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Service Tax - Case Laws
Showing 141 to 160 of 30960 Records
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2025 (3) TMI 197
Levy of penalty - whether penalty has been properly imposed or the matter should have been remanded on this aspect also for penalty under Section 78 required to be imposed? - HELD THAT:- The period involved in this case is January- 2014 to March-2015. It is found that the order setting aside penalty under Section 78, imposed penalty under Section 76 and remanded matter on various points. Same has been correctly passed by the learned Commissioner (Appeals).The fact is also noted that there was an earlier show cause notice issued to the party and that was done after thorough scrutiny of its functioning. Therefore, the matter was well within the knowledge of the department. Any provision relating to non-filing of return or not paying tax dues does not bring the concept of ‘intent to evade payment of Tax’ as the same could be outcome of contentious issues on taxability, at times. As found by the Learned Commissioner (Appeals), only quantum of service tax was disputed and not the liability itself. In view of various payments made by the appellant as mentioned above, the order taking note has set aside the penalty under Section 78 of Finance Act, 1994.
Conclusion - There is no error in the impugned order which set aside penalty under Section 78. Even otherwise imposition of simultaneous penalties under Section 76 and Section 78 is debatable in various High Courts.
Appeal of the department is therefore liable to be rejected.
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2025 (3) TMI 196
Recovery of service tax with interest and penalty - benefit of threshold exemption and cum tax benefit - branded service to the subscribers or not - extended period of limitation - Admissibility of Cenvat credit.
Recovery of service tax with interest and penalty - benefit of threshold exemption and cum tax benefit - extended period of limitation - HELD THAT:- It is settled principal in law that a subsequent judgment cannot be a basis for making the demand by invoking extended period. In this decision Tribunal has concluded that extended period of limitation would not be available for making this demand. Accordingly, the extended period of limitation would not be available for making this demand and the demand should be restricted to normal period of limitation.
Admissibility of Cenvat credit - HELD THAT:- There are no reason to disagree with the findings recorded in the impugned order. The credit have to be allowed strictly as per the provisions of the Cenvat Credit Rules and appellant should have taken the credit within one year from the date of submission of document against which credit has been taken. In the case of Kusum Ingots & Alloys Ltd. [2000 (7) TMI 108 - CEGAT, NEW DELHI] referred by Authorised Representative appearing for revenue, Tribunal have upheld the denial of credit taken beyond the period prescribed by Central Excise Rules, 1944 - it is not inclined to allow the benefit of Cenvat credit availed in respect of the documents which admissibly are more than one year beyond one year from the date of issuance of show cause notice which goes contrary to Rule 4 of Cenvat Credit Rules.
Extended period of limitation - HELD THAT:- The extended period of limitation could not have been invoked in this matter, therefore, penalties imposed under Section 78 is also set aside.
Conclusion - i) The appellants are not providing any branded service to the subscribers and are entitled to avail the benefit of exemption Notification No. 33/2012-ST dated 20.06.2012. ii) Extended period of limitation could not have been invoked in this matter, therefore, penalties imposed under Section 78 are also set aside. iii) The appellants are entitled to avail Cenvat credit of the service tax paid by the MSO, subject to compliance with the Cenvat Credit Rules, 2004. iv) The demand should be restricted to the normal period of limitation.
Matters are remanded back to the Original Authority for re-quantification - Appeals are partly allowed and matter remanded to original authority for re-quantification of demand.
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2025 (3) TMI 126
Exemption from service tax - services provided by the petitioners, specifically related to Solid Waste Management, are exempt from Service Tax under the Finance Act, 1994 - Section 66-B of the Finance Act, 1994 - validity of SCN - notice proposing to levy service tax, can be construed as a notice for recovery while affirming a final demand or not? - HELD THAT:- The Section 65-B (44) of the Finance Act 1994, defines the term ‘service’. Section 65-B (51) of the Finance Act, defines taxable service as – ‘taxable service’ means any service on which service tax is leviable under section 66B. Section 66B of the Finance Act provides that there shall be levied a tax on the value of all services other than those specified in the Negative List - Section 66D of Finance Act, 1994, provides for the negative list, while Section 93 of the Finance Act provides power to the Central Government to grant exemption for taxable service from service tax. Accordingly, unless the service is one that falls in the negative list or a notification of exemption, the same would fall within the service tax net.
This Court in M/s Sapthagiri Cleaning Services Versus The Joint Commissioner of Central Tax Bengaluru, The Deputy Commissioner of Central Tax Bengaluru [2024 (9) TMI 1418 - KARNATAKA HIGH COURT], while considering setting aside of the show cause notice in an identical factual matrix had declined to issue a writ as sought for while observing that the relief sought for required interpretation of work order in the context of the exemption notification and accordingly, relegated the matter to the stage of post show cause notice. There is no reason that the present writ petitions seeking setting aside of show cause notice on the ground of exemption or non-chargability to service tax are to be disposed off on different grounds.
The interpretation of the work orders/ contracts would be necessary in order to arrive at a conclusion as regards non chargeability or as regards the application of exemption notification. It is relevant to note the observations made by the Apex Court in Union of India and another v. VICCO Laboratories [2007 (11) TMI 21 - SUPREME COURT], wherein it is held that the Writ Courts could interfere at the stage of show cause notice only under exceptional circumstances and when factual adjudication is warranted, the interference by the Writ Court is ruled out.
While the writ petitions challenging validity of the show cause notice are disposed of by relegating the petitioners to the stage post show cause notice reserving liberty to file additional reply and to file reply if not already filed permitting the assessees to raise all other contentions in support of their case of being within the exemption notification or outside the service tax net, the other writ petitions raising identical grounds assailing the adjudicating order (Order-in-Original) are also allowed by setting aside the adjudicating order and relegating the assessees to the same stage of post show cause notice. Such order is passed noticing substantial contentions are raised in matters where show cause notices are assailed.
In light of the contention of the revenue that the receiver of service i.e., BBMP/ local authority or Government is not a business entity registered as body corporate, such aspect is also kept open for consideration by the authority upon remand of the matters to the stage of post-show cause notice.
Conclusion - The writ jurisdiction is not the appropriate forum for resolving complex factual disputes involving tax assessments. The court set aside adjudicating orders and remanded the matters to the stage of post-show cause notice to ensure uniformity and consistent adjudication by the tax authorities.
Petition disposed off.
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2025 (3) TMI 125
Levy of service tax - amounts collected as damages/penalties for breach of contract - Section 66E(e) of the Finance Act, 1994 - HELD THAT:- The amount recovered by the appellant towards penalty is not a consideration for any activity which has been undertaken by the appellant and as a result there is no ‘service’ in terms of Section 65B(44) of the Act. The facts of the present case do not suggest that there is any other independent agreement to refrain or tolerate, or to do an act between the parties hence the issue is decided in favour of the appellant. The other issues related to invocation of extended period of limitation, penalty and interest are not required to be gone into as the issued on merits stands decided in favour of the appellant.
The impugned order deserves to be set aside - The appeal is, accordingly allowed.
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2025 (3) TMI 124
Liability to pay service tax - full consideration received for providing the ‘Manpower Supply Service’, including salary, PF and ESIC - HELD THAT:- The issue raised in the present case is whether the appellant is liable to pay service tax on the full consideration received for providing the ‘Manpower Supply Service’, including salary, PF and ESIC, which has been considered in the case of appellant themselves by the Hon’ble Rajasthan High Court, titled as Bhanwar Lal Gurjar Vs. Commissioner of CGST & Service Tax – Jaipur [2019 (12) TMI 890 - RAJASTHAN HIGH COURT], where the Division Bench considered the same issue and following the decision of the Hon’ble Apex Court in the case of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT].
The period involved in the show cause notice is April 2012 to July 2012 and the demand has been made by virtue of Section 67 of the Act read with Rule 5 of the Service Tax (Determination of Value) Rules, 2006. In view of the law laid down by the Hon’ble Apex court in Intercontinental Consultants and Technocrats Pvt. Ltd., the demand made under Section 67 is not sustainable as it does not include the reimbursable expenses for providing such service during the period in question.
Conclusion - The appellant was not liable to pay service tax on the full consideration received for providing 'Manpower Supply Service' and that the demand made under Section 67 was not sustainable.
There are no merits in the impugned order and the same is hereby set aside - appeal allowed.
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2025 (3) TMI 123
Classification of service - Works Contract Service (WCS) - respondent had received payments from their customers but not shown the taxable value in their ST-3 returns - HELD THAT:- This Tribunal taking note of the CBEC Circular No.108/02/2009-ST dated 29.01.2009 in CC,CE&ST Vs. Pragati Edifice Pvt. Ltd. [2019 (9) TMI 792 - CESTAT HYDERABAD] case has held that 'it is well settled legal position that whether the service is rendered as service simpliciter or as a works contract, no Service Tax can be levied on construction of residential complex prior to 1-7-2010.'
Conclusion - i) Construction services completed before the execution of a sale deed, where the property is transferred post-construction, are considered self-service and not subject to service tax prior to 01.07.2010. ii) The CBEC Circular No.108/02/2009-ST applies to cases where construction is completed before sale, exempting such transactions from service tax.
There are no merit in the appeal filed by the Revenue - Revenue’s appeal is dismissed.
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2025 (3) TMI 122
Short payment of service tax - Exemption from services tax - export of services or not - appellant has received the amount which was not reflected in the ST-3 returns for the relevant period (2015-16) - extended period of limitation - penalties - HELD THAT:- In the present case, it is observed that appellant is engaged in providing Goods Transport Agent services. They issue consignment notes for transportation of goods from India to Nepal for which payments are received by him from overseas clients in India, who undisputedly are corporate entities. Thus, the liability to pay service tax is on the consignee. By referring to provisio to the said rule Commissioner (Appeal) has concluded that the liability to pay service tax falls on the appellant - While coming to the said conclusions impugned order also rejected the arguments advanced by the appellant vis a vis Notification No 30/2012-ST which provides for payment of service tax on reverse charge basis by the person liable to pay freight.
From perusal of the documents i.e. consignment note, it is quite evident that both consigner and consignee are corporate entity. The freight in the present case is paid by the consignee located outside India, in Nepal. The liability to pay service tax in such case would be on consignee and not on GTA as per notification no.30/2012 dated 20.06.2012 - From Rule 10 of the Place of Provision of Services Rule, 2012, it is evident that in case of Good Transport Agency Service the place of provision of service is location of the person liable to pay service tax. In the present case the person liable to pay service tax is the consignor or consignee as the case may be and the location of the said person will be the place of provision of service.
Extended period of limitation - HELD THAT:- By combined and harmonious reading of the Rule 2(1) (d) of Service Tax Rules, 1994, Rule 10 of Place of Provision of Services Rules, 2012 and Notification No 30/2012-ST, it is found that appellant was having a reason to bonafide belief that no service tax was payable by him in respect of service provided by him. As it is found that appellant entertained a belief which is on the basis of the notification and the documents, there are no merits in invocation of extended period for making this demand.
Penalties - HELD THAT:- As the demand cannot stand in the test of limitation, the same is set aside. Penalties imposed upon the appellant are also set aside.
Conclusion - i) In the present case the person liable to pay service tax is the consignor or consignee as the case may be and the location of the said person will be the place of provision of service. ii) As it is found that appellant entertained a belief which is on the basis of the notification and the documents, there are no merits in invocation of extended period for making this demand. iii) Penalties imposed upon the appellant are also set aside.
Appeal allowed.
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2025 (3) TMI 121
Non/short-payment of service tax - it is alleged that the appellant had received substantial amounts towards the provision of taxable services, but has not discharged due service tax - recovery with interest and penalties - HELD THAT:- Undisputedly the services provided by the appellant qualify to be treated as export of services. Thus, from the impugned order it is evident that Commissioner (Appeal) has himself dropped the demands in respect of all the services provided for which the BRC’s were produced. However in respect of the demands where the BRC’s were not produced he proceeded to uphold the demand made along with the interest and penalties.
The appellant have stated and produced a copy of certificate from Chartered Accountant to the effect that the amount which i.e. Rs.2,49,41,667/- was also received in foreign exchange - By the above certificate, it has been certified that appellant have received the amount also in convertible foreign exchange through banking channels.
As this certificate was not produced before the Commissioner (Appeal) at the time of adjudication, it is deemed fit to remand the matter back to Commissioner (Appeals) for re-consideration of differential demand confirmed.
Conclusion - i) The services provided by the appellant qualified as export of services, and demands were dropped where supporting documents were produced. However, demands without supporting documents were upheld along with interest and penalties. ii) The appellant presented a certificate from a Chartered Accountant during the appeal, certifying that a specific amount was received in foreign exchange through banking channels, which was not produced before the Commissioner (Appeals). The Tribunal deemed it fit to remand the matter back to the Commissioner (Appeals) for reconsideration in light of the new evidence.
Appeal allowed by way of remand.
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2025 (3) TMI 120
Condonation of delay in filing appeal - appeal rejected on the grounds of limitation holding that the appeal filed on 16.08.2022 is beyond permissible condonable time limit of one month - HELD THAT:- The impugned order has been passed on the presumption by the learned Commissioner (Appeals) that the Order-in-Original dated 23.12.2021 was served on the Appellant, on the basis of the evidence of dispatch and the contention of the Department that such dispatch was not returned back by the Post office.
The learned Commissioner have erred in making the presumption in the absence of proof of delivery not produced by the Department. During the relevant time as per the provisions of Section 37C(1)(a), any order passed under the Act was to be served through Registered Post or Speed Post to the person for whom it was entitled or his authorized agent with acknowledgement due as proof of delivery. Thus, it was incumbent upon the Revenue to produce evidence of delivery or service which is the mandate as per the Section 37C(1)(a) of the Act. In absence of proof of delivery of order dated 23.12.2021, the same cannot be deemed as served on the Appellant as has been held by the Hon’ble Rajasthan High Court in the case of R. P. Casting Pvt. Ltd. [2016 (6) TMI 996 - RAJASTHAN HIGH COURT].
Conclusion - In absence of proof of delivery, it is held that the presumption is not sustainable and accordingly the appeal of the Appellant cannot be held as barred by limitation.
It is deemed appropriate to remand the matter to the learned Commissioner (Appeals) to decide the appeal on merits after giving proper opportunity to the Appellant without further visiting the aspect of limitation.
Appeal allowed by way of remand.
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2025 (3) TMI 65
Disallowance of wrongly availed and utilized input service credit - input service or not - Packaging Service - Department was of the view that such input services were availed by the appellant not only for rendering the services to BPCL but also for the sale of their own LPG on which no excise duty or service tax was paid - HELD THAT:- The issue whether the input service tax credit taken on taxable services availed while providing taxable output services as well as engaging in the activity of trading is no more res-integra as it has now been consistently held by High Courts of different jurisdictions that credit cannot be taken of entire service tax paid on taxable services availed while providing taxable output services or manufacturing taxable goods as well as simultaneously engaging in the activity of trading.
It is seen that the Honourable High Court of Madras in its decision in M/s. Ruchika Global Interlinks v The CESTAT, Chennai, [2017 (6) TMI 635 - MADRAS HIGH COURT] has held that 'learly, both before and after amendment, “exempted services” meant those taxable services, which were exempt from whole of Service Tax and, included those services on which Service Tax was not leviable, under Section 66 of the Finance Act. The inclusion in Explanation to Rule 2(e) “trading” was, without doubt, only clarificatory. As accepted by Mr. Jayachandran, the appellant had not been paying Service Tax on trading activity during the relevant period.'
Again, in CCE Thane II v. Milton Polyplas (I) Pvt Ltd, [2019 (4) TMI 240 - BOMBAY HIGH COURT], the Honourable High Court of Bombay was deciding whether the notice issued invoking the erstwhile Rule 57 I of the MODVAT rules demanding fraudulently availed credit during the period 1995 to 1999 would abate as contended by the Respondent-assessee therein, since the MODVAT rules were omitted and/or substituted by CENVAT Rules w.e.f 1st April 2000.
The effect of Section 38A, namely that it will not affect the previous operation of the rules and the right, privilege, obligation or liability acquired, accrued or incurred or incurred under the said repealed rules is subject to the caveat “unless a different intention appears”, stipulated therein. However, while the Cenvat Credit Amendment Rules, 2011, notified by Notification No.3/2011-CE (NT) dated 01-03-2011, which came into effect from 01.04.2011, effected sweeping changes, we could not glean or discern a different intention to curb any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded, so as to deny the benefit under Rule 6(5) of the CCR that is being claimed by the appellant.
If the appellants were availing any of the aforementioned specified taxable services and had taken credit of service tax paid on the same and have not used such specified taxable services exclusively in or in relation to providing exempted services, then irrespective of the stipulations in sub-rules (1), (2) and (3) of Rule 6 of the Cenvat Credit Rules, 2004, credit of the whole of service tax paid on such specified taxable services shall be allowed and such taking of credit is correct and legal. The jurisdictional High Court in the case of M/s. Ruchika Global Interlinks has held that the explanation to Rule 2(e) stipulating that “exempted services” includes trading is clarificatory. Thus, for the relevant period, trading is to be treated as “exempted services”.
Conclusion - i) Input service tax credit on services used in trading activities cannot be availed as trading is treated as an exempted service. ii) The benefit of Rule 6(5) of the Cenvat Credit Rules, 2004, applies to the relevant period, allowing credit on specified services unless used exclusively for exempted services. iii) Penalties imposed on the appellants are unsustainable due to the interpretational ambiguities and the appellants' bona fide belief in their entitlement to credits.
The matter needs to be remanded to the jurisdictional adjudicating authority in order to determine the extent to which the cenvat credit has been taken on the services which the appellants have claimed would be taxable services as specified in the sub-clauses of clause (105) of Section 65 of the Finance Act as listed in Rule 6(5), and credit of whole of service tax of which shall be allowed unless such service is used exclusively in or in relation to manufacture of exempted goods or providing exempted services - Appeal disposed off by way of remand.
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2025 (3) TMI 64
Levy of servie tax - insurance auxiliary services - incentives received from insurance companies - reverse charge mechanism - HELD THAT:- In respect of the same Appellant, the Tribunal for the earlier periods has set aside the demands and penalties vide SREE SARADAMBAL AUTOMOBILES (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [2018 (3) TMI 195 - CESTAT CHENNAI] where it was held that appellants were not liable for service tax under Insurance Auxiliary Service due to their lack of qualifications as actuaries and the nature of their operations as explained during the proceedings.
The impugned Order-in-Appeal cannot be sustained - appeal allowed.
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2025 (3) TMI 63
Abatement of appeal, on the death of the appellant - short payment of service tax - suppression of value - recovery alongwith penalty - HELD THAT:- The Appellant who was a sole proprietor has died on 31.05.2022 during the pendency of the present appeals. We also find that in terms of Rule 22 of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, on the death of the appellant, the proceedings will be abated unless an application is made for continuance of such proceedings by the legal Heirs of the Appellant. In this case, no such application has been received. As the Death has occurred on 31.05.2022, nearly three years passed already.
In view of the judgement of the Hon’ble Supreme Court in the case of Shabina Abraham & Ors. Vs. Collector of Central Excise & Customs [2015 (7) TMI 1036 - SUPREME COURT] wherein it has been held that no proceedings can be initiated or continued against a dead person as it amounts to violation of natural justice in as much as the dead person, who is proceeded against is not alive to defend himself.
Conclusion - On the death of the appellant, the appeal stands abated and disposed of in terms of Rule 22 of the CESTAT procedure Rules, 1982.
Appeal is abted and disposed off.
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2025 (3) TMI 62
CENVAT Credit - input services - whether or not, the disputed services on which the CENVAT credit is taken by the appellants is duly covered under the scope and definition of Rule 2(l) of the CENVAT Credit Rules, 2004 as ‘input service’?
Catering, food and outdoor catering services - HELD THAT:- Under the unamended provisions (effective up to 31.03.2011), the phrase ‘activities relating to business’ was specifically finding place in the inclusive part of the definition of ‘input service’. The inclusive definition in a fiscal statute is a well-recognized device to enlarge the meaning of the word defined and it expands the meaning of the basic definition - such an yardstick cannot be applied for the period w.e.f. 01.04.2011,as by way of amendment of the definition of input service, certain services like general insurance services, Health Insurance, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees etc., were excluded from the purview of definition of input service, and in the eventuality, when the said excluded category of service(s) are used primarily for personal use or consumption of any employee. In other words, CENVAT credit of service tax paid on such service(s) should not be considered as input service, entitling an assessee to avail CENVAT credit thereon.
Health & fitness service - HELD THAT:- The records placed in file and sample invoices indicate that these services have been used to keep a check over the wellness or health of a person, before taking up the assignment in the appellants company and for taking up job assignments/projects from time to time. Further, the invoices have been billed to the company and not for the individuals for their personal consumption. Hence, these services are eligible to be considered as ‘input service’. Further, it is also found that the Tribunal in the case of SITEL India Limited [2016 (3) TMI 203 - CESTAT MUMBAI] have held that health and fitness service as eligible input service, where the output service is being provided on 24X7 basis, which is also the situation in the present case.
Interior decorator service - HELD THAT:- In the representative sample invoice submitted by the appellants, it is shown as the renovation works under taken for the guest house at Vikhroli. No other details are available to relate such renovation or interior decoration work having a relation to the provision of output service, either directly or indirectly. Therefore, it is unable to agree with the view that in the present case, there is sufficient evidence to consider the interior decorator service as an eligible input service. Therefore, CENVAT credit to the extent of Rs.6,93,107/- relatable to the ‘interior decorator service’ is not admissible as eligible input service.
Packaging services - HELD THAT:- The nature of services are mentioned as packing, unpacking, loading, unloading and transportation of household goods for transportation from one location to another with respect to few employees. Though it is claimed by the appellants that such services were used for packaging and movement of various goods procured for use in the provision of output services, there are no evidence to such claim in the documents placed in the appeal records or in any of the written submissions given by the appellants. In such a factual position, it is unable to find any basis for allowing such services used for personal consumption of employees under the category of eligible input service and therefore consider these services as ineligible input service.
Public relations service - People relationship management service - HELD THAT:- The Co-ordinate Bench of the Tribunal in the case of Orient Bell Limited [2017 (1) TMI 840 - CESTAT ALLAHABAD] have examined the public relations service and have held that these are having an objective of enhancing Brand Value, support to Marketing & Promotional Initiatives, Building Corporate image, Creating Awareness etc. to enable the company in providing enhanced output services. In view of the above, these services could be considered as eligible input service.
Photography service - video tape service - HELD THAT:- The adjudicating authority on examination of the invoices submitted before him had given a finding that he is unable find any information other than the name of service provider, in order to relate to the output service provided by the appellants. It is unable to examine the factual aspect as no invoices or supporting documents have been produced by the appellants. Therefore, these services are not eligible to be considered as eligible input service.
Rent-a-Cab service - HELD THAT:- The adjudicating authority had given a finding that even though the services have been availed prior to 01.04.2011, that may not be the ground to allow these services as eligible input service. In this regard, it is found that it is an undisputed fact that such services have been availed by the appellants for the period upto 31.03.2011 for claiming as eligible input credit and not thereafter. The CBIC in its Circular No.943/4/2011-CX dated 29.04.2011 had clarified that the credit available on rent-a-cab service received before 01.04.2011 should be available as input credit if its provision had been completed before 01.04.2011even though the invoices could have been received subsequently i.e., after 01.04.2011 - Rent-a-Cab services received prior to 01.04.2011 in the present case is eligible input service, for taking CENVAT Credit.
Ship management services - transport services through waterways - sound recording service - HELD THAT:- The adjudicating authority had found that no invoice have been produced by the appellants before him to substantiate the nature of such service and its usage in provision of output service. Further, in respect of ‘short term accommodation service’, the adjudicating authority had found that such stays by the employees traveling for work are more in the nature of personal consumption. It is not required to examine the factual aspect as no invoices or supporting documents have been produced by the appellants for such services - these services are not eligible to be considered as eligible input service.
Denial of input credit on the ground that the address of the premises are not included in the registration certificate - HELD THAT:- The appellants had submitted a letter for inclusion of unregistered premises in the Service Tax Registration certificate by submission of their application for addition of such addresses to the jurisdictional authority on 17.10.2008. Inasmuch as the process of revising or updation of registered certificate with additional/new addresses for new branches/ office is a deemed approval procedure on intimation basis as priced under Service Tax Rules, 1944. Further, as the appellants is a regular assessee/ registrant with the Service Tax authorities, the input credit cannot be denied on such procedural lapses and that too for the failure to approving such amendments by the department within the prescribed time.
Conclusion - i) The impugned order is set aside, to the extent it has confirmed the Cenvat demand on the taxable services namely, Event Management & Mandap Keeper Service, General Insurance & Insurance Auxiliary Service and GTA Service and the appeal is allowed in favour of the appellant. ii) The Rent-a-Cab services received prior to 01.04.2011 in the present case is eligible input service, for taking CENVAT Credit. iii) The input credit cannot be denied on such procedural lapses and that too for the failure to approving such amendments by the department within the prescribed time.
Appeal allowed in part.
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2025 (3) TMI 11
Invocation of extended period of limitation under the First Proviso to Section 73 (1) of the Finance Act, 1994 - service tax not levied or paid due to fraud, collusion, willful misstatement, or suppression of facts by the petitioner - HELD THAT:- As is evident from the proposition which came to be propounded by the Supreme Court in P&B Pharmaceuticals and Larsen & Toubro [2007 (5) TMI 1 - SUPREME COURT], it was held that once necessary facts had already been brought to the notice of the authorities at different points in time, the same would clearly be a circumstance destructive of any allegation of the First Proviso to Section 73 (1) being applicable. The Supreme Court held that once the stand of the assessee was known and formed the subject matter of earlier notices, it would be impermissible for the respondents to allege suppression of facts. When those principles are applied to the facts of the present case, it becomes apparent that it was wholly impermissible for the respondents to resort to the First Proviso to Section 73 (1) of the Act.
As is ex facie apparent from a reading of the above, there is no material on the basis of which the allegation of a wilful suppression of facts is sought to be sustained. Regard must be had to the fact that the extended period of limitation cannot be justified by a mere reproduction or incantation of the language of the statute. A wilful suppression of facts, and which may have allegedly lead to a failure to pay tax, would have to rest on material which constitutes proof of the allegation levelled.
Conclusion - The invocation of the extended period of limitation under the First Proviso to Section 73 (1) was unjustified, as the facts were already known to the respondents from previous proceedings.
The impugned SCN is quashed - petition allowed.
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2025 (3) TMI 10
The Appeal Tribunal considered Service Tax Appeal No. ST/40660/2018 filed by M/s. Cognizant Technology Solutions India Private Limited against the Order-in-Appeal No. 415/2017 passed by the Commissioner of Central Excise (Appeals - II), Chennai. The appeal challenged the rejection of refund claims on the grounds of limitation and merits. The Appellant, engaged in providing IT services, sought refund of accumulated CENVAT credit for the periods from July 2009 to December 2009, August 2011 to October 2011, and January 2012 to March 2012. The Departmental appeal was allowed by the Commissioner, leading to the Appellant's appeal before the Tribunal.The key issues considered in the judgment are as follows:1. Whether the Appellant's refund claims were rightly rejected by the Commissioner of Central Excise (Appeals - II) on the grounds of limitation and merits.2. Whether the Appellant's transition of CENVAT credit to the GST regime rendered them ineligible for the refund claims.The Appellant argued that the transition of CENVAT credit to the GST regime made them ineligible for the refund claims and requested withdrawal of the appeal. The Department, represented by Shri Anoop Singh, highlighted procedural deficiencies in the appeal memorandum, emphasizing the absence of essential documents such as the original refund application and deficiency memo.The Tribunal, after hearing both parties, noted the Appellant's submission regarding the transition of CENVAT credit to the GST regime and their request for withdrawal of the appeal. Consequently, the Tribunal dismissed the appeal as withdrawn without expressing any opinion on the merits of the case.In conclusion, the Tribunal dismissed the appeal as withdrawn, considering the Appellant's transition of CENVAT credit to the GST regime, which rendered them ineligible for the refund claims. The judgment was pronounced on 28.02.2025.
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2025 (3) TMI 9
Classification of service - Works Contracts Service (WCS) or Construction of Residential Complex Service (CRCS) - HELD THAT:- Upto 1.7.2010, the classification of service would remain the same as declared by the service provider but however, post-1.7.2010 the tax would be chargeable under ‘Construction of Complex Service’ if it is service simpliciter and under ‘Works Contract Service’ if it is a composite works contract.
From the discussions in the respective Orders-in-Original, there is no dispute that (i) the nature of work was under composite contract and (ii) in respect of ongoing projects commenced prior to 1.6.2007 for which the appellant had already remitted the service tax under SCS, though no service tax in respect of a composite contract was leviable in view of decision in L&T Ltd. [2015 (8) TMI 749 - SUPREME COURT]. In any case, it is an admitted fact on record that during the periods under dispute, the appellant continued to remit the service tax under WCS and hence there was no reason for the Revenue not to accept the same. Hence in the light of decision of Larsen & Toubro Ltd, which has been followed by various Benches of Tribunal across India, the liability as under CRCS cannot sustain.
Since the issue of interpretation was involved, there cannot be any scope of to allege suppression or whatsoever and hence no penalty could be exigible and hence demand and penalties are set aside.
Conclusion - The liability for service tax under CRCS cannot sustain for the period before 1-7-2010.
Appeal disposed off.
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2025 (3) TMI 8
Dismissal of appeal holding the appeal to be time-barred in terms of proviso to (3A) of Section 85 of Finance Act, 1994 - HELD THAT:- The appellant has not come present to contest the findings nor any evidence contrary to these findings has been brought on records. The grounds of appeal are silent to this effect. Resultantly, there are no reason to differ from the findings as arrived by the Commissioner (Appeals).
The Hon’ble Supreme Court in Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT] has already held that the Commissioner (Appeals) has the power to condone the delay only up to 30 days after the expiry of 60 days from the date of receipt of the order in original. In the present case, the order in original dated 23.02.2015 was duly dispatched by the department to the appellant on the date of order itself and the same address on which the show cause notice was served to the appellant which was duly received. The presumption of service is very much attached to the said dispatch. Though, the presumption was rebuttable but the appellant has not produced any document on record to rebut the same. He has not even appeared in person to make any submission in rebuttal thereof.
There are no infirmity in the impugned order. The same is hereby upheld - appeal dismissed.
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2025 (2) TMI 1163
Confirmation of demand - imposition of penalty under section 78 of the Finance Act, 1994 - short-payment of Service Tax under Reverse Charge Mechanism (RCM) against import of certain services - irregular availment of Cenvat credit of input services - levy of penalty.
Levy of penalty - HELD THAT:- It is an admitted fact that the moment audit pointed out, they have paid the Service Tax along with interest. Therefore, the department was aware that they have already paid the Service Tax and interest as it was even recorded in the SCN. Further, on going through various grounds taken including revenue neutrality, it would be obvious that there were certain interpretational issues, which the appellant would have had while considering the payment of Service Tax or otherwise - in the absence of any cogent and positive evidence by the department about deliberate and intentional suppression or misstatement, the ground for invoking extended period cannot be sustained and on the same ground, the penalty can also be not imposed. Further, since these conditions are not established, therefore, the benefit under Section 73(3) cannot be denied and once the amount has been paid along with interest, there was no need to issue SCN. Therefore, on this count, the Order of the Commissioner imposing penalty, in the facts of the case, cannot sustain and accordingly, the penalty imposed by the Adjudicating Authority is set aside.
Short payment of Service Tax under Business Support Service by wrongly claiming deduction under Pure Agent clause - HELD THAT:- During the material time, Rule 5 provided for inclusion of reimbursable activities as part of service provided. As per Rule 5(1), as it existed during the material time, whether any expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs were to be treated as consideration for taxable service provided or to be provided and shall be included in the value for the purpose of charging Service Tax on the said service. Therefore, irrespective of the fact whether the expenditure or costs are incurred on reimbursable basis or otherwise, it was required to be included in the gross value in terms of Rule 5(1). However, Rule 5(2), which was subject to the provisions of Rule 5(1), certain expenditure and costs incurred by the service provider as pure agent of the recipient of service was required to be excluded from the value of taxable service, subject to fulfillment of certain conditions. The Adjudicating Authority has examined these conditions and came to the conclusion that the appellants have not fulfilled all the conditions enumerated under Rule 5(2) to justify the claim of deduction as pure agent.
The issue regarding inclusion of reimbursable expenditure or costs in the gross value of consideration received for providing taxable service or otherwise is no longer res integra in view of the judgment in the case of Union of India Vs Intercontinental Consultants and Technocrats Pvt Ltd [2018 (3) TMI 357 - SUPREME COURT]. Hon’ble Supreme Court at Para 21, inter alia, observed that Rule 5 brings within its sweep the expenses which are incurred while rendering the services and are reimbursed i.e., for which the service recipient has made payment to the assessee and as per these Rules, these reimbursable expenses also forms part of the gross amount charged.
Conclusion - The reimbursable expenses should not be included in the taxable value. Penalty imposed on the appellants for short payment of Service Tax and Cenvat credit demand set aside, as there was no evidence of willful misstatement or suppression.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 1113
Dismissal of appeal on the ground that appellant/assessee has not complied with the amended provision of Section 35F as applicable to Service tax matters by virtue of Section 83 of the Finance Act, 1994 - HELD THAT:- As could be seen from the impugned order passed by the learned Tribunal dated 13.05.2015, the appeal filed by the assessee on 15.11.2014 challenging the order-in-original dated 9.12.2009 passed by the Commissioner of Central Excise and Service Tax, Siliguri Commissionerate was dismissed on the ground that appellant/assessee has not complied with the amended provision of Section 35F as applicable to Service tax matters by virtue of Section 83 of the Finance Act, 1994.
The learned Tribunal while dismissing the appeal for non-compliance of the statutory requirement under Section 35F of the Central Excise Act, relied upon two decisions of the Co-ordinate Bench of the Tribunal in the case of AI Champdani Industries Murlidhar Ratanlal Exports Limited VS. CCE [2015 (2) TMI 421 - CESTAT KOLKATA]. The contention of the appellant/assessee is that the appellant’s right to file an appeal continues to be governed by the appellate provisions of the Central Excise Act and as they existed on the date of the issuance of the show cause notice dated 25.09.2008, 19.03.2009 and 10.08.2009 and the provisions of Section 35F substituted with effect from August 06, 2015 has no application to the case of the assessee.
This issue is no longer res integra and has been settled in the decision Hindustan Petroleum Corporation Ltd. Vs. UOI, [2015 (11) TMI 959 - KARNATAKA HIGH COURT] High Court, Karnataka High Court – Central Excise. Among several other issues which were considered in the said matter the issue as to whether the amended provisions of Section 35F would have retrospective operation was also considered and it was held 'all cases not covered under the second proviso, the main amendment and main amended Section 35F would apply irrespective of as to when the lis has commenced. The date on which the lis has commenced in each case has no bearing on the amendment as it has retrospective effect and even if the lis has commenced prior to the date of amendment and it had not been filed on that date, even in such a situation the amended Section 35F would apply and a pre-deposit as per amended provision would have to be made.'
Conclusion - Section 35F of the Act has retrospective operation and applies to all cases except those covered under the second proviso.
The substantial questions of law which were admitted in this appeal are answered against the appellant/assessee and the appeal stands dismissed.
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2025 (2) TMI 1112
Exemption from service tax - Export of Services or not - invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - suppression of facts or not - HELD THAT:- This Court finds that the Hon’ble Commissioner (Appeals) did not have the benefit of going through the decision in the matter of KONE ELEVATOR INDIA PVT. LTD VS. STATE OF TAMIL NADU [2014 (5) TMI 265 - SUPREME COURT (LB)] and developments prior to that in taxation specially from the point of view of limitation.
The matter therefore deserves to be remanded to Commissioner (Appeals) to consider the impact of KONE ELEVATOR INDIA PVT. LTD VS. STATE OF TAMIL NADU and see its effect on limitation based on the facts of this matter. In case it is found that now settled law, which earlier was following the predominance test between services and goods and later started following the aspect doctrine between service tax and taxability of goods clarified the position in relation to works contract around 2014 only, will need special consideration of Commissioner (Appeals).
The Learned Commissioner giving his decision will look into the decision of KONE ELEVATOR INDIA PVT. LTD and decide the limitation keeping in mind that the law came to be settled only around that time. Further, if appears that only some portion of limitation will survive if decided against the party, then question of penalty shall be accordingly decided. Party shall be free to support its stand on limitation with any case law or established facts.
Conclusion - Matter remanded to the Commissioner (Appeals) to consider the impact of the Kone Elevator India Pvt. Ltd. judgment on the limitation period and penalties.
Matter is remanded for Commissioner to pass a reasoned decision on limitation as well as to finally quantify the sustainable demand and penalty as per law - Appeal allowed by limited remand.
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