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Service Tax - Case Laws
Showing 161 to 180 of 30960 Records
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2025 (2) TMI 1111
Entitlement to Cash Refund - Denial of refund of Cenvat credit of service tax paid on Ocean Freight under RCM after onset of the GST regime - applicability of Section 11B of the Central Excise Act, 1944 read with Section 142(3) and Section 174(2)(c) of the CGST Act, 2017.
Rejection of refunds on the grounds that Cenvat credit ceased to exist on 01.07.2017 and therefore, the service tax so paid is not admissible as Cenvat credit post 01.07.2017 and that service Tax paid in financial year 2018-19 for pre-GST regime cannot be considered for refund under Section 142(3) of the CGST Act because it deals with the refund of the amount of Cenvat credit paid as on 30.06.2017.
HELD THAT:- Reference made to the decision of the CESTAT, Hyderabad in the case of CAD Vision Engineers Pvt Ltd. Vs. Commissioner of Customs & Central Tax (Appeals-I) [2024 (5) TMI 72 - CESTAT HYDERABAD] wherein, identical issue was raised and decided by considering the various decisions of the Tribunal as well as the High Court of Jharkhand in the case of Rungta Mines [2022 (2) TMI 934 - JHARKHAND HIGH COURT] by the Ld. DR.
It was held in the said case that 'the provision of Section 142(3) does not entitle a person to seek refund where no such rights occur under the existing law or new CGST regime in terms of provision of CGST Act and the rules framed and notification issued thereunder. Meaning thereby, Section 142(3) does not confer a new right which never existed under the old regime to the manner of giving relief if the person is not entitled under the existing law.'
Conclusion - There was no provision under the existing law or the GST Act that entitled the appellant to a cash refund of unutilized Cenvat credit. The appellant's claims for cash refunds of service tax paid under RCM post-GST implementation rightly denied.
Appeal dismissed.
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2025 (2) TMI 1110
Reversal of CENVAT Credit - whether on removal of inputs to the premises of job worker, the CENVAT credit availed thereon, is required to be reversed under Rule 3(5) of the Rules of 2004, or, there is no requirement of any such reversal, in terms of Rule 4(5)(a) of Rules of 2004, as claimed by the appellants? - HELD THAT:- In the case in hand, the ‘CENVAT credit availed Smart-Cards’ were sent by the appellants to the STB manufacturer for the purpose of testing, pairing etc.; and that upon completion of the said process and assembly of the Smart-Cards into the STBs, the same were delivered in the various warehouses, belonging to the appellants. Thereafter, such STBs, were supplied to the DTH customers as a part of CPE, thereby the appellants were able to provide the output service of Broadcasting to their DTH customers. Considering the factual matrix, the case of the appellants, squarely falls under the first proviso clause appended to sub-rule (5) of Rule 3 ibid inasmuch as the Smart-Cards removed to the STB manufacturer were ultimately used by the appellants for providing the DTH Broadcasting services to their customers. Therefore, the adjudged demands confirmed in the impugned order, by taking recourse to Rule 3(5) ibid, ignoring the proviso appended thereto, does not stand the legal scrutiny.
Rule 4(5)(a)(i) of the Rules 2004 mandates that CENVAT credit on inputs ‘shall’ be allowed, even if the inputs ‘as such’ are sent out to a job worker for further processing, testing, repairing, reconditioning or for carrying out for any other purposes, and it is established from the records, challans or memos or any other document, evidencing that the said inputs are received back within the prescribed time frame - it is evident from the accounting records that the total numbers of Smart-Cards sent by the appellants to the STB manufacturer (job-worker) were received back in the form of Viewing Cards, in their premises for providing the taxable service under the category of ‘DTH Broadcasting’ to their customers. The learned adjudicating authority has not examined the accounting records maintained by both the parties and simply denied the benefit provided under Rule 4(5)(a) ibid, holding the ground of non-maintenance of records.
The accounting records maintained by the appellants for sending of Smart-Cards to the job worker’s premises and their return together with the STBs to the warehouses of the appellants, after necessary processes, are adequate enough to validate the stand of the appellants that they had complied with the conditions laid down in Rule 4(5)(a) ibid. The Tribunal in the case of Southern Lubrication (P) Ltd. [2012 (1) TMI 106 - CESTAT BANGALORE] has held that the department cannot insist for reversal of CENVAT credit or cannot snatch away the rights provided under the CENVAT statute, if the assessee has duly complied with the laid down procedures therein.
On careful reading of the order passed by the Co-ordinate Bench of this Tribunal, in the case Non-Ferrous Industries [2002 (3) TMI 778 - CEGAT, KOLKATA], relied upon by learned Special Counsel for Revenue, we find that the said order was passed in context with Rule 57F(3) of the erstwhile Central Excise Rules, 1944. Since, the procedures prescribed under the said rule provided for regulating movement of the Modvat availed raw materials between the sender and a job worker were not followed, the Tribunal in the said case has rejected the appeal filed by the assessee, holding that compliance of the procedures laid down in the rule is not a mere technicality and the same has been prescribed with the objective of ensuring that the modvat availed goods sent from the factory were returned back from the job worker, after carrying out the required processes, so that the objective of the Modvat statute is achieved.
Conclusion - The case of the appellants squarely falls under the scope and purview of Rule 4(5)(a) of the Rules of 2004 and that for removal of the CENVAT availed Smart-Cards to the STB manufacturer, they are not required to pay equal amount of CENVAT credit availed on such goods.
There are no merits in the impugned order - appeal allowed.
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2025 (2) TMI 1109
Levy of service tax - payments made by M/s Modern Cargo Services Private Ltd to overseas logistics agents for handling cargo at the destination - inclusion of reimbursable expenses incurred by the service provider on behalf of the recipient in the taxable value - Scope for deploying of specific contingency in Finance Act, 1994, made operational by rule 2 of Service Tax Rules, 1994, Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 and Place of Provision of Service Rules, 2012 - HELD THAT:- The scope for valuation by service provider is limited to rule 3 of Service Tax (Determination of Value) Rules, 2006 as also rule 5 of the said Rules and the adjudicating authority could well have detailed its computation in terms of the said Rules without any contribution from the assessee. Even assuming that it was the responsibility of assessee to provide the information, which appears not in the light of stipulation that disaggregation of value should be in conformity with section 67 of Finance Act, 1994, the decision of the Tribunal in re Modern Cargo Systems Pvt Ltd [2022 (11) TMI 1544 - CESTAT MUMBAI] on non-taxability, in the light of the decision of the Hon’ble Supreme Court in re Intercontinental Consultants and Technocrats Ltd [2018 (3) TMI 357 - SUPREME COURT], of the domestic component puts to rest any lack of wherewithal for determination of the overseas component which alone remains in dispute. That tax liability does not arise on the service intended by section 65(105)(j) of Finance Act, 1994 when rendered outside India is not controverted in the impugned order. Consequently, the demand for the period upto 30th June 2012 does not sustain.
It would appear that a notice issued for a period prior to 1st July 2012 in the era of taxation of enumerated services, under the impression of overlap of ‘customs house agents service’ and ‘clearing and forwarding agents service’ on fact and law as also of impression of applicability to activity for which payment was effected to overseas entity, was sought to be deployed when the boundaries of service was no longer defined and a new framework for identifying rendition eligible for exemption from tax and procurement liable to tax was established in Finance Act, 1994 - The clear, and unambiguous, stand of the Central Government on handling of service of transportation of goods, which is central to the present dispute, was overlooked in fastening the liability for the period after 1st July 2012.
Conclusion - i) The upholding of demand of 11,97,047 for the period prior to 18th April 2006 in the impugned order is blatantly in breach of the legal provisions, stipulated judicially, that enable levy of tax on services procured from abroad only with effect from 18th April 2006. ii) The clear, and unambiguous, stand of the Central Government on handling of service of transportation of goods, which is central to the present dispute, was overlooked in fastening the liability for the period after 1st July 2012.
The impugned order is set aside to allow the appeal.
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2025 (2) TMI 1108
Non-payment of service tax on the amount of consideration and reimbursement of expenses received for his services during the period 2012–2013 - HELD THAT:- The short question to be answered as if service tax could be charged during the relevant period on the reimbursements of expenses received by the service provider and the answer is negative as per the judgment of the Supreme Court in Intercontinental Consultants [2018 (3) TMI 357 - SUPREME COURT] - The Supreme Court held that 'High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider ‘for such service’ and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service.'
Conclusion - i) Reimbursable expenses not calculated for providing taxable services should not be included in the valuation for service tax. ii) The Commissioner (Appeals) committed a grave error in not following the judgment of the Supreme Court and upholding demand of service tax by including the reimbursable expenses received during 2012–2013 in the value of taxable services.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 1060
Disqualification under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- Since there is no proof on record that there was any investigation on the date when the Petitioner applied to avail the benefit under the Scheme and the fact that the orders disqualifying the Petitioner which have been passed are also completely unreasoned and one-line orders, this Court is of the opinion that the Petitioner is entitled to relief. However, the scheme is no longer operational. Under these circumstances, it is directed that the declaration of tax liability of Rs. 11,26,937/- be accepted by the Department.
Subject to the said amount being deposited within a period of one month, the impugned show cause notice dated 31st December, 2020 shall stand quashed. If the said amount is not deposited within one month, the impugned show cause notice dated 31st December 2020 shall automatically revive and the Petitioner is permitted to file a reply to the same. The proceedings under the impugned show cause notice would then proceed in accordance with law.
Petition disposed off.
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2025 (2) TMI 1059
Validity of demand for service tax based solely on the data from Form 26AS - exemption to services provided by the appellant to local government bodies - applicability of Entry No. 12A of N/N. 25/2012-ST - invocation of Extended period of Limitation.
HELD THAT:- The entire show cause notice is based on the data received from Income Tax Department in Form 26AS. Revenue has not examined the data received by them to know whether any service was rendered by the appellant which attracted service tax. When the exemptions were claimed by the appellant before the original authority, he has simply ignored the submissions and confirmed the entire demand as raised in the show cause notice. Therefore, both show cause notices and order-in-original put together have solely relied on the information received in Form 26AS which is the amount received by the appellant.
The issue is no more res integra and it has been decided that only on the basis of data in Form 26AS, Revenue cannot issue show cause notice demanding service tax. Here it is noted that charging Section 66B of Finance Act, 1994 provides for levy of service tax at a specific percentage on the value of service. Section 67 of Finance Act, 1994 provides that where service tax is chargeable on a taxable service with reference to its value, then such value shall be the consideration in money charged by the service provider - it is clear that while determining value of taxable service under Section 67 ibid, such aspect as to the activities which are covered by negative list and which are mentioned in the definition of service as those which are not covered by such definition become important.
Conclusion - The demand cannot be raised merely on the basis of the data received from the Income Tax Department, without any corroborating evidence to substantiate that the value received were in connection with taxable service rendered by the Appellant.
The impugned order set aside - appeal allowed.
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2025 (2) TMI 1058
Non-payment of service tax - appellant had collected amount as service tax but did not deposit the same with the exchequer - failure to properly verify the facts - violation of principles of natural justice - HELD THAT:- The entire demand is based on the information available in profit and loss account and receipts as per Form 26AS. The nature of service rendered by the appellant and the quantum of amount received for rendering a particular service are absent in the proceedings. The value of service is to be determined in accordance with Section 67 and Service Tax (Determination of Value) Rules, 2006 and the same is absent in the entire proceedings.
The charging Section 66B of Finance Act, 1994 provides for levy of service tax at specific rate on the value of service. Section 67 of Finance Act, 1994 provides that where service tax is chargeable on any taxable service with reference to its value, then such value shall be the consideration in money charged by the service provider. Therefore, it is primarily important to determine the value on which service tax shall be levied on a specific percentage and such value should be value of taxable service. Clause (44) of Section 65B of Finance Act, 1994 has provided for definition of service and it has elaborately dealt with a list of activities which shall not be included in such definition. Further, Section 66D of Finance Act, 1994 has provided for negative list of services where activities covered by such negative list do not qualify to be taxable service. Therefore, it is clear that while determining the 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 the said definition, become important.
Therefore, for arriving at the amount of service tax not paid or not levied arriving at correct value of taxable service which has not suffered service tax needs to be determined - Further, there are services where entire or part of service tax is to be paid by service recipient. Further, there is a mega notification which provided conditional exemptions to various activities from payment of service tax. In addition, there are Service Tax (Determination of Value) Rules, 2006 which provide abatement to services such as works contract service. Unless all these aspects of Service Tax law are taken into consideration, the allegations of service tax not paid or not levied are not sustainable - No such exercise was done in this case.
Conclusion - The allegations of service tax non-payment or underpayment were not sustainable due to the lack of a comprehensive assessment of these factors. The matter requires detailed verification on all aspects.
The impugned order set aside - appeal allowed.
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2025 (2) TMI 1057
Eligibility to claim interest on the refund granted - refund was sought from the Haryana Housing Board - intere st denied on the ground that refund has been given within 90 days of the application - HELD THAT:- In this case, the refund has been sanctioned in time. As there is no delay in sanctioning the refund, there are no provisions in the statute to grant interest. Tribunal being a creature of statute cannot travel beyond the provisions of Law or statute.
It is found that the appellants have cited so many decisions on the issue of payment of interest. However, the facts of all the cases are different as all the cases involve delayed sanction of refund. The instant case is not about the delay in sanction of refund and consequential payment of interest. Therefore, the cases cited are not applicable as the facts and circumstances are different. Hon’ble High court also took cognizance of the peculiar circumstances of the case. In view of the same, the appellants have not made out any case for grant of interest on the amount refunded.
Conclusion - The refund was processed within the statutory period, and no interest is payable as per the statutory provisions.
Appeal dismissed.
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2025 (2) TMI 1056
No-payment of service tax - appellants were treating the services provided to various institutions like Administrative Training Institute, MCRHRD etc. as Educational Institutions and they have not paid the requisite Service Tax - Section 11B of the Central Excise Act, 1944.
Non-payment of Service Tax - HELD THAT:- The issue about the non-payment of Service Tax on various exempt services has already reached finality. The Department has quantified the same as Rs. 6,48,577/- which has been paid by the appellant before the issue of show-cause notice along with interest of Rs. 1,27,119/-. The appellant has not litigated this amount at the lower appellate stage. Since the amount has been paid along with interest before the issue of show-cause notice, there are no reason to apply Section 78 provisions to impose the penalty on them. The penalty of Rs. 6,48,577/- in respect of this demand set aside.
Quantification of CENVAT reversal - HELD THAT:- Revenue has taken the stand that the appellant is providing taxable service and they have paid Service Tax of Rs. 6,48,577/- towards the same after being pointed out by Audit team. In such cases, the appellant would be eligible for cenvat credit. Therefore, there are force in the submissions of the appellant that while quantifying the cenvat reversal, the turnover towards such taxable service (which was earlier treated as exempt by the appellant) have to be considered to come for the final quantification. For this purpose, the matter is required to be remanded to the adjudicating authority. The appellant is directed to file all their documentary evidence and calculation sheets to fortify their arguments as to what should be the quantification for cenvat reversal. The final quantification if held to be taxable has to be paid by the appellant along with interest. However, considering the facts of the case, the penalty on such Service Tax set aside.
Payment of excess Service Tax during the previous period - it is submitted that appellant has paid some excess Service Tax during the previous period and Department has to adjust the net Service Tax liability is concerned - HELD THAT:- There are no reason to entertain this submission of the appellant. In case they had paid more Service Tax during the earlier years, it was for them to quantify the same and to file a proper refund claim within the framework specified under Section 11B of the Central Excise Act, 1944. The adjudicating authority has correctly held that there is no statutory provision to carry out this kind of adjustment at the adjudication stage. Therefore, this prayer of the appellant is rejected.
Conclusion - i) The appellant had already paid the demanded Service Tax along with interest before the show-cause notice was issued, leading to the penalty under Section 78 being set aside. ii) The appellant should be eligible for cenvat credit. The matter was remanded to the adjudicating authority for a proper quantification of the cenvat reversal, considering the turnover of taxable services previously treated as exempt by the appellant. iii) The appellant's claim of having paid excess Service Tax in previous periods and seeking an adjustment was rejected by the Tribunal, emphasizing the need for proper refund claims under the Central Excise Act, 1944.
The matter is remanded to the adjudicating authority. The adjudicating authority should follow the principles of natural justice and pass a considered decision within 4 months from the date of this order - appeal disposed off by way of remand.
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2025 (2) TMI 1055
Liability of M/s Semi Conductor Laboratory, a Government of India entity, to pay service tax on the Franchisee Services provided to Eon Infotech Ltd for conducting VLSI education and training courses - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- The entire demand has been confirmed by invoking the extended period; it is also found that the additional commissioner has observed that the appellant being a part of Ministry of Space under Union of India, and as such there could have been no malafide intention to evade payment of tax on the part of their official, as none of the employee severally or jointly is benefited by evading the service tax, and none has any personal gain. The Ld. Additional commissioner has also observed that the discrepancy has come to the knowledge of the Department during investigation subsequent to Audit of the appellant conducted by the Departmental officers for the period 16.07.2001 to 31.03.2005 on 13/31.12.2005.
The Order-in-Original, the additional Commissioner has dropped the penalty under Section 76,77 and 78 by holding that malafide intention cannot be inferred on the part of the appellant which is a government of India undertaking. This finding of the Additional Commissioner has not been challenged by the Department and hence has attained finality; once the said finding has attained finality, therefore there is no reason for the Commissioner (Appeals) to come to the conclusion that there is a suppression of fact with intend to evade payment of duty and invokes extended period to confirm the demand.
Moreover, the entire facts were in the knowledge of the department because a lot of correspondences were exchanged during that time when the audit was conducted therefore, alleging suppression of facts with intend to evade duty cannot be alleged against government undertaking.
Conclusion - The Department was well-informed about the appellant's activities, and there was no basis for alleging evasion of duty against a government entity.
The entire demand is barred by limitation - the appeal is allowed only on limitation.
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2025 (2) TMI 1054
Classification of service - Manpower Recruitment and Supply Agency Service or not - assignment of employees by Overseas Entities to the Appellant during the period April 2008 to March 2013 - invocation of Extended period of limitation.
Whether the appellant is required to discharge Service Tax under Reverse Charge Mechanism for services received under the category of ‘Management Consultancy Services”, ‘Manpower Recruitment and Supply Agency Service’ during the relevant period involved in this appeal in the light of the judgment of Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd. [2022 (5) TMI 967 - SUPREME COURT]? - HELD THAT:- In the Cost Reimbursement Agreement for Assignment referred above between the Appellant and their Overseas Company reveals that the terms and conditions are more or less similar to the one referred to in para 3 of the judgment of the Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd - In the present case also, the appellant was in need of personnel for facilitating the business operations in India and the overseas company, which has such personnel, who possesses the requisite qualification and skill desired to employ such persons on exclusive basis and the overseas company has duly consented to depute such personnel to India. The deputed personnel while under employment with the appellant was not in any manner subjected to any kind of instruction or control or direction or supervision of the overseas company and required to report to the appellant’s management in India. They function solely under the control, direction and supervision of appellant and in accordance with the policy, rules, guidelines applicable to the employees of the appellant. The appellant shall have the sole right to take punitive steps against misconduct, negligence, fraud or unsatisfactory performance of work by the seconded personnel during employment with the appellant company and also have the right to terminate the employment. The details of the salary to be paid by the appellant to the assignees are enumerated in the said agreement.
A careful reading of the sample ‘Reimbursement Agreement’ and also the contract of the employment, letter of employment etc., there are no major difference from the facts stated in the judgment of Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd.’s case, where it was held that 'it is held that the assessee was, for the relevant period, service recipient of the overseas group company concerned, which can be said to have provided manpower supply service, or a taxable service, for the two different periods in question (in relation to which show cause notices were issued).'
Whether Extended period of limitation is invokable in confirming demand for the period from April 2008 to March 2013 and penalty is imposable when the service tax demand along with interest is paid before issuance of show-cause notice on ITSS and Commercial Training or Coaching Services? - HELD THAT:- The service tax is applicable on the amount paid by the Appellant to M/s. Tesco, Bangalore for providing manpower during the relevant period April 2008 to March 2013; however, it was also held by the Hon’ble Supreme Court in the said case that extended period of limitation cannot be invoked and hence, demand has to be computed for the normal period of limitation. Further, since the Appellant had paid the amount of service tax, on being pointed out relating to ITSS service and commercial training and coaching service, before issuance of show-cause notice with interest, there are no reason for invoking extended period of limitation against the appellant. Consequently, penalties imposed on all the appellants are unsustainable and accordingly, set aside.
Conclusion - i) The Service tax is applicable on the amount paid by the appellant for manpower supply during the relevant period, but only for the normal period of limitation. ii) The extended period of limitation could not be invoked, aligning with the Supreme Court's decision in Northern Operating Systems Pvt. Ltd.
Matter remanded to the adjudicating authority to redetermine the liability for the normal period of limitation - appeal allowed by way of remand.
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2025 (2) TMI 1018
Levy of service tax on the operation of air-conditioned buses - rejection of Sabkha Vishwas (Legacy Dispute Resolution) Scheme, 2019 - whether the petitioner was eligible for relief under the scheme based on the notices received and the rejection order? - HELD THAT:- The Karnataka High Court in M/S. JAGADISH ADVERTISING [2020 (8) TMI 788 - KARNATAKA HIGH COURT] had held that creation of a remarks column and assigning reasons for rejection by the Designated Committee, under the scheme, was not permissible as there was no such prescription in the statutory form. Consequently, the Learned Single Judge set aside the order of rejection as the committee did not have any authority to go into such reasons.
In the present case, the Designated Committee had set out the reasons for rejection as filing of bogus certificates and notices. This Court is of the opinion that, where applications had been filed by producing documents which are not genuine, the same can be rejected by the Designated Committee. Any other view, would mean that a person claiming the benefit of the scheme can come forward with any kind of document and the Designated Committee is precluded from going into the question of whether the said document is genuine or not. Such a view, would result in extreme situations.
Conclusion - The petitioner was not entitled to the benefits of the scheme due to insufficient evidence to support eligibility.
There are no reason to interfere with the order of rejection of the application of the petitioner and accordingly, the Writ Petition is dismissed.
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2025 (2) TMI 1017
Levy of service tax on reimbursement - reimbursable expenses received by the appellant as 'consideration' towards rendering of the taxable service of 'supply of manpower' - time limitation - HELD THAT:- The personnel engaged are the employees of the appellant company and the appellant is paying all salaries etc. to such employees. Only cost of salary of such employees are reimbursed by the JV on actual basis. Thus, it is observed that the whole arrangement between the appellant and the JV does not fall under the taxable service of manpower supply service as defined under rule 2(g) of the Service Tax Rules. Accordingly, the reimbursements received by the appellant cannot be considered as 'consideration' towards any taxable service.
The instant case is squarely covered by the decision of the Hon’ble Apex Court in COMMISSIONER OF CGST, DELHI SOUTH Versus BOEING INDIA DEFENSE PVT. LTD. [2023 (12) TMI 239 - SC ORDER] where it was held that 'The issues which arise in these appeals are covered by the judgment of this Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax.'
Time Limitation - HELD THAT:- In the instant case, the Show Cause Notice dated 16-09-2014 has been issued by invoking the larger period under proviso to the Section 73(1) of the Act, whereas the activity of the appellant is well within the knowledge the of the respondent when first Show Cause Notice, dated 09- 04-2013 was issued. Hence, the whole demand is barred by limitation.
Conclusion - i) The reimbursements received by the appellant cannot be considered as 'consideration' towards any taxable service. ii) The demand is barred by limitation.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 1016
Extended period of limitation - suppression of facts - intent to evade or not - differences between the Form-26AS and the Balance Sheet furnished by the appellant - HELD THAT:- In the present case, on the basis of third party data received from the Income Tax Department, there was a mismatch in the gross amount declared in the ITR/TDS on the services during the period of FY 2016-17. Further, due to portal glitches, certain errors were there in the service tax returns for the second half year period from 01.10.2016 to 31.03.2017; but at the time of statutory audit, the exact liability was indentified and entire amount was deposited. The information sought by the Revenue was supplied along with the relevant documents, but despite that, show cause notice was issued after inordinate delay of more than three years and by resorting to best judgment assessment, the demand was confirmed without looking into the documents/information supplied by the appellant.
Extended period of limitation - HELD THAT:- There is no allegation of suppression against the appellant either in the show cause notice or in the Order-in-Original & Order-in-Appeal. The Revenue has failed to establish any of the ingredients as required for invoking the extended period of limitation.
The impugned order is barred by limitation - Appeal of the appellant allowed only on limitation by setting aside the impugned order.
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2025 (2) TMI 957
Denial of claim of exemption by Notification No. 24/04-ST dated 10.9.04 - Voluntary training and coaching services - it was held by High Court that the training provided by the assessee in this case amounted to “vocational training” within the meaning of the term under Notification No. 9/2003-S.T. - HELD THAT:- There are concurrent findings of fact recorded which do not call for interference as the said findings cannot be said to be either perverse or illegal. The findings are rendered in facts which are peculiar to the respondent.
Appeal dismissed.
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2025 (2) TMI 956
Levy of service tax or VAT - deemed sale - activity of renting out cinematographic equipment by the appellant - transfer of "right to use" the equipment - HELD THAT:- Under Section 66 of the Finance Act, 1994, there shall be levied a tax at the rate of 12% of the value of the taxable services referred to in subclause (zzzzj) of clause (105) of Section 65 of the Finance Act, 1994. The “taxable service” means any service provided or to be provided to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipments and appliances. Therefore, where right of possession and effective control is transferred, then it will not be a taxable service. Consequently, if it is not a taxable service, then certainly service tax is not leviable under Section 66 of the Finance Act, 1994.
There is not only a transfer of right of possession, but also effective control. The order-in-original has proceeded on an erroneous interpretation of the provisions of this agreement that possession and effective control has not been transferred to the hirer. This conclusion of the adjudicating authority not gareed upon. It is clear from the agreement that the equipments have been supplied for hire and possession and effective control has been transferred to the hirer.
The possession and effective control has been transferred. If it is not so, why will the owner reserve a right to inspect the equipments as and when required. If the possession and effective control is still with the owner, he would not need the hirers' permission to inspect. If effective possession and control has not been transferred, why the hirer has to make it known to the owner regarding loss or destruction or damage, after such loss or damage occurs - If possession and effective control is still with the owner or has not been transferred to the hirer, why would the hirer make a statement that he has taken inspection of the goods and he is satisfied with the condition thereof and the owner shall not be liable for any defects.
Conclusion - There shall be a deemed sale where there is transfer of the right to use any goods for any purpose – whether or not for a specified period, for cash, deferred payment or other valuable consideration. From the documents and particularly from the clauses reproduced above, it is quite clear that there has been a transfer of the right to use equipments for valuable consideration. Even in clause 29A of Article 366 of the Constitution of India, the only requirement is there should be transfer of the rights to use the goods for valuable consideration. Factually, there has been.
The order-in-original cannot be sustained, as it was without jurisdiction. The same is quashed and set-aside - Appeal disposed off.
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2025 (2) TMI 955
Recovery of service tax with penalties - order issued without examining the relevant charging section of the Finance Act, 1994, particularly Section 66B - violation of principles of natural justice - HELD THAT:- In the present case, the adjudicating authority has held that the petitioner contravened the provisions of the Act and the Rules made thereunder with an intent to evade payment of service tax. So far as the case of Amadeus India Pvt. Ltd. [2019 (5) TMI 669 - DELHI HIGH COURT] is concerned, in the said case, the Hon’ble Delhi High Court was dealing with a case in which the SCN issued on 4th September, 2018 to the petitioner-company was challenged. The fact of the matter was that on 3rd October, 2018, the petitioner drew attention of respondent to the master circular dated 10th March, 2017 read with an instruction dated 21st December, 2015 issued by the CBEC in terms of which a pre-show-cause notice consultation was mandatory in cases involving demand of duty above Rs. 50 lakhs.
A reminder was again sent by the petitioner on 13th November 2018. When no response was received, the writ petition was filed in the High Court of Delhi on 13th December, 2018. It appears that Hon’ble Delhi High Court not only entertained the writ application but also rejected the contention of the respondent that since the SCN was preceded by a search that was conducted in the business premises of the petitioner and the petitioner also rendered itself liable for penal action ‘for suppression of facts and contravention of various statutory provisions with intent to evade payment of due service tax’ and other incidental levies, the SCN partakes of the character of an ‘offence related’ SCN and therefore falls within the exceptions carved out under para 5.0 of the master circular.
In the case of Cosmic Dye Chemical [1994 (9) TMI 86 - SUPREME COURT], the matter reached to the Hon’ble Supreme Court only after final adjudication by the Tribunal failed. The Tribunal in the said case had taken a view that regardless of intent, a mere suppression of facts or misstatement in the information statutorily required to be supplied to the Excise authorities attract the larger period of limitation.
Conclusion - All the issues which have been raised by learned counsel for the petitioner in the present writ application would essentially involve appreciation of facts emerging from the records which may be duly gone into by the appellate authority. It is not the case of the petitioner that he has no equally efficacious remedy, we would, therefore, refrain from exercising our extra-ordinary writ jurisdiction at this stage.
Application disposed off.
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2025 (2) TMI 954
Liability of sub-contrator to pay service tax, when main contractor has paid the service tax - Invocation of extended period of limitation - suppression of facts or not.
Whether in case the main contractor has paid the service tax, the appellants are required to pay service tax on the services rendered by the appellants being sub-contractor, or not? - HELD THAT:- Admittedly, the appellant is a service provider and they are required to pay service tax on the services rendered by them as clarified by CBEC Circular No.96/7/2007-ST dated 23.08.2007, wherein it has been clarified that for the services rendered by the sub-contractor, the sub-contractor is required to pay service tax - the appellant is liable to pay service tax as demanded.
Whether the extended period of limitation in the facts and circumstances is applicable or not? - HELD THAT:- Admittedly, without investigation, it could have been revealed that whether the appellants are providing man power services to the main contractor or not nor after investigation, it came to the notice to the Department that the appellant is providing man power services and entitled in not to pay service tax. It is a fact on record that the appellants did not take service tax registration also. In that circumstances, unless and until, there is a bonafide act on the part of the appellants, the extended period of limitation has rightly invoked.
Conclusion - The appellants are liable to pay service tax as demanded and that the extended period of limitation was rightly invoked.
There are no merit in the appeals filed by the appellants - appeal dismissed.
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2025 (2) TMI 953
Exemption from service tax - advisory services provided by the appellant to JCB UK - export of service under Rule 6A of the Service Tax Rules, 1994 or not - place of provision of service - HELD THAT:- In the instant case, it is not disputed that JCB (UK) is a company incorporated under the laws of United Kingdom and is located in United Kingdom. Therefore, the UK office of JCB would qualify as its business establishment where decisions pertaining to the company are taken. Consequently, the services rendered by the Appellant would be considered as received at the 'business establishment of JCB UK' in terms of Rule 2(i)(b)(i) of the POPS Rules. Accordingly, the ‘location of the recipient of service' for purposes of Rule 3 would be United Kingdom, which is outside the taxable territory of India.
The taxability of such transactions, where rendition of service resulting in business growth in India, stands decided in favour of the appellant by the Larger Bench of the Tribunal in the case of M/S. ARCELOR MITTAL STAINLESS (I) P. LTD (NOW KNOWN AS M/S. ARCELOR MITTAL DISTRIBUTION SOLUTIONS INDIA PRIVATE LIMITED) VERSUS COMMISSIONER SERVICE TAX MUMBAI-II [2023 (8) TMI 107 - CESTAT MUMBAI-LB] wherein the Tribunal held 'It is, therefore, clear that the recipient of service is the person at whose desire the activity is done in exchange for a consideration, i.e., the person who is obliged to make payment for the service. The recipient of service would, therefore, be a person at whose instance and expense the service is provided, whether or not he is the beneficiary of the service.'
From the above, in the context of the present case, it is noted that the recipient of the service is JCB, UK who is also the person at whose desire the activity is done in exchange of monetary consideration.
Conclusion - The services rendered by the appellant were exports, thus not subject to service tax.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 952
Taxable service - retained portion of the freight collected from the oil companies - It is common ground that the freight charged for such activity was either exempted from tax or excluded for taxability in the respective tax regimes before and after 1st July 2012 - HELD THAT:- The essence of ‘business auxiliary service’ which is the intended target of tax, is the presence of a provider of service between a service/product belonging to one and required by another. The retained amount has been sought to be taxed by the fitment of carriage of cargo belonging to oil companies by vessel belonging to others as acting on behalf of oil companies, from contract, and causing receipt of service from vessel owners to oil companies. From a perusal of the impugned order, it would appear that the adjudicating authority has examined the contract, at least of a particular customer with the appellant herein and corresponding contract of appellant herein with owner of a vessel under on flag of Liberia.
The appellant as well as the oil companies are located in the territory of India with consequential location of the ‘provider of service’, which, in this case, is the appellant would render the tax liability to arise within the taxable territory of India; this aspect was never in dispute. However, ‘address commission’ is amount contractually withheld by the appellant and, while that may arithmetically be the difference between that received as ‘charter charges’ and paid as ‘charter charges’, is also the amount payable by the ‘vessel owner’ to the appellant as ‘commission’ for recourse to those vessels. It would, therefore, amount to consideration paid by the overseas entity to the appellant and either recompense for provision of service which was not considered by the adjudicating authority or unaccounted payment. In the haste to fall back on Place of Provision of Service Rules, 2012 for fastening liability, this aspect appear to have been overlooked.
Conclusion - In view of the inadequacy in the impugned order and such inadequacy precluding us from determining the tax liability to be legal and proper a fresh finding within the framework of the show cause notice and the contention of the noticee along with appreciation of legal authority for charging of tax under section 66 of Finance Act, 1994 and section 66B of Finance Act, 1994 in the respective periods is warranted.
Matter remanded back to the original authority for a fresh decision.
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