts for providing services along with the materials, and therefore all their contracts were in the nature of works contracts. This fact was also noted in the Tribunal's order in the first round of litigation.
The impugned order also does not dispute this fact. It is for this reason, that in the impugned order the Commissioner set aside the demand for the period prior to 1st June, 2007 following the judgement of the Supreme Court in Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]
Commissioner confirmed the demand for the period after 1st June, 2007 under the head “works contract service". There was no proposal to demand tax in the SCN under this head, nor has the appellant been given an opportunity to defend itself against tax liability under this head. Therefore, as the impugned order clearly travelled beyond the SCN it needs to be set aside on this ground alone. It is a well-settled legal position that any order which travels beyond the scope of the show cause notice cannot be sustained. Appeal allowed.
........
|
9911796707
