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Service Tax - Case Laws
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2025 (3) TMI 573
Classification of service - export of service or an intermediary service? - services provided by the appellant to overseas educational universities/colleges - HELD THAT:- The appellant is rendering services to foreign universities/colleges and is getting commission when the students get admission. Further, the services rendered by the appellant comply with the conditions prescribed under Rule 6A ibid which lays down the criteria for determining whether a service is an ‘export of service’ or not.
An identical issue has been considered by the Chandigarh Bench of the Tribunal in the case of M/s Sunrise Immigration Consultants Private Limited [2018 (5) TMI 1417 - CESTAT CHANDIGARH] wherein the Tribunal has held that the service provided by the appellant who is providing services of referral for foreign universities is an ‘export of service’ not an ‘intermediary service’.
Conclusion - The services provided directly to a foreign recipient, with payment in foreign exchange and meeting the conditions of Rule 6A, qualify as export services. The services do not qualify as intermediary services when the service provider acts on its own account.
Appeal allowed.
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2025 (3) TMI 572
CENVAT Credit - denial of credit on setting up of cement plant as ‘irregular’ on the ground that the expression “setting up” has been omitted from the definition of “input service” w.e.f. 01.04.2011 - credit availed on the basis of Debit Notes for rent (reimbursement of electricity charges) under Rule 4A of the Service Tax Rules, 1994 - demand of service tax given the appellant's claim of having already paid the amount - levy of interest and penalty.
Whether the appellant is eligible for the availment of CENVAT Credit of Rs.57,68,603/- on input services used in setting up a cement plant, given the removal of the term "setting up" from the definition of "input service" effective 01.04.2011? - HELD THAT:- This amount has been confirmed in the impugned order by denying the CENVAT Credit availed by the appellant on the input services used setting up of cement plant, on the ground that the words “setting up” have been removed from the definition of “input service” w.e.f. 01.04.2011. However, the appellant has not availed credit in respect of civil works undertaken by them for setting up of the plant. They have only availed the credit in respect of services such as banking and other financial services, management, maintenance and repair services, rent-a-cab services, GTA services, legal consultancy services, erection, commissioning and installation services, etc., which are all “input services” in terms of Rule 2(l) of the CENVAT Credit Rules, 2004. Thus, the appellant is eligible to avail CENVAT Credit in respect of the above said services - the denial of CENVAT Credit on the input services used in setting up of the plant, is not sustainable.
Whether the appellant is entitled to the CENVAT Credit of Rs.32,557/- availed on the basis of Debit Notes for rent (reimbursement of electricity charges) under Rule 4A of the Service Tax Rules, 1994? - HELD THAT:- The appellant have already paid Service Tax of Rs.2,34,520/- and enclosed a Chartered Accountant certificate to that effect. Regarding the balance amount of Rs.32,557/-, the appellant submitted that they have availed Cenvat credit of Rs.32,557/- on Debit Notes for rent ( reimbursement of electricity charges). The Debit Notes contain all details as prescribed under Rule 4A of Service Tax Rules, 1994. Accordingly, the Cenvat credit availed by the appellant on the basis of ‘Debit Notes’ cannot be denied - the appellant are eligible for the availment of the balance CENVAT Credit to the extent of Rs.32,557/-.
Whether the demand of Service Tax of Rs.85,692/- is sustainable given the appellant's claim of having already paid the amount? - HELD THAT:- The same has already been paid by the appellant and therefore, the same is appropriated against the demand confirmed. No penalty is imposable on the appellant on this count.
Whether the demand for interest amounting to Rs.24,88,246/- is justified when the appellant had an excess CENVAT Credit balance? - HELD THAT:- The appellant was having sufficient balance in their CENVAT Credit account. Further, we observe that the service tax demand confirmed in the impugned order is not sustained. Accordingly, the demand of interest confirmed in the impugned order is not sustainable. Thus, the demand of interest of Rs.24,88,246/- confirmed in the impugned order set aside.
Whether the imposition of a penalty of Rs.61,21,372/- under Section 78 of the Finance Act, 1994, is warranted? - HELD THAT:- Since the demands confirmed in the impugned order are not sustainable, no penalty is imposable on the appellant. Accordingly, the penalty of Rs.61,21,372/- imposed in the impugned order under Section 78 of the Finance Act, 1994 is set aside.
Conclusion - i) The appellant is eligible for the CENVAT Credit of Rs.57,68,603/- availed in respect of setting up of the cement plant. ii) The demand of Rs. 2,34,520/-, being already paid by the appellant, is upheld and appropriated. The balance amount of credit of Rs.32,557/- availed on the basis of debit notes is held as eligible and accordingly, the demand to this extent is set aside. iii) Regarding the demand of Rs.85,692/-, the amount being paid by the appellant, is appropriated against the liability confirmed. iv) The demand of interest of Rs.24,88,246/- is set aside. v) No penalty is imposable on the appellant.
Appeal disposed off.
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2025 (3) TMI 571
Exemption from payment of service tax - Government Construction Contracts entered into after 01.03.2015 - demand for service tax based on the income reflected in Form 26AS and Income Tax Returns - computation of service tax liability was correctly assessed for the period in question or not - extended period of limitation.
Exemption from payment of service tax - Government Construction Contracts entered into after 01.03.2015 - Whether in view of Notification No. 06/2015 dated 01.03.2015, the exemption was withdrawn with prospective effect, hence, benefit of Entry 12 in terms of Notification No.25/2012-ST dated 20.06.2012, cannot be extended to the appellant? - HELD THAT:- The Ld. adjudicating authority observed that the appellant has availed the benefit of exemption available to construction services rendered to Government under Notification No. 06/2015 dated 01.03.2015, however the said exemption was withdrawn with prospective effect and hence, the benefit of Entry 12 in terms of Notification No.25/2012-ST dated 20.06.2012, cannot be extended to the appellant. However, it is found that the appellant has received the consideration for the contracts entered prior to 15.03.2015 also during the period under dispute, but the adjudicating authority has not allowed the exemption available to them and considered the entire amount as taxable value received during the period under dispute, which is legally not sustainable.
Whether the demand for service tax based on the income reflected in Form 26AS and Income Tax Returns is legally sustainable without corroborative evidence linking the income to taxable services? - HELD THAT:- The Ld. adjudicating authority has construed all the receipts during the period as amount received in connection with taxable supplies during the said period. However, it is observed that the Learned Adjudicating Authority failed to appreciate that such amounts reflect merely the payment received during the period. It cannot be construed as outward supplies since such amount could have been received in lieu of contracts which were entered into prior to 01.03.2015 against which payments were released as and when portion of the works under contract was being completed. The Department cannot straightaway take in account the amount shown in the ITR for the purpose of demanding Service Tax, without verifying the nature of such amount received, as to arrive at a conclusion whether service tax is payable on the said amount or not. In support of this view, reliance placed upon the decision of this Tribunal, in the case of M/s Piyush Sharma vs. Commissioner of CGST & CX, Patna – I [2023 (10) TMI 736 - CESTAT KOLKATA], wherein it has been held 'Admittedly, no investigation has been conducted in this case at the end of the Appellant by the Adjudicating Authority. Being the appellant a registered service provider and filing their service tax returns, in that circumstance, the demand cannot be raised on the basis of Form 26AS obtained from the Income Tax Department.'
Whether the computation of service tax liability was correctly assessed for the period in question? - HELD THAT:- For the purpose of computation of their service tax liability for the financial year 2017-18 (till June, 2017), the Learned Adjudicating Authority has taken the entire amount received by the Appellant during the period April 2017 to March 2018, as per 26AS as the taxable value, whereas, service tax was leviable only for the 1st quarter of the FY 2017-18 i.e. from April, 2017 to June 2017. Thus, the submission of the appellant is agreed upon that the computation of taxable value for the Financial Year 2017-18 is erroneous.
Whether the invocation of the extended period of limitation for demanding service tax is justified? - HELD THAT:- The Show Cause Notice was issued on the basis of materials available on record, ie, from the returns furnished by the appellant and not on account of any discovery of new facts by the department. Hence, the entire demand confirmed by invoking extended period of limitation is not sustainable.
Conclusion - i) The appellant has received the consideration for the contracts entered prior to 15.03.2015, the benefit of exemption cannot be denied. ii) The demands cannot be confirmed solely on data from Income Tax Returns/26AS without establishing that the amounts relate to taxable services. iii) There are errors in the computation of service tax liability, as the adjudicating authority considered the entire amount received during April 2017 to March 2018 as taxable, whereas service tax was applicable only for April to June 2017. iv) The entire demand confirmed by invoking extended period of limitation is not sustainable.
Appeal allowed.
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2025 (3) TMI 570
Valuation of services - inclusion of expenses incurred for stationary, reimbursed by electricity authorities - Section 67 of the Finance Act, 1994 - exemption from service tax under N/N. 45/2010-ST - Business Auxiliary Service - Extended period of limitation.
Includability of reimbursed expenses - HELD THAT:- The issue of includability of reimbursed expenses, incurred in the course of provision of service, has been decided by the Hon’ble Apex Court in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT]. Hon’ble Apex Court held that 'Sub-section (4) of Section 67 empowers the rule making authority to lay down the manner in which value of taxable service is to be determined. However, Section 67(4) is expressly made subject to the provisions of sub-section (1). Mandate of sub-section (1) of Section 67 is manifest, as noted above, viz., the service tax is to be paid only on the services actually provided by the service provider.'
There are no doubt, whatsoever, that the issue is squarely covered in favour of the appellants. Further, as the appellants are not agitating the taxability of the service, we are not going into the exigibility of the service. There was no infirmity in the non-inclusion of the value of the stationary reimbursed by the electricity authorities.
Invocation of extended period of limitation - HELD THAT:- The Department has not made out any case for invocation of extended period. In view of the same, the issue is settled in favour of the appellants.
Conclusion - i) The reimbursed expenses are not part of the assessable value for service tax purposes. ii) The Department has not made out any case for invocation of extended period.
Appeal allowed.
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2025 (3) TMI 509
Classification of services - Dredging Services - Penalty - The CESTAT allowed the appeal in favor of appellant and the demand was set aside - HELD THAT:- In view of the decision of this Court in the case of Commissioner, Customs, Central Excise and Service Tax, Patna vs. Shapoorji Pallonji and Company Private Limited & Ors. [2023 (10) TMI 748 - SUPREME COURT], it is found that there is no error in the view taken by the Customs, Excise and Service Tax Appellate Tribunal.
Appeal dismissed.
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2025 (3) TMI 508
Levy of service tax on the renting of immovable property - taxable service or not - HELD THAT:- The submissions in the appeal are that the renting of immovable property cannot be considered as a service and , therefore, no service tax could be levied by the Central Government - This argument cannot be accepted. Unless the levy of service tax on renting of immovable property service is held to be ultra vires by any constitutional court, it will continue to be a valid levy. As a creation of the law, this Tribunal has to follow the law and cannot go beyond its four corners. Further, levy of service tax on renting of immovable property was upheld by five different High Courts.
Conclusion - i) Unless the levy of service tax on renting of immovable property service is held to be ultra vires by any constitutional court, it will continue to be a valid levy. ii) The levy of service tax on the renting of immovable property service by the appellant needs to be upheld. Consequently, the appropriate amount of interest has to be paid. The Commissioner (Appeals) has already set aside the penalty under section 78 in the impugned order but upheld the penalty of Rs. 10,000/- under section 77 of the Finance Act.
The impugned order is upheld and the appeal is dismissed.
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2025 (3) TMI 507
Levy of VAT/sales tax - supply of tangible goods service or not - demand based on DG sets supplied on lease by the appellant to IOCL and the DG sets sold by the appellant to its customers - contracts involving the sale of DG sets, along with their installation and commissioning by the appellant - works contract service or not - demand based on an assumed 25% growth in service tax liability under the head of works contract service.
Whether the supply of DG sets by the appellant to Indian Oil Corporation Limited (IOCL) constitutes a "supply of tangible goods service" under section 65 (105)(zzzzj) of the Finance Act, 1994, or a deemed sale under Article 366(29A) of the Constitution of India, thereby subject to VAT/sales tax rather than service tax? - HELD THAT:- The Supreme Court had held in the case of State of Madras vs. Ganon Dunkerly & Company Limited [1958 (4) TMI 42 - SUPREME COURT] held that the State Government’s had no power to levy sales tax on deemed sales considering the value of the goods used in works contract. Thereafter, the Constitution of India was amended and a new clause (29A) was inserted in Article 366(definition clause of the Constitution). This clause 29A enlarged the scope of expression “sale and purchase of goods” to include goods used in works contract service and also goods which are supplied on lease giving effective possession and control to the transferee.
In 1994 the Central Government, in exercise of the powers under entry 97 (residual entry) of list-1, imposed service tax. The service tax could be imposed under this entry only on such activities which did not fall under the State list. Since the supply of tangible goods by giving effective possession and control is deemed to be a sale as per Article 366 (29A), all such transfers are chargeable to sales tax/ VAT by the State Government - However, where the goods are leased without giving effective possession and control of the goods to the transferee, it was covered under the service tax under section 65 (105)(zzzzd). Thus, there are two types of lease contracts-where the effective possession and control is given to the transferee and VAT/ sales tax is payable and where there is no effective possession and control to the transferee and service tax is chargeable.
It is found that only VAT could have been charged by the State Government on the DG sets supplied by the appellant to IOCL. No service tax under section 65 (105)(zzzzd) could have been charged. Therefore, the demand in the first show cause notice cannot be sustained and needs to be set aside.
Whether the contracts involving the sale of DG sets, along with their installation and commissioning by the appellant, amount to "works contract service" subject to service tax? - The pre-dominant nature of the contract is that of sale of DG set. When a large equipment such as DG set is purchased, the customer naturally wants the seller to install and commission it so to necessary to ensure that the DG sets were in working order. Merely because the goods were installed and commissioned after sale, the contract would not become a works contract services. It is more or less like a refrigerator or air-conditioner bought by someone for home use. The seller sells the refrigerator and also delivers and installs which satisfies the buyer that it is in good working condition. Therefore, the demand of service tax on the sale of generators by treating them as “works contracts” merely because the generators were also installed and commissioned by the appellant cannot be sustained and is liable to be set aside.
Validity of the statement of demand based on an assumed 25% growth in service tax liability under the head of "works contract service" - HELD THAT:- Since it is found that in favour of the assessee and against the Revenue on the demand of service tax on the DG sets sold, this demand also needs to be set aside.
Conclusion - i) The demand for service tax under "supply of tangible goods service" was set aside, recognizing the transaction as a deemed sale. ii) The demand for service tax under "works contract service" was set aside, affirming the transaction as a sale with incidental installation. iii) The statement of demand based on assumed growth was set aside due to lack of evidence.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 506
Valuation of service tax - non-inclusion of reimbursable expenditure or costs incurred by the service provider while providing taxable service, in the value of such taxable services, for the purpose of charging service tax - Extended period of limitation.
HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants & Technocrats Pvt Ltd v UOI, [2012 (12) TMI 150 - DELHI HIGH COURT], wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections.
Extended period of limitation - HELD THAT:- There are force in the contentions of the learned consultant for the appellant that the issue involved was of interpretational nature pertaining to the Valuation Rules and no evidence of malafides has been adduced that would attract the extended period of limitation or warrant imposition of penalties.
Conclusion - The reimbursable expenses incurred in providing services should not be included in the taxable value unless explicitly mandated by statutory provisions, which was only applicable post-May 14, 2015.
The impugned orders in appeal are set aside and the appeals are allowed.
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2025 (3) TMI 505
Abatement given by N/N. 01/2006 to be included for the purposes of calculation of threshold limit for availing small-scale exemption under N/N. 06/2005 dated 01.03.2005 - HELD THAT:- This Bench has decided the issue in respect of similarly placed appellants vide Final Order No.60311-60317/2023 dated 30.08.2023 [2023 (9) TMI 1254 - CESTAT CHANDIGARH]. The Bench observed that 'the gross value of the taxable service rendered by each of the appellants is less than the threshold limit of Rs.10 Lakhs as prescribed under Notification No.06/2005-ST dated 01.03.2005 after giving allowance to the exemption for 60% of the gross receipt in terms of Notification No.01/2006-ST dated 01.03.2006.'
While computing the threshold exemption limit under N/N. 06/2005 dated 01.03.2005, abatement available under N/N.01/2006 should not be included for arriving at gross value of service. In view of the same, all the impugned orders are liable to be set aside except the one in the case of Shri Surjit Khan wherein some duty liability arises even after excluding the abatement of 60%.
Conclusion - The abatement under N/N. 01/2006 should not be included in calculating the threshold limit for the small-scale exemption under N/N. 06/2005.
Appeal allowed in part.
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2025 (3) TMI 504
Liability to pay service Tax during the period 1.7.04 to 9.9.04 and 10.9.04 to 15.6.05 - invocation of extended period or not - HELD THAT:- Hon’ble Supreme Court in Sunwin Technosolutions Pvt Ltd [2010 (9) TMI 71 - SUPREME COURT] held that 'the Central Government was fully conscious of the fact that the said computer training institute should not get the exemption and intended the same to be shown by specifically excluding the same from the purview of the notification dated 10th September, 2004. The notification was also in operation from the date of its issuance, i.e., from 10-9-2004 to 15-6-2005 without there being any other intendment.'
Hon’ble Supreme Court made it abundantly clear that there is no doubt as to the taxability of Computer Coaching and Training Institutes during the period 10.09.2004 to 15.06.2005. Further, it is found that the Hon’ble Supreme Court has interpreted the legislative intent behind the Notification in no uncertain terms. This being so, it is not inclined to buy the argument of the appellants that while interpreting the notification, intention of the government is not required to be ascertained; an amendment cannot confirm a retrospective applicability and create a liability which did not exists before. In the case cited above, Hon’ble Apex Court has decided the very same issue being agitated by the appellant. Therefore, reliance on other cases is of no avail. The Appellants have not made out any case as far as the merits of the case are concerned.
Time limitation - HELD THAT:- There is a considerable force in the argument of the appellant on limitation and is supported by finding of the Learned Commissioner (Appeals). The department has not filed any appeal against this finding giving cogent reason and evidence. Therefore, the contention of the Revenue is not tenable and revenue is not free to raise this issue now. In the facts and circumstances of the case, the cases relied upon by the department are not applicable. The appellant has a strong case in their favour on limitation.
Conclusion - While the appellants were liable for service tax for the period from 10.9.04 to 15.6.05, they succeeded on the issue of limitation, thus nullifying the extended period for demand.
Appeal allowed on limitation.
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2025 (3) TMI 503
Adjournment of matter beyond three times which is the maximum number statutorily provided - HELD THAT:- In case of Ishwar lal Mali Rathod [2021 (9) TMI 1301 - SUPREME COURT] condemning the practice of adjournments sought mechanically and allowed by the Courts/Tribunal’s Hon’ble Supreme Court has observed 'considering the fact that in the present case ten times adjournments were given between 2015 to 2019 and twice the orders were passed granting time for cross examination as a last chance and that too at one point of time even a cost was also imposed and even thereafter also when lastly the High Court passed an order with extending the time it was specifically mentioned that no further time shall be extended and/or granted still the petitioner – defendant never availed of the liberty and the grace shown. In fact it can be said that the petitioner – defendant misused the liberty and the grace shown by the court. It is reported that as such now even the main suit has been disposed of.'
There are no justification for adjourning the matter beyond three times which is the maximum number statutorily provided - The Appeal is dismissed for non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982.
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2025 (3) TMI 502
Non/short-payment of service tax to the Government - Appellant had received amounts on account of provisions of services but failed to pay service tax - exemption of service tax under 'Charitable purpose' - recovery of service tax with interest and penalty - HELD THAT:- Section 12 AA read with section 12 A of the Income Tax Act provides for process of registration of a trust or institution, where income derived from the property etc. held under trust, is wholly meant for charitable or religious purposes, wherein exemption from income tax is available, subject to certain conditions - Further, ‘charitable purpose’ is defined under Section 2 (15) of the Income Tax Act – ‘Charitable purpose’ includes relief of the poor, education, yoga, medical relief, preservation of environment, etc. and the advancement of any other object of general public utility.
Further, in the facts of the case, it is admitted that the service tax has been provided for civil construction of school building or hospital building to a charitable institutions or Trust registered under Section 12 AA of the Income Tax Act and the said activities are covered under the definition of ‘Charitable Purpose’ under the Income Tax Act - The said activities are exempt under clause 2(k) of N/N.25/2012-ST.
Conclusion - The religious use includes providing of education, and medical aid, which reduces human suffering. Accordingly, the Appellant is entitled to exemption with respect to aforementioned works contract service provided to the Trusts registered under Section 12A/12AA of the Income Tax Act.
Demand with penalty set aside - appeal allowed.
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2025 (3) TMI 433
Refund of Service Tax paid - refund is denied only on the ground that there is no evidence to show whether Cenvat credit is availed by the KINFRA against the service tax paid by the appellant - HELD THAT:- It is appropriate for this Tribunal to remand the matter to adjudication authority to reconsider the issue on de-novo adjudication by verifying the documents produced by the appellants regarding non-availment of Cenvat credit by KINFRA against the service tax paid by the appellants. Appellants are directed to produce certificate regarding non availment of Cenvat credit by KINFRA from authorized Chartered Accountant of KINFRA and on verification of the same, adjudication Authority shall refund due amount with consequential relief if any in accordance with law.
Appeals are allowed by way of remand - Adjudication Authority is directed to consider the claim within 3 months from the date of receipt of the document from the appellants regarding non availment of the CENVAT credit by the KINFRA.
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2025 (3) TMI 432
Classification of services - Cleaning service or not - services in the nature of ‘upkeep/maintenance of platforms’, ‘dry sweeping of empty rakes and mechanized yard cleaning’, ‘railway platform cleaning’, ‘disposal of accumulated garbage to designated placed’, ‘on-board housekeeping service in reserved coaches of Poorva Express’ and ‘cleaning of Sonpur Railway Station platform and its surrounding area’, to the South Eastern Railways - exemption from Service Tax under Sl. No. 25 of N/N. 25/2012-S.T. dated 20.06.2012 - extended period of limitation - penalty.
Demand of Service Tax for the period up to 30.06.2012 - HELD THAT:- The 'cleaning activity' rendered is liable to Service Tax only if the same are rendered in respect of “commercial or industrial buildings and premises” or “factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises” which are all commercial in nature. However, we find that in this case, the services were rendered by the appellant to the Indian Railways, which is a Government of India Organisation. The Department of Railways cannot be called as a 'commercial concern' as its operations of passenger transportation of passengers in trains is meant for the welfare of the general public and it cannot be considered as an activity done with a profit motive. In these circumstances, the cleaning services rendered by the appellant cannot be held liable to Service Tax for the period up to 30.06.2012.
Tribunal in the case of R.K. Refreshment & Enterprises (P) Ltd. v. Commissioner of C.Ex., Raipur [2018 (2) TMI 1412 - CESTAT NEW DELHI], wherein it was held that 'The original authority gave a reason that railway coaches are either standing on platform or running on the track and the same are to be considered as object on the premises for Indian railway holding railway coaches and contracts constituents of capital assets and machinery of Indian railway, the original authority held cleaning of such railway coaches will be considered as cleaning of commercial premises. The coaches are rolling stock of railways. They are for transport mode and cannot fall under the commercial object of industrial building, factory, plant or machinery, etc. The interpretation of the original authority is far fetched and not sustainable in view of the plain meaning of the statutory definition for tax entry.'
The demand of Service Tax confirmed in the impugned order for the period up to 30.06.2012 under the category of “cleaning service” is not sustainable
Demand of Service Tax for the period after 01.07.2012 - HELD THAT:- The appellant has been rendering the said services to the Indian Railways and it is on record that they were in correspondence with the Indian Railways regarding their Service Tax liability. The Indian Railways had instructed that the services rendered to them are not liable to Service Tax, vide Circular dated 03.05.2013 and a letter dated 03.06.2013. Further, it is observed that when the Indian Railways asked the appellant to obtain registration under ‘works contract service’, they immediately took registration on 01.10.2013. Subsequently, when they came to know that Service Tax is not being paid by others who were undertaking similar businesses, they stopped paying Service Tax and filed ‘nil’ Return for the period from October 2014 to March 2015, by availing the benefit of Entry No.25 of Notification No. 25/2012-S.T. dated 20.06.2012. Thus, the appellant has always acted as per the direction of Indian Railways.
Eligibility of the exemption as provided under Entry No. 25 of N/N. 25/2012-S.T. dated 20.06.2012 - HELD THAT:- There is no dispute that the appellant has rendered the services namely, ‘upkeep/maintenance of platforms’, ‘dry sweeping of empty rakes and mechanized yard cleaning’, ‘railway platform cleaning’, ‘disposal of accumulated garbage to designated placed’, ‘on-board housekeeping service in reserved coaches of Poorva Express’ and ‘cleaning of Sonpur Railway Station platform and its surrounding area’ to a Government body viz. the Indian Railways. The services rendered by the appellant are in the nature of “public health, sanitation conservancy and solid waste management”. Entry No.25 of the Notification 25/2012-ST exempts all such services which are rendered to Government, as the same are otherwise exempted from service tax when rendered by a Municipality. Accordingly, we find that the services rendered by the appellant are squarely covered within the ambit of Sl. No. 25 of Notification No. 25/2012-S.T. dated 20.06.2012. The appellant has rightly claimed exempted under the above Notification for the services rendered to the Indian Railways.
Time limitation - Penalty - HELD THAT:- The appellant, being a contractor engaged by the Indian Railways, took registration and paid Service Tax upon being advised by the Indian Railways. Thus, it is not a case where the appellant has collected and not paid the Service Tax to the Department. It is a case where the appellant had entertained a doubt as to their Service Tax liability and were firmly of the view that the services rendered were exempt as per Sl. No. 25 of Notification No. 25/2012-S.T. Therefore, there is no suppression of facts with intention to evade the tax on the part of the appellant existing in this case. Hence, the demand of Service Tax by invocation of the extended period of limitation is not sustainable. For the same reason no penalty imposable on the appellant.
Conclusion - The services rendered by the appellant are eligible for the exemption as provided under Sl. No. 25 of N/N. 25/2012-S.T. dated 20.06.2012 as claimed by the appellant since the said services are in the nature of public health, sanitation conservancy and solid waste management which are otherwise provided by the municipality to the general public. Accordingly, the demand of Service Tax confirmed in the impugned order is not sustainable. Since the demand itself is not sustainable, the question of demanding interest and imposing penalty on the appellant company does not arise.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 431
Levy of service tax on labour income and target incentive - HELD THAT:- The issue in the present case is squarely covered by the decision of this Tribunal in appellant’s own case 2024 (4) TMI 1232 - CESTAT ALLAHABAD wherein it is held that the service tax demands on incentives, sale of goods, and services were not legally sustainable.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 386
Denial of refund of Input Tax Credit (CENVAT Credit) under Rule 5 of the CENVAT Credit Rules, 2004 - export of services or not - interpretation of Rule 6A of the Service Tax Rules, 1994 and Rules 3, 4 and 6 of the Place of Provision of Services Rules, 2012 - POPOS Rules - HELD THAT:- Rule 6 of the Place of Provision of Services Rules, 2012, will apply only to services provided by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, and not to mere participation in a trade fair to promote the products of the said group Company namely, Hypertherm (S) Private Limited, Singapore.
Although in the Impugned Order-in-Original, a reference has been made to Rule 14 of the Place of Provision of Services Rule, 2012, it has to be stated that the aforesaid Rule will apply only where the provision of service is prima facie determinable in terms of more than one Rule in which case, the place of provision of service shall be determined in accordance with the Rules that occurs later among the many Rules that merit equal consideration. Hence, this is not the situation under contemplation in the facts of the present case and therefore, reference to the aforesaid Rule was irrelevant in the Impugned Orders.
It is clear that only Rule 3 of the Place of Provision of Services Rules, 2012 is to be applied, even if the service is provided in India. Despite the fact that service is provided in India to a recipient located outside the taxable territory, it is deemed to have been provided abroad if the conditions of Rule 6A of the Service Tax Rules, 1994 are satisfied. In these cases, admittedly services were provided by the Petitioner to Hypertherm (S) Private Limited, a Company from Singapore. Therefore, there is export of service.
The payments have been received by the Petitioner in convertible foreign exchange for the export of service to its group Company namely Hypertherm (S) Private Limited, Singapore. This also satisfies the requirement of Rule 6A(1)(e) of the Service Tax Rules, 1994. Since payment was received in Convertible Foreign Exchange, it has to be held that there was export of service.
Conclusion - The Petitioner is not liable to pay service tax under the provisions of the Finance Act, 1994. The Petitioner is entitled to refund of Input Tax Credit (CENVAT Credit) under Rule 5 of the CENVAT Credit Rules, 2004.
The case is remitted back to the Respondents to segregate those services which are deemed to be provided outside India in terms of Rule 3 of the Place of Provision of Services Rules, 2012 and those services which are deemed to have been provided in India as per Rule 6 of the Place of Provision of Services Rules, 2012 - Petition disposed off by way of remand.
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2025 (3) TMI 385
Seeking rectification of mistake in the final order - whether the tax liability in the present case was under Reverse Charge Mechanism and whether the appellant was liable to pay tax? - HELD THAT:- There is no question of any express determination of nature of service as admittedly the services rendered by the appellant are those of “Goods Transport Agency” and of giving truck/vehicles on hire. The person liable to pay service tax has clearly been discussed by the adjudicating authorities below and the findings have been affirmed by this Tribunal. Since there were two rounds of litigation and the findings of the departmental adjudicating authority have been affirmed by this Tribunal, the principle of merger applies vis-à-vis all the decisions.
There are no error, as alleged, in the impugned final order dated 28.06.2024 except for the aforequoted typographical omission vis-à-vis word “not” in para 5.1 of the impugned final order.
Application allowed.
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2025 (3) TMI 384
Liability to pay Service Tax on the construction of roads and related activities under the Finance Act, 1994 - amounts received by the appellant for the sale of machinery, land, and other services were correctly included in the taxable value for Service Tax purposes or not - Taxability of amount has been received prior to the introduction of the “supply of tangible goods service” i.e., prior to 16th May, 2008 - penalties.
Liability to pay Service Tax on the construction of roads and related activities under the Finance Act, 1994 - amounts received by the appellant for the sale of machinery, land, and other services were correctly included in the taxable value for Service Tax purposes or not - HELD THAT:- From the N/N. 17/2005-ST dated 07.06.2005, it is observed that by virtue of the same, ‘site formation and clearance, excavation and earthmoving and demolition’ and such other similar activities, referred to in sub-clause (zzza) of clause (105) of section 65 of the Finance Act, provided to any person by any other person in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports or other ports, is exempt from the whole of service tax leviable thereon under section 66 of the said Finance Act, 1994. However, we find that the Ld. Commissioner has not extended the benefit of the said notification on the ground that the road constructed is not for the use of general public. In this regard, it is observed that construction of road being private or public is not the criterion for eligibility to the benefit under Notification No.17/2005-ST dated June 7, 2005.
The Ld. Commissioner erred in distinguishing the roads being public or private while examining the eligibility to Notification No.17/2005-ST dated June 7, 2005 when no such criteria is present is the body of the said notification. Accordingly, it is held that by virtue of N/n. 17/2005-ST dt. 07.06.2005 the appellant is eligible for the exemption provided for the ‘Site formation and clearance, excavation and earthmoving and demolition’ and such other similar activities rendered by them. Thus, the demand of service tax confirmed in this regard is not sustainable and hence we set aside the same.
It is also observed that the appellant has raised the ground that they are eligible for exemption from Service Tax with respect to the payment of Rs.48,17,022/- received from M/s. JUD Cements (P) Ltd. on account of sale of land. The submission of the appellant agreed upon that sale of land value is not liable to Service Tax. However, this needs to be verified by the ld. adjudicating authority and for that purpose, the issue needs to be remanded back to the adjudicating authority.
Taxability of amount has been received prior to the introduction of the “supply of tangible goods service” i.e., prior to 16th May, 2008 - HELD THAT:- If the evidences available on record indicate that these amounts have been received prior to 16.05.2008, then no Service Tax is payable on these amounts. However, this needs to be verified by the ld. adjudicating Authority and for that purpose the issue needs to be remanded back to the adjudicating authority.
Penalty - HELD THAT:- The service tax liability is to be re-quantified as per the discussions in the previous paragraphs and hence, the demand of Service Tax along with interest and penalty confirmed in the impugned order is set aside. On re-quantification of their Service Tax liability, the adjudicating authority may decide the liability of penalty, if any required, afresh, based on his findings.
Conclusion - i) The demand of service tax confirmed with respect to construction of road is not sustainable. ii) By virtue of Notification No. 17/2005 ST Dt. 07.06.2005, the appellant is eligible for the exemption provided for the ‘Site formation and clearance, excavation and earthmoving and demolition’ rendered in connection with road construction. iii) The issues relating to exemption from service tax claimed by the appellant needs to be verified by the ld. adjudicating authority.
Appeal disposed off.
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2025 (3) TMI 383
Liability of appellant to pay Service Tax under the Reverse Charge Mechanism for the transportation services received from a Goods Transport Agency (GTA), despite the service provider having already paid the tax - invocation of extended period of limitation - HELD THAT:- The appellant is agreed upon that if service tax was required to be paid by the appellant as alleged in the show cause notice, but the service tax has already been paid by the service provider, department cannot recover the service tax once again from the service receiver under Reverse Charge Mechanism. The service tax cannot be demanded on the same service twice, irrespective of the fact whether the service tax has been paid by the service provide by service receiver. This issue is no more res-integra.
Reliance placed in the case of Dhariwal Industries Limited vs. C.C.E. C. Anand [2023 (10) TMI 595 - CESTAT AHMEDABAD], in which this Tribunal held that even though, legally the appellant is liable to pay service tax but in the facts of the present case the transport agency has admittedly paid such service tax. The assessment of payment of service tax by the transport agency has not been disputed by their jurisdictional officer. Therefore, no question can be raised as regard the service tax payment and assessment thereof at the end of the transport agency. If this be so, then the payment of service tax by the goods transport agency was made good as payment of service tax. Therefore, the demand against the appellant for the same service will amount to demand of service tax twice on the same service which in any case is not permissible.
Once the service provider discharged the service tax where the service recipient is liable to pay the service tax, demand of service tax on the same service from the service recipient shall not sustain on the ground that the particular service which already suffered the service tax cannot be made to suffer the service tax twice on the same service. Accordingly, the service tax paid by the transport agency in the facts of the present case is the payment of service tax and not deposit. Therefore, no demand can be raised from the appellant. The impugned order was held not sustainable and the same was set aside and appeal was allowed.
Conclusion - The learned first Adjudicating Authority and the learned Commissioner (Appeals) have committed error in confirming the demand and recovery of service tax, amounting to Rs.1,17,881/- from the appellant. The first Adjudicating Authority and the learned Commissioner (Appeals) erred in confirming the demand of interest on the amount of service tax and imposition of penalty of Rs.1,17,881/- under Section 78(i) of the Finance Act and Rs. 10,000/- under proviso to Section 77 (1) (b) of the Finance Act, 1994, respectively on the appellant.
Appeal allowed.
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2025 (3) TMI 382
Taxability - services of selling space for advertisements in print media - service are covered under negative list or not - Recovery of service tax with interest and penalties - suppression of facts or not - extended period of limitation - Benefit of exemption under Notification No.33/2012.
Taxability - HELD THAT:- The appellant is admittedly providing advertisement services to print-media. Those services fall under negative list in sub-clause (g) of section 66 (b) of Finance Act. This issue stands already decided by this Tribunal in its order in the case of Adbur Pvt. Ltd. vs. Commissioner of Service Tax, Delhi [2017 (5) TMI 101 - CESTAT NEW DELHI]. Hence, the show cause notice had wrongly proposed the demand on the amount received for rendering services to print media. The adjudicating authorities below are held to have rightly set aside the said demand.
The demand of Rs.3,99,142/- has been confirmed on the amount received as commission for rendering the services. It is observed that the decision of this Tribunal in the case of Adbur Pvt. Ltd. vs. Commissioner of Service Tax, Delhi [2017 (5) TMI 101 - CESTAT NEW DELHI] has held that the commission received by the advertising agencies is chargeable to service tax. However, the advertising agency being a pure agent is held not liable to pay service tax on amount payable to media companies on behalf of their clients.
Extended period of limitation - HELD THAT:- The invocation of extended period has been justified by the authorities below on the ground that the appellant has failed to take the service tax registration and to file their ST- 3 returns. Section 70 of the Finance Act has been invoked, however, in the light of the above discussion and the decisions considered by the adjudicating authorities below itself, the services rendered by the appellant are held to fall under the negative list. Thus, appellant had no liability to pay tax on the amount received for rendering advertisement agency service to the print media except on the amount of commission - the act of taking no service tax registration and of filing no returns is denied to be the ground for invoking extended period of limitation. The Show Cause Notice is, accordingly, held to be barred by time.
Benefit of exemption under Notification No.33/2012 - HELD THAT:- The threshold limit of Rs.10 Lakhs is to be seen for the previous financial year. The authorities below have given the benefit of Notification No.33/2012 for financial year 2017-18 as the threshold limit for previous year (2016-17) was less than 10 Lakhs. It is observed that it was less than 10 Lakhs for the financial year 2014-15, the previous year for Financial Year 2015-16. Hence the authorities below are held to have erred while not granting the benefit of Notification No.33/2012 for the financial year 2016-17 also.
Conclusion - i) The services provided by the appellant fell under the negative list, thus, the demand proposed by the show cause notice set aside. ii) The show cause notice was time-barred due to the lack of evidence of malafide intention or suppression of facts by the appellant. iii) The authorities erred in not granting the appellant the benefit of exemption under Notification No.33/2012 for the threshold limit of Rs.10 Lakhs.
Appeal allowed.
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