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Service Tax - Case Laws

Showing 101 to 120 of 30277 Records

• 2024 (10) TMI 1545
  

  Service tax demand and interest - demand of service tax on the amount towards provident fund - Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994 - Invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994 - HELD THAT:- As the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. They were not filing the ST-3 returns on time in the manner as specified in law. They have suppressed the information with intend to evade payment of taxes. Accordingly, the demand by invoking the extended period of limitation and penalty imposed cannot be disputed with.

  As it is evident that appellant is not even consistent in his own submissions in these proceedings. While before adjudicating authority he has specifically asserted that he do not wish to contest the show cause notice on merits but only on quantification by claiming certain deductions from the taxable value determined by the revenue in show cause notice, his stand before the appellate authority is contrary to his own submissions and is challenging the rate applicable at different period of time. He has not substantiated his claim towards the application of different rates for the different period of demand. Appellant authority having found that said claim has not been substantiated rejected those submissions. We do not find any merits in the challenge made by the appellant to the order of the First Appellate authority.

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• 2024 (10) TMI 1544
  

  Service tax on the bond amounts secured by them from their employees - incident of recovering amount (notice pay from the employees) is covered under category of the declared service - department is of the view that as per Clause (e) of the section 66E of the Finance Act, 1994 this fact is covered by the category of ‘Agreeing to an obligation to refrain from an act, or to tolerate an act or a situation or to do an act.

  HELD THAT:- We have heard both the sides, we find that the issue it hand is no longer res integra as the matter has already been decided by this Tribunal in case of Rajasthan Rajya Vidhyut Prasaran Nigam Limited [2022 (1) TMI 909 - CESTAT NEW DELHI] employee who is the service provider and the service provided by him in the course of employment is excluded from the definition of service. Where the employer recovers any amount, the service provider will be the employer and his services are not excluded from the definition of service. Therefore, a distinction needs to be made on this count. On a specific query from the bench, he fairly submits that there are no case laws to support this argument nor is there any case law contrary to the judgment in the GE T&D [2019 (12) TMI 1566 - MADRAS HIGH COURT]

  In view of our finding that compensation for failure under a cannot is NOT consideration for service under the contract and also following the law laid down by Madras High Court in GE T&D that Notice pay in lieu of termination, however, does not give rise to the rendition of service either by the employer or the employee, the impugned order upholding confirmation of a demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained and needs to be set aside.

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• 2024 (10) TMI 1465
  

  Wilfull failure to pay tax and suppressed the value of service in the returns filed in ST-3 - Suppression for mere non-declaration of details - Invocation of extended period of limitation in terms of proviso to Section 73 of the Finance Act, 1994 - whether the appellant can be fastened with a liability to pay service tax and penalty?

  HELD THAT:- The service tax of banking and financial service was altered with effect from Finance (No.2) Act, 2004 dated 10.09.2004 by Substituting the definition of “banking and other financial services”. Prior to the aforesaid period, the definition read differently.

  The petitioner has paid the Service Tax on 03.07.2008 i.e. within 115 days from the date of receipt of Show Cause Notice.

  We are of the view that the appellant was entitled to take a bonafide stand that no service tax was payable in the context of collection of penal charges although it could be concluded that it was liable to pay service tax. There is no record to show that failure to pay service tax was wilful and deliberate as held in Pushpam Pharmaceuticals Co. [1995 (3) TMI 100 - SUPREME COURT]

  Hon'ble Supreme Court in Uniworth Textiles Ltd.,[2013 (1) TMI 616 - SUPREME COURT] has held that if non-disclosure of certain items assessable to will not invite the wrath of the proviso for the non-payment of duty on disclosed items, after inquiry from the department concerned and does not attract the proviso.

  Thus, we are inclined to hold no penalty is payable by the appellant under any of the provisions of the Act. Since tax payable has been accepted by the appellant, appellant shall also pay interest on belated payment of tax under Section 75 of the Finance Act, 1994.

  We therefore, partly allow the appeal and answer the substantial questions of law partly in favour of the appellant by holding no penalty is imposable on the appellant. The appellant shall pay interest under Section 75 of the Finance Act, 1994 within a period of thirty days from the date of receipt of a copy of this order, if same has not been already paid.

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• 2024 (10) TMI 1464
  

  Demand of Service Tax dropped by the CESTAT on the income shown as non-taxable in Financial Data Summary Sheets (FDSS) - Whether the Respondent / Assessee is liable to pay Service Tax on difference in figure of 'Income' in Form ST-3 and Form 26AS? - HELD THAT:- As functioning of the respondent as a Multi-Modal Transport Operator and who is stated to have made payments toward customs duty, air freight, ocean freight and surcharges for and on behalf of various clients.

  From the material which was gathered in course of the enquiry as well as the verification details provided, the authorities had found that the payments made by the respondent were being reimbursed by the individual clients and the issue was thus clearly confined to that of a reimbursement of expenses incurred for and on their behalf. The respondent also did not place reliance on any material which may have indicated that the reimbursements were subject to a mark up that may have been charged by the respondent.

  CESTAT has ultimately observed non-taxable amount includes amounts like customs duty, BAF & CAF charges, ocean freight and air freight. All these amount are paid by the appellant on behalf of the client and later on are reimbursed. Thus, same cannot be taxed as they are in nature of reimbursements. Bearing in mind the aforesaid, we find no substantial issue of law that can be said to arise in this appeal.

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• 2024 (10) TMI 1463
  

  Reversal of CENVAT Credit - 'total Cenvat credit taken' instead of 'common Cenvat credit taken' for the purpose of reversal of credit under Rule 6(3A) (c) (iii) of the Cenvat Credit Rules, 2004 - the term 'total Cenvat Credit taken' used in the provision of Rule 6(3A)(c)(iii) of Cenvat Credit Rules, 2004 is unambiguous or not - Whether the 2nd respondent is correct in placing reliance on the Stay Order of the Hon'ble Tribunal in the case of Thyssenkrupp Industries [2014 (10) TMI 476 - CESTAT MUMBAI] to hold that only 'total Cenvat credit taken' should be considered in the formula under Rule 6(3A)(c)(iii) of Cenvat Credit Rules, 2004? - failure of the appellant to maintain separate account as is contemplated under Rule 6(2) of the CENVAT Credit Rules, 2004.

  HELD THAT:- It is evident that it is the common input services taken during financial year and not the total CENVAT credit which has to be considered for reversal under Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004. The distortion in the old Rules as it stood during the period in dispute in Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004 was cured to ensure both manufacturers/service providers do not pay reverse/pay the amount under Rule 6 (3A)(c)(ii) of the CENVAT Credit Rules, 2004 in excess - the trading activities carried out by the appellant were “exempted service” within the meaning of the provisions of the CENVAT Credit Rules, 2004. The trading activities carried out by the appellant were “exempted service” both before and after amendment to the Rules.

  As far as the present dispute is concerned, Rule 2(e) of the CENVAT Credit Rules, 2004 is relevant as it stood prior to 2016. It has not undergone any change for the purpose of this inquiry. Similarly, Rule 6 of the CENVAT Credit Rules, 2004 also underwent few changes - During the period in dispute between April 2013 to March 2015, the Rule 6 of the CENVAT Credit Rules, 2004 read slightly different from how it read after the amendment vide Notification No.13/2016-CE (NT) dated 01.03.2016.

  The “traded goods” became “exempted goods” defined in Rule 2(d) of the CENVAT Credit Rules, 2004 and included “non-excisable goods” cleared for a consideration from the factory under the new dispensation.

  All through the period right from inception till 2016, the provisions read identically. For the Assessment Years 2011-2012, 2012-2013 and 2015- 2016, the appellant's appeal was also allowed by the Tribunal. The dispute in these two cases pertain to the Assessment Years 2013-2014 and 2014-2015 which prior to 2016. Since, the provisions have been amended to remove distortion arising out of strict application of the old format, we see no reasons to take a different stand in this appeal.

  The appellant shall be entitled for consequential relief if any - the Impugned Order deserves to be set aside and is accordingly set aside - Appeal allowed.

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• 2024 (10) TMI 1462
  

  Non-payment/ short payment of service tax - demand of service tax + Education Cess+ Secondary & Higher Education Cess - HELD THAT:- Appellant in the present case even before the Original Authority did not contested anything in the show cause notice except for certain computations - The findings or facts rendered by both the authority no nonpayment/ short payment of service tax cannot be faulted with. Even as per the calculation chart submitted by the appellant they have admitted that short payment of service tax to the tune of Rs 5,44,492/-

  That being so, the quantum of short payment needs to be re-determined after allowing the deduction of the amount claimed by the appellant to be towards service tax paid by Hindalco. For the limited purpose of re-computing the demand after allowing this deduction from the gross value matter is remanded back to the original authority.

  The findings recorded by the authorities below cannot be disputed in respect of limitation, as the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. Before the original authority appellant have specifically admitted and has stated that they do not intend to contest the demand made on any ground other than the quantification. In view of the specific averments made by the appellant to this effect in their submissions to the adjudicating authority and during the course of hearing before him, we are not inclined to admit any such plea at this stage. These pleas have been subsequently raised by the counsel for the appellant at the time of hearing before us.

  Thus, we uphold the penalties imposed upon the appellant under Section 77 & 78. However the quantum of penalty under Section 78 shall have to be determined after re-computation of the demand in the remand proceedings. We remand the matter to original authority for the limited purpose.

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• 2024 (10) TMI 1461
  

  Interpretation of N/N. 01/2006-ST for availing abatement on services provided - Department has entertained a view that the service of the insulation provided by the appellant falls outside the preview of the eligibility criteria for the abatement as per Notification No. 01/2006-ST dated 01.03.2006 as amended - HELD THAT:- The matter is no longer res Integra as the issue at hand has already been decided by the Tribunal in the similar circumstances in favour of the appellant.

  The relevant extract of the order in case of RUDRA ENGINEERING VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, VADODARA-I [2024 (2) TMI 1450 - CESTAT AHMEDABAD] has held that 'From the definition of Works Contract Service, it is clear that only specified categories of works contract are considered for levy of Service Tax under the said definition. These are enumerated in clauses (a) to (e). We find that in clause (a) thermal insulation also mentioned and in the present matter appellant had also paid VAT/ sales tax on goods which is used in installation of thermal insulation. We find that the impugned activity of the assessee was nothing but “works contract service”.'

  The facts of the present matter are similar to the matter decided by the Division Bench of this Tribunal - the impugned order in appeal without any merit and therefore the same is set aside - appeal allowed.

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• 2024 (10) TMI 1404
  

  Interpretation of statute - Rule 4(7) and Rule 11 of Cenvat Credit Rules - Applicability of Rule 6 of Cenvat Credit Rules in recovering cenvat credit for unsold carpet area - HELD THAT:- The appellant had availed cenvat credit of service tax paid on input services when the output service was subjected to levy of service tax. It is, therefore, found that availment of cenvat credit was in accordance with law. It is also noted from the proceedings that before receipt of Occupancy Certificate on 22.01.2016 appellant had utilized the entire cenvat credit of Rs.2,51,02,850/- towards payment of service tax on output service.

  Service Tax Law does not provide for levy of service tax on the flats or buildings constructed for which Occupancy Certificate is obtained. Therefore, carpet area of 21,010 square feet constructed by the appellant was not liable to levy of service tax. Revenue has invoked Rule 6 of Cenvat Credit Rules which provides for circumstances where cenvat credit is admissible or not admissible depending on taxability or otherwise of output service.

  It is clear from the ruling by Hon’ble Gujarat High Court in the case of Principal Commissioner vs. Alembic Ltd. [2019 (7) TMI 908 - GUJARAT HIGH COURT] that after obtaining Occupancy Certificate in respect of unsold carpet area for which no service tax will be leviable, cenvat credit already availed when the activity was taxable, the said cenvat credit need not be recovered.

  Thus, the appellant was not required to pay back the amount equivalent to cenvat credit of Rs.25,03,849/- - the impugned order is set aside - appeal allowed.

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• 2024 (10) TMI 1403
  

  Non discharge of service tax - invocation of the extended period or the demand of service tax - Penalties imposed u/s 77 and 78 of the Finance Act, 1994 - appellant was providing taxable services under the category of Maintenance & Repair Service, Man Power Recruitment & Supply Agency Service to the service recipient

  HELD THAT:- Both the authorities below have misdirected themselves as there was no contest by the appellant to the invocation of the extended period or the demand of service tax. Appellant has suo motto computed the service tax due and has paid the said amount. As pleaded his lack of knowledge and status as petty contractor not having means to understand the complexity of taxation of services. Both the authority agree to these submissions and have still gone on to impose heavy penalties u/s 77 and 78 of the Finance Act, 1994.

  Taking note of undisputed findings with regards to status of appellant and his compliance even before the adjudication has been undertaken we do not find any justification for not having considered extending the benefit of Section 80 of the Finance Act, 1994 and waiving of all the penalties imposable on the appellant.

  We do not find any merits in the impugned order to the extent it is in relation to the penalties imposed on the appellant. This is a fit case where penalties imposable under Section 77 and 78 should have been waived in terms of provisions of Section 80 of the Finance Act, 1994.

  Appeal partly allowed to the extent of setting aside the penalties imposed on the appellant.

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• 2024 (10) TMI 1402
  

  Non discharge of service tax - Appellant was providing taxable services under the category of Maintenance & Repair Service, Man Power Recruitment Agency Service & Construction (Commercial & Industrial) Services to the service recipient - Demand of service tax + Education Cess + Secondary & Higher Education Cess - HELD THAT:- As the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. They were not filing the ST-3 returns on time in the manner as specified in law. They have suppressed the information with intend to evade payment of taxes. Accordingly, the demand by invoking the extended period of limitation and penalty imposed cannot be disputed with.

  As decided in Afsar Tour and Travels [2018 (8) TMI 1281 - CESTAT HYDERABAD] leviable of service tax does not change that whether or not they have collected same from their clients. We cannot accept a new ground of liability of service tax at this stage, proposed by the Learned Counsel for the appellant because there was never a point of contention at the time of Order-in-Original or Order-in-Appeal. We therefore, find the Learned Lower Authority was correct and confirmed the demands along with interest and imposing penalties. Appeal dismissed.

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• 2024 (10) TMI 1401
  

  Failure to pay the service tax on the full amount of consideration received - services of construction of complex service - disputed period is from 01/2008 to 08/2010 - HELD THAT:- Attention invited to an order of this bench in the case of M/s. Shanti builders wherein this bench vide Final Order No. 40257/2023 dated 06.04.2023 [2023 (4) TMI 350 - CESTAT CHENNAI] has held that no service tax could be levied under construction of residential complex services prior to 01.07.2010.

  The confirmation of the demand of Service Tax cannot sustain, nor could there be any scope to impose penalties under Sections 77 & 78 of the Financial Act, 1994. Therefore, the impugned order which has upheld the demands deserves to be set aside - appeal allowed.

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• 2024 (10) TMI 1400
  

  Service Tax Exemption under Notification No. 25/2012-ST denied - Demand of Service Tax along with interest and imposed penalty - amount on providing services of laying of cable, under or alongside road, under NOFN project - as per Respondent amount was neither shown by the appellant in their ST-3 returns nor had any service tax been paid by them on such services provided by them to M/s BSNL (BBNL) - appellant submitted that the appellant had rendered services to BBNL/BSNL towards execution of the NOFN project, which are exempt from service tax by virtue of Sl. No. 12 of Notification No. 25/2012-ST dated 20.6.2012

  Whether the appellant is eligible for the exemption under Notification 25/2012-ST dated 20.06.2012? - Even though BSNL is wholly owned by the Government, but it is a State-run Telecom company, whose primary objective is to increase sales revenue with focus on subscriber retention & acquisition by way of strengthening marketing, quality of service and customer delivery. Consequently, any activity undertaken for BSNL would also be for the same purpose, viz., expanding its subscriber base and increase revenues. Therefore, it cannot be said that the NOFN project (now known as Bharat Net project) aimed at bringing broadband connectivity to the Gram Panchayats was only towards planning for economic and social development. Such network was laid in recognition of the fact that expansion was important to increase their subscriber base, thus providing an opportunity to increase their revenues. Hence, the activity undertaken by the appellant is for use for commerce.

  The term ‘Commerce’ as understood by layman refers to the activity of buying and selling goods and services, between businesses or individuals, and can occur domestically or internationally. Commerce is a key component of the economy, encompassing various activities such as trade, logistics, advertising, customer interactions, & also includes different channels like traditional retail, online transactions (e-commerce), and wholesale trade etc.

  As in Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers [2019 (11) TMI 1824 - SUPREME COURT] held that a straight-jacket formula cannot be adopted in every case and the broad principles which can be curled out for determining whether an activity or transaction is for a commercial purpose would depend on facts and circumstances of each case. In the instant case, it stands established that the appellant undertook the activity of laying cables for M/s BSNL, which was for the purpose of providing broadband connectivity was for connecting the areas of India for the purpose of increasing their business, sales revenue which would clearly fall within the ambit of commerce.

  Scope of Notification no. 25/2012-ST dated 20.06.2012 - We note the Notification exempts a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession. The term used in the said notification is that ‘other than commerce, industry or any other business or profession’, which is required to be interpreted strictly, as held consistently by the Hon’ble Supreme Court. Exemption notification should not be liberally construed and the beneficiary must fall within the ambit of the exemption and fulfill the conditions thereof. In case such conditions are not fulfilled, the issue of application of the notification does not arise at all by implication. We hold that the appellant is not entitled to the benefit of the Notification no. 25/2012-ST dated 20.06.2012. We find no infirmity in the impugned order.

  Eligibility of benefit of cum-duty - It is seen from the show cause notice that the appellant had vide their letter submitted that neither had they collected/received the service tax from M/s BSNL(BBNL) on account of providing the service of laying cable, under or along side the road under NOFN project or did they deposit any service tax. In this context, we note non-recovery of service tax is an offence under Sec 73 of the Act.

  Tribunal in M/s Panther Detective Services V. Commissioner of Central Excise, Kanpur [2006 (7) TMI 15 - CESTAT, NEW DELHI] held that the only relief in regard to valuation that the appellants would be entitled to treat the total receipts as inclusive of service tax. It was accordingly ordered that the Revenue shall recompute the tax amount in these appeals treating the total receipts as cum-tax.

  We also take note of the Supreme Court’s decision in the case of Commissioner of Central Excise V. Maruti Udyog Ltd. [2002 (2) TMI 101 - SUPREME COURT] wherein the Court granted the cum-duty benefits to the assessee. The Hon’ble Court noted that the service tax is on the value of taxable services rendered and therefore service tax has to be collected on that value only and the value of taxable services cannot be said to include the tax also. The Court went on to note that the Finance Act, 2006 inserted clause 2 to Sec. 67 with effect from 18.04.2006 provides that where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as with the addition of tax payable, is equal to the gross amount charged.

  We find it appropriate to remand the matter to the original authority for recalculation of the demand extending the benefit of cum-tax on the gross amount charged by the appellant. Accordingly, the penalty under section 78 would be appropriately recalculated, based on the demand.

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• 2024 (10) TMI 1399
  

  CENVAT Credit in respect of ‘input services’ as well as on capital goods on the basis of advisory notes - Invocation of the extended period of limitation under the Finance Act - As alleged audit noticed that BSNL had mainly availed CENVAT Credit on towers falling under Chapter 73 of the Central Excise Tariff, which would not be covered under the definition of the ‘capital goods’ as defined under rule 2(a) of CENVAT Credit Rules, 2004 - HELD THAT:- The show cause notice alleges that BSNL had availed CENVAT credit on tower materials. Neither the show cause notice nor Annexure-A to the show cause notice, except for a bald allegation, substantiate that BSNL had actually availed CENVAT credit on tower materials. Annexure-A to the show cause notice takes into consideration all the CENVAT credit availed on duty paid by BSNL. Annexure-A does not show that BSNL had actually availed CENVAT credit on duty paid for tower materials. The Commissioner completely failed to notice this part of the reply submitted by BSNL and merely proceeded to decide whether credit could have been taken by BSNL on the duty paid for tower materials.

  The issue as to whether CENVAT Credit could have been availed by BSNL on duty paid for tower materials has now been settled by the Tribunal in M/s GMTD Bharat Sanchar Nigam Limited [2024 (8) TMI 785 - CESTAT NEW DELHI] after taking into consideration various decisions, held that BSNL could avail CENVAT credit on duty paid for tower materials.

  Such being the position there is no error in the finding recorded by the Commissioner that BSNL could have availed CENVAT credit on duty paid for tower materials.

  Whether the extended period of limitation could have been invoked in the facts and circumstances of the case? - A perusal of the show cause notice indicates that there is a bald allegation relating to suppression of facts but there is no allegation that facts were suppressed with an intent to evade payment of service tax.

  The extended period of limitation under the proviso to section 73 (i) of the Finance Act, therefore, could not have been invoked. See Sunshine Steel Industries [2023 (1) TMI 638 - CESTAT NEW DELHI]

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• 2024 (10) TMI 1350
  

  Challenge to Notification Nos. 14/2017-ST, 15/2017-ST and 16/2017-ST all dated 13 April 2017 issued by respondent no. 1 and Circular No. 206/4/2017-ST dated 13 April 2017 issued respondent no. 2 - liability to pay Service-tax under the Reverse Charge Mechanism on Ocean Freight paid by the petitioner on import of the goods - HELD THAT:- The challenge to these very notifications and circular had come up for consideration before the Gujarat High Court in case of MESSRS SAL STEEL LTD. & 1 OTHER (S) VERSUS UNION OF INDIA [2019 (9) TMI 1315 - GUJARAT HIGH COURT], and by a detailed judgment, in paragraph 58, the said notifications and the circular were quashed.

  In view of thereof, the impugned Notification Nos. 14/2017-ST, 15/2017-ST and 16/2017-ST all dated 13 April 2017 issued by respondent no. 1 and Circular No. 206/4/2017-ST dated 13 April 2017 issued respondent no. 2 are hereby quashed and set aside.

  Petition disposed off.

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• 2024 (10) TMI 1349
  

  Liability of appellant to discharge the service tax under reverse charge mechanism - transportation of imported goods by a vessel (Ocean Freight) from the place outside India to custom station in India - HELD THAT:- This issue is no longer res-integra as the same is settled by the Hon’ble Gujarat High court in the case of MESSRS SAL STEEL LTD. & 1 OTHER (S) VERSUS UNION OF INDIA [2019 (9) TMI 1315 - GUJARAT HIGH COURT] wherein the Hon’ble high court has held that 'The Notification Nos. 15/2017- ST and 16/2017-ST making Rule 2(1)(d) (EEC) and Rule 6(7CA) of the Service Tax Rules and inserting Explanation-V to reverse charge Notification No.30/2012-ST is struck down as ultra vires Sections 64, 66B, 67 and 94 of the Finance Act, 1994; and consequently the proceedings initiated against the writ applicants by way of show cause notice and enquiries for collecting service tax from them as importers on sea transportation service in CIF contracts are hereby quashed and set aside.'

  Following the above judgment, in another case of COMMISSIONER OF SERVICE TAX, AHMEDABAD VERSUS KIRI DYES AND CHEMICAL LIMITED [2023 (3) TMI 1400 - CESTAT AHMEDABAD], this Tribunal held that ocean freight is not taxable.

  In the present case the demand on ocean freight is not sustainable. Hence, the impugned order is set aside - Appeal allowed.

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• 2024 (10) TMI 1348
  

  Short payment of service tax - interest for the delayed payment of service tax - Penalty - Maintenance & Repair Service - Man Power Recruitment & Supply Agency Service - extended period of limitation - non-application of mind - violation of principles of natural justice - HELD THAT:- The Original Authority has determined the tax due from the appellant to be less than the amount claimed to be payable by the appellant as per the calculation chart submitted by the appellant, and paid by them. Having noted so he went on to invoke the extended period of limitation, demanded interest and also imposed penalties under Section 77 and 78 of the Act. The order in original only shows non application of the mind by the adjudicating authority. It seems that adjudicating authority has recorded all the finding in the matter just to justify imposition of penalty.

  Both the authorities below have misdirected themselves as there was no contest by the appellant to the invocation of the extended period or the demand of service tax. Appellant has suo motto computed the service tax due and has paid the said amount. He made the submission to this effect before the original authority and also before the appellate authority. He also deposited the interest due as has been noted by the First Appellate authority. He also pleaded his lack of knowledge and status as petty contractor not having means to understand the complexity of taxation of services. Both the authority agreed to these submissions and have still gone on to impose heavy penalties under Section 77 and 78 of the Finance Act, 1994.

  Taking note of undisputed findings with regards to status of appellant and his compliance even before the adjudication/ appellate proceeding has been concluded there are no justification for not having considered extending the benefit of Section 80 of the Finance Act, 1994 and waiving of all the penalties imposable on the appellant.

  There are no merits in the impugned order to the extent it is in relation to the penalties imposed on the appellant. This is a fit case where penalties imposable under Section 77 and 78 should have been waived in terms of provisions of Section 80 of the Finance Act, 1994 - appeal allowed in part.

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• 2024 (10) TMI 1347
  

  Recovery of service tax with interest and penalty - quantification of service tax liability and deductions claimed by the appellant - suppression of taxable value - HELD THAT:- Interestingly, appellant in the present case even before the Original Authority also did not contested anything in the show cause notice except for certain computations.

  The appellant do not dispute the liability to pay the service tax and has in fact admitted the liability to pay the service tax. In view of the admission of liability to pay the service tax as per show cause notice, we are left with only one issue. Appellant has before the original authority submitted a calculation chart computing the tax liability. However no supporting document were produced before the adjudicating authority. When the said chart was sent for verification to the range office, appellant had failed to produce any of the supporting documents and the said chart could not be verified for its correctness.

  As appellant has not produced any document to establish their claim for further deduction of Rs 40,896.45/- paid a service tax by Hindalco, the said deduction has not be allowed by the authorities below. No such document evidencing payment of this amount as service tax by Hindalco to appellant has been produced before us, hence we do not find any merits in this claim also. In view of the specific admissions made by the appellant, there are no infirmities in the impugned order.

  There are no merits in this appeal - appeal dismissed.

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• 2024 (10) TMI 1346
  

  Levy of service tax on Business Support Service - Denial of CENVAT Credit on club membership renewal fees in terms of Rule 2(l) of the CENVAT Credit Rules, 2004 - Suo-Moto recredit to the CENVAT account taken on account of service tax paid twice or in excess of the service tax liability done without documentary evidence as prescribed under Rule 9 of the CENVAT Credit Rules, 2004 - Imposition of penalty for non-payment of Service Tax under the category of “Intellectual Propery Service other than copyright” - time limitation.

  Levy of service tax on Business Support Service - HELD THAT:- The appellant and EPML were operating in two completely different products and were catering to two completely different sets of customers. As such, EPML could not have outsourced the activities of evaluation of prospective customers, processing of purchase orders and fulfilment of services to the Appellant, as alleged in the impugned Show Cause Notice. Moreover, the exports were not being made by the appellant to its own goods and accounting of the same was made in the books of the appellant only. It is an admitted position in the impugned order that none of the parties were undertaking the export of goods manufactured by the other. Therefore, by exporting its own goods, the appellant has not provided any kind of support service to EPML, but the same is to themselves only.

  The appellant was not undertaking the activity of evaluation of prospective customers, processing of purchase orders or fulfilment of service as the Appellant and EPML were dealing in varied products and were catering to varied customers - the activity of export of goods by the appellant through their group company viz. EPML cannot be termed as “business support service”. Therefore, on merit, the appellant is not liable to pay Service Tax under the said category. Accordingly, the demand of Rs.1,54,77,549/- under the category of ‘Business Support Service’, is dropped.

  Denial of CENVAT Credit on club membership renewal fees in terms of Rule 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT:- In this case, the charges paid by the Appellant were towards corporate club membership which were used for organising meeting with various stakeholders viz., promoters, distributors and vendors in order to carry out sales promotion activities - the appellant is entitled to avail CENVAT Credit on club membership renewal fees. Hence, the CENVAT Credit of Rs.82,400/- cannot be denied to the appellant.

  Suo-moto recredit to the CENVAT account without documentary evidence - HELD THAT:- The the appellant is entitled to avail CENVAT Credit on club membership renewal fees. Hence, the CENVAT Credit of Rs.82,400/- cannot be denied to the appellant.

  Imposition of penalty for non-payment of Service Tax - HELD THAT:- The appellant has paid the entire amount of tax along with interest before issuance of the Show Cause Notice upon being pointed out by the audit. In these circumstances, no penalty is imposable on the appellant. Accordingly, the penalty of Rs.1,49,822/- imposed against the appellant is dropped.

  Time limitation - HELD THAT:- The fact is noted that periodical audits took place from time to time, at the premises of the appellant. Therefore, the Show Cause Notice issued on 15.12.2016 for the period 2011-12 is barred by limitation. Hence, the appellant also succeeds on the ground of limitation.

  The impugned order is set aside - appeal allowed.

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• 2024 (10) TMI 1345
  

  Extended period of limitation - suppression of facts or not - liability of sub-contractor - to pay Service Tax on supply of labour services - manpower recruitment or supply agency service - revenue neutarlity - HELD THAT:- The Circular No.96/7/2007-S.T. dated 23.08.2007 has been issued clarifying that sub-contractors are required to pay Service Tax even when the main contractor has paid Service Tax on the entire amount, since the sub-contractor will be eligible to take CENVAT Credit thereon. Accordingly, it is observed that after 23.08.2007, sub-contractors are liable to pay Service Tax even if the main contractor pays the Service Tax on the entire amount.

  There was confusion prevalent on this issue. The Board had also issued a clarification dated 14.09.1997 wherein it had been clarified that sub-contractors were not liable to pay Service Tax when the main-contractor had paid Service Tax on the entire amount as the issue involved is revenue neutral. Only after issue of the Circular dated 23.08.2007 by the Board, the doubt about the liability to Service Tax of the sub-contractor has been clarified. However, may service providers continue to adopt the old practice of non-payment of service tax treating the issue as revenue neutral.

  In the present case, it is observed that the Appellant had entered into the agreement in the year 2004 and the main contractor had been paying Service Tax. The Appellant has not paid service tax on the amount received by them as a sub-contractor and no objection was raised at any point of time - the suppression of facts with intention to evade the tax has not been established in this case. For the same reason, the penalty under Section 78 of the Finance Act, 1994 is not imposable on the Appellant.

  The demand of Service Tax by invoking the extended period of limitation is not sustainable. Accordingly, the impugned order is set aside and the matter remanded back to the adjudicating authority for the purpose of calculating the Service Tax liability for the normal period of limitation, if any. The Appellant is liable to pay service tax along with interest for the normal period of limitation.

  The demand raised by invoking the extended period of limitation is not sustainable. The demand of service tax, if any, along with interest is upheld for the normal period of limitation - matter is remanded back to the adjudicating authority for calculating the Service Tax liability for the normal period of limitation, if any - appeal allowed by way of remand.

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• 2024 (10) TMI 1344
  

  Payment of differential service tax - Cleaning Services - allegation in the SCN and the impugned order is general in nature and there is no specific allegation which warrants levy of Service Tax - HELD THAT:- The case at hand shows that the SCN was issued on assumptions and presumptions and hence cannot be sustained. A similar matter was examined by a Division Bench of this Tribunal, in Balaji Insulations India Pvt. Ltd. [2024 (6) TMI 771 - CESTAT MUMBAI] which covers the legal issues involved in this case, where it was held that 'while determining value of taxable service under Section 67 ibid, such aspect as to the activities which are covered by negative list and activities which are mentioned in the definition of service as those which are not covered by such definition becomes important'.

  It is a well-accepted norm of judicial discipline that a Bench of lesser quorum / strength should follow the view taken by Bench of larger quorum / strength, in a case whose ratio covers the legal issue involved in the impugned lis, more so when it is based on the precedence of earlier judgments on the matter. Having found the impugned order to be based on assumptions and presumptions without examining the books of accounts etc. and is liable to be set aside, the question of extended period, penalty etc. does not arise.

  The impugned order is set aside - appeal allowed.

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