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Service Tax - Case Laws
Showing 161 to 180 of 30277 Records
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2024 (10) TMI 820
Demand of service tax by denying the benefit of N/N. 40/2012-ST dated 20.06.2012 & N/N. 12/2013-ST dated 01.07.13 - Appellant provided services to M/s Samsung Engineering Co Ltd, Dahej, SEZ without proper authorization from competent authority in Form No.A-1/A-2 - HELD THAT:- During the reply to show cause notice the appellant have submitted form No. A-1 and A-2, despite that the adjudicating authority has confirmed the demand denying the exemption. Even though, the appellant have not submitted the form No.A-1 and A-2 at the relevant time but at later date the exemption cannot be denied. Moreover, this Tribunal has taken a view in various judgments cited by the appellant that so long provision of service in SEZ unit is not disputed the substantial benefit of exemption cannot be denied merely fornon submission of form A-1 and A-2. This Tribunal has taken a view that in such situation form A-1 and A-2 is procedural requirement and for which the exemption cannot be denied. This Tribunal has also taken a view since, as per the SEZ Act the supply of service to SEZ is otherwise not taxable and the provision of SEZ Act override any other Act, the denial of exemption in the present case is not justified.
The appellant are not required to pay service tax in respect of service admittedly, provided to SEZ unit. Therefore, the demand is not sustainable. Hence, the impugned order is set aside - appeal allowed.
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2024 (10) TMI 819
Dismissal of appeal on the ground of limitation contemplated under section 85 of the Finance Act, 1994 - order sought to be impugned was received by the appellant on 04.04.2018, but the appeal was filed on 06.06.2018 without a delay condonation application - HELD THAT:- The appellant does not dispute that the appeal was filed in the office of the Commissioner (Appeals) on 06.06.2018. The appellant also does not dispute that the order against which the appeal was filed was received by the appellant on 04.04.2018. The period of two months would expire on 03.06.2018 but the appeal, as noted above, was filed on 06.06.2018.
However, what needs to be noted is that the office of the Commissioner (Appeals) allotted a regular number to the appeal and information was also sent to the appellant for final hearing of the appeal without informing the appellant that the appeal was defective as there was a delay of 3 days in filing the appeal. The order passed by the Commissioner (Appeals) also does not mention that during the course of the hearing of the appeal, learned counsel for the appellant was apprised that there was a delay and the appeal was not accompanied by a delay condonation application.
It will, therefore, not be possible to sustain the order dated 28.09.2018 passed by the Commissioner (Appeals) - Appeal allowed.
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2024 (10) TMI 818
Failure to pay tax - construction of 'Residential Complex' - service provided by any seller in connection with the residential complexes till execution of such sale deed would be in the nature of self-service - HELD THAT:- The facts were verified by the Tribunal and thereafter it was held that in the instant case their exists an agreement for sale of land to the client and thereby making the client the owner of the land. This Tribunal also considered Board's Circular No.108/02/2009-ST dated 29.01.2009 and directed adjudication authority to consider the matter in view of the above Circular. Thereafter on remand, Commissioner has rightly followed the direction issued by this Tribunal and dropped the proceedings against the respondent. However, respondent proceeded with review and as per the Review Order, no reference is made to Board's Circular No.108/02/2009-ST dated 29.01.2009 as directed by this Tribunal. Moreover, the issue on merit is also squarely covered by large number of decisions including the decisions in M/S GARDENCITY REALTY PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE [2024 (7) TMI 477 - CESTAT BANGALORE]. Hence demand of service tax with interest and imposition of penalty on respondent is unsustainable.
The Appeal filed by the Revenue is dismissed.
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2024 (10) TMI 817
Wrongful availment of CENVAT Credit - CENVAT Credit on Service Tax paid under Reverse Charge Mechanism before 18.04.2006.
Payment of service tax made after 18.04.2006 - HELD THAT:- A specific provision has been inserted in Rule 3 of the CENVAT Credit Rules, 2004, allowing CENVAT Credit of service tax paid under Section 66A of the Finance Act, 1994. Hence, it is observed that the CENVAT Credit availed by the Respondent for the period after 18.04.2006 is legal and proper.
Credit availed on the payment of service tax made for the period prior to 18.04.2006 - HELD THAT:- The law relating to taxability of import services was not settled during that period. However, the Respondent decided to pay service tax to avoid any disputes. Once, service tax is paid by the Respondent on the import of services and the same is accepted by the Department, then the credit of the same cannot be denied.
The Respondent is eligible to avail the credit of service tax paid under Section 66A during the period from 2004-05 to 2007-08 - the impugned order is upheld - appeal filed by Revenue is rejected.
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2024 (10) TMI 722
Interpretation of statute - amended provisions of Section 35F and 35FF post-06.08.2014 - eligibility for interest sanctioned (on pre-deposit) - pre-deposit amount is related to appeal filed prior to 06.08.2014 - HELD THAT:- The entire amount was deposited by the appellant on 08.01.2015 and 17.01.2015 which has been claimed as refund by the appellant. There is no dispute in respect of the deposit made or the date of deposit. At least impugned order do not record any other date of pre-deposit. It is not even the case of revenue that these amounts have been deposited prior to 06.08.2014 i.e. the date of commencement of Finance (No 2) Act, 2014.
From proviso to the Section 35F, it is evident that the said section, categories the amounts deposited under Section 35F in two categories, (i) deposited prior to 06.08.2014, the date of Commencement of Finance (No 2) Act, 2014 (ii) deposited post 06.08.2014, the date of Commencement of Finance (No 2) Act, 2014. In respect of the amounts deposited post 06.08.2014, the provisions of the amended section 35 FF will be applicable and in respect of amounts deposited prior to 06.08.2014, the provisions of erstwhile section 35FF as it stood prior to date will apply.
It is settle principle of interpretation that the statute should be interpreted in accordance with the words used in the statute.
By circular no 1053/02/2017-CX dated 10.03.2017 Board has clarified that 'Where the appeal is decided in favour of the party/assessee, he shall be entitled to refund of the amount deposited along with the interest at the prescribed rate from the date of making the deposit to the date of refund in terms of Section35FF of the Central Excise Act, 1944 Since the said Circular has been issued without any qualification it would not be open to authorities subordinate to introduce qualification as has been sought to by the impugned order and not apply the said circular.'
There are no merits in the impugned order - appeal allowed.
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2024 (10) TMI 680
Recovery of service tax - appellant had been filing NIL ST-3 returns and not paid service tax - development of e- learning course content and supply of tutors for online tutoring, since the consideration is received in foreign exchange - Applicability of service tax on providing training under the Sant Shiromani Ramdas High Skill Development Programme’ by the State of Gujarat - Leviability of service tax on ‘other receipts’ - place of provision of service - export of service or not - extended period of limitation.
Online Information and Database Access or Retrieval Service - Service tax on development of e- learning course content and supply of tutors for online tutoring,since the consideration is received in foreign exchange - HELD THAT:- In the present case, the appellant has designed and developed the e-learning course content and supplied against consideration to their counterpart in USA who ultimately sold the same to other customers in USA. The customers in USA placed the same on websites allowing the users to access and retrieve data. Therefore, the services rendered by the appellant to M/s. Focus Care Inc, USA cannot fall within the scope of ‘Online Information and Database Access or Retrieval Service’. Consequently, it is an export of service since the recipient of the service is located in USA in view of the Rule 3 of the POPS Rules, 2012 read with Rule 6A of the Service Tax Rules, 1994. Similarly, also in the case of supply of tutors for online tutoring to M/s. Advance Tech Enterprises, UAE, the appellant merely provided tutors to M/s. Advance Tech Enterprises, UAE and the web platform is not hosted by the appellant and also does not belong to the appellant. The appellant also does not provide any access to the web platform which is provided by M/s. Advance Tech Enterprises to its students. It is not an automated web-based services which are completely automated and required minimum human intervention; but the online tutoring provided to M/s. Advance Tech Enterprises, UAE involves interaction between the tutors and the students.
In view of the judgment of the Tribunal in the case of M/S DEWSOFT OVERSEAS PVT. LTD. VERSUS CST, NEW DELHI [2008 (8) TMI 50 - CESTAT NEW DELHI], the said service cannot be considered as ‘Online Information and Database Access or Retrieval Service’.
Applicability of service tax on providing training under the Sant Shiromani Ramdas High Skill Development Programme’ by the State of Gujarat - HELD THAT:- The observation of the Commissioner that skill development scheme is not connected with NCVT / MES is incorrect which is also evident from the Publication of the Government of Gujarat under “Skill Development Initiative Scheme” under which training is given in Modular Employable Skill (MES) leading to certification by NCVT. Thus, the finding of the Commissioner is contradictory of the publication of the Government of Gujarat; hence cannot be sustained.
Leviability of service tax on ‘other receipts’ - HELD THAT:- The Commissioner’s finding that the appellant has not provided evidences also seems to be not based on record. Besides, the appellant has also placed Chartered Accountant certificate confirming the entry in the P&L Account relates to purchase and sale of fabrics during the relevant period. It is found that though the Finance Manager of the appellant had, at the very beginning of the investigation, disclosed the fact that ‘other receipts’ relates to purchase and sale of fabrics, the Department did not proceed further with the investigation to ascertain the veracity of the said claim - the learned Commissioner has rejected the said contention of the appellant on the ground that sales turnover of the fabrics was not declared in their VAT returns - there are no merit in the order of the learned Commissioner confirming the demand on ‘other receipts’ considering the same as rendering of services by the appellant.
The impugned order is set aside - Appeal allowed.
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2024 (10) TMI 679
Refund of service tax paid under protest - applicability of doctrine of unjust enrichment - concept of mutuality - time limitation - HELD THAT:- There is no dispute that the appellant have submitted a letter of protest, merely because it was submitted to the Superintendent, it cannot be said that the procedure was not followed. The objective of payment under protest is that in any form the appellant should express their intention of making payment under protest which is clearly complied by their letter of protest filed before Superintendent. Therefore, as regard the payment of service tax under protest, there are no fault and therefore, the refund claim is not hit by limitation.
As regard, the merit of the issue, the same has been settled by Hon’ble Supreme Court in the case of West Bengal vs Calcutta Club Limited [2019 (10) TMI 160 - SUPREME COURT] wherein it was held that on the Principles of Mutuality the amount collected from the members by the club would not be liable to service tax. Therefore, reliance of department to the case of Sports Club [2013 (7) TMI 510 - GUJARAT HIGH COURT] pending before Hon’ble Supreme Court does not exist.
The doctrine of unjust enrichment is not applicable in the present case - the appellant is eligible for refund of service tax paid by them along with interest in accordance with law - the impugned order is upheld - Revenue’s appeal is dismissed.
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2024 (10) TMI 628
Short payment or nonpayment of service tax - failure to provide cenvat documents to the Departmental Officers for verification - period 2007-08 to 2011-12 - Penalty - HELD THAT:- It is found that for confirmation of demand of Rs.4,20,162/-, it is submitted by the assessee that they have paid more than the service tax as alleged that they have short paid of service tax. To that effect, the assessee has produced the reconciliation statement, which shows that that against the short payment of Rs.4,20,162/-, the appellant has paid excess amount of Rs.4,62,251/-. Therefore, the demand of Rs.4,20,162/- is not payable by the assessee.
With regard to the appeal filed by the Revenue against the impugned order, it is found that the assessee has later paid the service tax on advance received on Customs House Agent Service and no service tax is payable by the assessee on reimbursable expenses in terms of the decision of the Hon’ble Supreme Court in the case of Intercontinental Consultants & Technocrats Private Limited [2018 (3) TMI 357 - SUPREME COURT] - there are no merit in the appeal filed by the Revenue and the same is dismissed.
Penalty - HELD THAT:- As the Appellant Assessee paid the excess amount, therefore, the demand of Rs.4,20,162/- on account of short payment of service tax is also not sustainable, the same is set aside and no penalty is imposable on the assessee.
The appeal filed by the assessee is allowed.
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2024 (10) TMI 627
Taxability - Business Support Services - share of collections received by the cinema owners - HELD THAT:- Movies are made by producers investing money and the producer acquires the copy right to the movies which, he then transfers to various distributors across the country for a consideration. The distributors, in turn, enter into agreements with various cinema/ theater owners and provide license/ right to screen the movie in their theaters. The Net Box Office collections, i.e. the proceeds of sales of tickets minus some expenses such as taxes are shared between the cinema owners and the distributors.
The question as to whether the share of collections received by the cinema owners can be taxed has been decided in negative by this Tribunal in INOX LEISURE LTD. VERSUS COMMISSIONER OF SERVICE TAX, HYDERABAD [2021 (10) TMI 893 - CESTAT HYDERABAD] where it was held that 'There is nothing on record to show that there is an agreement to share profits and losses. Only the collections are shared after some deductions. If, for instance, the total expenses incurred by the appellant in running the theatre is much more than its collections from the movie, it will incur losses. The distributor has no responsibility to share the losses. The distributor gets its share of the net Box Office collections even though the collections may be small. Hence the nature of the agreement here is one in which the distributor gives permission to screen the movies and gets a consideration. The quantum of consideration is not a fixed amount but a share of collections. The distributor does not assume any business risks in screening the movies. Therefore, we find no evidence whatsoever in this arrangement of forming an unincorporated joint venture.'
Since the Tribunal has already taken a view on this issue, there is no occasion to take a different view in this appeal which is on the self-same issue and is extension of the earlier proceedings.
The Order-in-Appeal is upheld and the appeal filed by the Revenue is dismissed.
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2024 (10) TMI 626
Demand of Service Tax made on the basis of tally data resumed by the department - cogent reasons have been provided for doubting the authenticity of the records or not - principles of natural justice - HELD THAT:- It appears that the appeal have been filed only by referring to the order in original and for the reason that the appellate authority has set aside the same. No specific reason has been stated as to why the findings recorded by the appellate authority are not tenable, except to effect that the case law referred by Commissioner (Appeal) were in relation to the clandestine clearances of goods and hence should not have been applied.
The Commissioner (Appeals) has decided the matter before him by holding that there are no corroborative evidences available on record to establish the case made out against the Respondent on the basis of second set of data retrieved. In absence of any such averment, there are no merits in this appeal. It is incorrect to say that the judgment relied upon by Commissioner (Appeals) while deciding the appeal, were in respect of the goods and not in respect of services.
There are no infirmity in the order of the Commissioner (Appeals) to this extent - Appeal filed by the revenue is dismissed.
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2024 (10) TMI 625
Refund of service tax paid under Reverse Charge Mechanism before migrating to GST regime - seeking refund of the amount on the basis that they were otherwise eligible to claim credit of the same, but in view of the introduction of GST, they were not able make use of said amount either in Central Excise/Service Tax or GST - HELD THAT:- Appellant has paid the service tax voluntarily under self-assessment. The tax is paid under reverse charge mechanism for the services received by them from the service providers. On perusal of the OIO, it is seen that the Adjudicating Authority has denied refund of credit holding that the service tax has been paid voluntarily and also that no credit is available in GST regime.
Section 174(2) of the GST Act says that the amended Act shall not affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Act or repealed Acts. It is clear that the liability, if any, under the erstwhile law of Finance Act, 1994 to pay service tax would continue even after the introduction of GST. Conversely, the right accrued under the said Act in the nature of credit available under CCR, 2004 also is protected.
In the case of ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] it has been held that transitional credit being a vested right, it cannot be taken away on procedural or technical grounds.
Section 142(3) of GST Act provides how to deal with claims of refund of service tax of tax and duty/credit under the erstwhile law. It is stated that therein that such claims have to be disposed in accordance with the provisions of existing law and any amount eventually accruing has to be paid in cash - In the present case, there is no allegation that the credit is not eligible to the Appellant. It is merely stated that tax has been paid voluntarily and therefore credit is not available under the GST regime. Though credit is not available as Input Tax Credit under GST law, the credit under the erstwhile Cenvat Credit Rules is eligible to the Appellant. Such credit has to be processed under Section 142(3) of CGST Act, 2017 and refunded in cash to the assessee.
In the present case, the claim is only for refund and not proceedings for assessment or adjudication. In such a scenario, only sub-section (3) of Section 142 will be attracted. Rejection of the refund claim by referring to sub-section (8) of Section 142 of CGST Act, 2017 is misplaced. For these reasons, rejection of refund is unjustified.
Rejection of refund claim cannot be justified. The impugned order is set aside - Appeal allowed.
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2024 (10) TMI 624
Liability for payment of service tax on sinking fund/interest free maintenance scrutiny - interest - penalty - extended period of limitation - HELD THAT:- The issue is no more res integra. In the case of KUMAR BEHERAY RATHI & OTHERS VERSUS CCE. [2013 (12) TMI 269 - CESTAT MUMBAI], the Tribunal held that collection of one time deposit on account of maintenance and repair of common areas is not taxable. The said decision of the Tribunal has been affirmed by Hon’ble Bombay High Court in THE COMMISSIONER OF SERVICE TAX, MUMBAI VERSUS M/S. SHRI KRISHNA CHAITANYA ENTERPRISES AND M/S. GREEN VALLEY DEVELOPERS AND KUMAR BEHERAY RATHI [2018 (2) TMI 1056 - BOMBAY HIGH COURT].
Interest - penalty - HELD THAT:- As both the demands are set aside on merits, the corresponding demand of interest and penalty also set aside.
Time Limitation - HELD THAT:- As both the demands are set aside on merits, it is refrained from dealing with the aspect of limitation.
Appeal allowed.
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2024 (10) TMI 569
Levy of service tax - Commercial Training or Coaching Centre - appellant is a learning centre in Sikkim and Manipal and engaged in providing various educational students programmers conducted by Sikkim Manipal University under Distance Education Programme as approved by UGC - period April, 2009 to October, 2013 - invocation of extended period of limitation - HELD THAT:- Considering the facts that on identical facts, another institute was also imparting education to the students through distance education programme approved by the University Grant Commission (UGC).
In the case of ACADEMY FOR PROFESSIONAL EXCELLENCE VERSUS COMMR. OF CGST & EX., HOWRAH [2019 (10) TMI 1328 - CESTAT KOLKATA], this Tribunal has held 'We find that the Sikkim Manipal University is a recognised university under UGC and is certainly not doing any business activity but providing education services and these facts are not in dispute. The similar services carried on the appellant, being identical services to that of the university, cannot by any stretch of imagination be classified under support services of business when the service provided by the University is not a business activity itself. We agree with the contentions raised by the appellant that the parallel institutes imparting degree courses recognised by law are clearly excluded from the service category of “Commercial Training or Coaching Centre”'
Thus, as the Sikkim Manipal University is a recognized University under UGC and is not doing any business activity, but providing education services and these facts are not in dispute. Therefore, the service provided by the University is not the business activity itself and is not liable to service tax under “Commercial Training or Coaching Centre” services.
The appellant is not liable to pay under the category of “Commercial Training or Coaching Centre” services. Accordingly, the demand against the appellant is not sustainable. Consequently, no penalty is imposable on the appellant.
The impugned order is set aside - appeal allowed.
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2024 (10) TMI 568
Levy of service tax - Automated Teller Machine [ATM] interchange fee (termed as commission) received by the State Bank of Hyderabad from SBI for deployment of ATMs owned by it in the shared network - notional consideration of the free ATM services provided by the State Bank of Hyderabad on its ATM to the other Associate Banks and SBI - invocation of extended period of limitation.
Levy of service tax on Automated Teller Machine [ATM] interchange fee (termed as commission) received by the State Bank of Hyderabad from SBI for deployment of ATMs owned by it in the shared network - HELD THAT:- It needs to be noted that neither the SBI nor the Associate Banks have raised any dispute and indeed the conduct of the parties does establish that there was an implied authority with SBI to discharge service tax liability of the Associate Banks. It is only when an enquiry was conducted by the department that the Associate Banks started discharging service tax on such interchange fees. Prior to that, SBI was discharging the service tax liability of the Associate Banks on the interchange fees. It also needs to be noted that even after the Associate Banks started separately paying service tax, the service tax liability of the SBG Banks remained the same. This demonstrates that the earlier arrangement that existed between the Associate Banks and SBI was merely for smooth settlement and did not have any service tax impact.
Payment of service tax by SBI is not disputed. What is disputed is the payment of service tax by SBI as an agent of the Associated Banks. It has been found that there was an implied authority with SBI to discharge service tax liability of Associated Banks. Once service tax was paid by SBI as an agent of the Associate Banks, service tax cannot be demanded on the same transaction again from the Associate Banks.
It further needs to be noted that while the show cause notice proposed demand of service tax on interchange fees received on the ground that interchange fee is commission from SBI for deployment of ATMs owned by Associate Banks in shared network, but the adjudicating authority has held that interchange fees is not a consideration for deployment of ATM, but is a consideration for the services provided to non-SBG Banks.
The demand of service tax on the ATM interchange fee (termed as commission) received by the Associate Banks from the SBI for deployment of ATMs owned by the Associate Banks in the shared network could not have been confirmed - demand set aside.
Levy of service tax on notional consideration of the free ATM services provided by the State Bank of Hyderabad on its ATM to the other Associate Banks and SBI - HELD THAT:- The SBG Switch was set up much prior to the levy of service tax on ATM services in 2006. At the time of setting up of the SBG ATM Switch it was a common understanding that none of the constituents of the SBG Banks would charge any fee on transactions between them. There is nothing on the record which may indicate that any change has taken place in the manner of operation of the SBG ATM Switch. The SBG Banks did not charge interchange fees for transactions. This can be said to be a condition of contract for the setting up of the co-owned ATM Switch and cannot be considered as a consideration.
In COMMISSIONER OF CGST & CENTRAL EXCISE MUMBAI EAST VERSUS EDELWEISS FINANCIAL SERVICES LTD [2022 (2) TMI 1359 - CESTAT MUMBAI], the department contended that service tax would be leviable on corporate guarantee given for subsidiary company without any consideration.
The demand cannot be sustained and is set aside.
Invocation of Extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act - HELD THAT:- It would be seen from a perusal of sub-section (1) of section 73 of the Finance Act that where any service tax has not been levied or paid, the Central Excise Officer may, within eighteen months from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice - The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word “eighteen months”, the word “five years” has been substituted.
In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT], the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since “suppression of facts” has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty.
It is, therefore, clear that even when an assessee has suppressed facts, the extended period of limitation can be invoked only when “suppression” is shown to be wilful with intent to evade the payment of service tax.
In the present case, there is, therefore, no suppression of material facts from the department, much less with an intent to evade payment of service tax. Post the enquiry by the DGGI in 2013, the Associate Banks started separately discharging service tax liability and it is stated that even with the changed methodology the service tax liability of SBG Banks remained the same. Thus, the earlier arrangement did not have any service tax impact. There is, therefore, no reason to doubt the contention of the Associate Banks that they were under a bonafide belief that the liability to pay service tax was being discharged by SBI as their agent.
The extended period of limitation contemplated under the proviso to section 73(1) Finance Act, therefore, was correctly invoked in the facts and circumstances of the case. The finding recorded by the Commissioner on the invocation of the extended period of limitation, therefore, does not suffer from any infirmity.
The five appeals filed by State Bank of India deserve to be allowed and are allowed.
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2024 (10) TMI 567
Levy of service tax - income earned by the noticee from the foresee transaction of selling allotment rights in respect of selling flats to buyers - amount charged in the name of demand survey - cancellation charges and miscellaneous income received by the noticees - Extended period of limitation - Penalty - interest.
Whether the income earned from selling allotment rights of flats is exigible to service tax? - HELD THAT:- On examining the terms and conditions under the MOU, it is found that the society had agreed to book 232 apartments, the sale price of which was payable by them. Further, Clause 6 of the MOU is relevant to be appreciated as it provides that in case the society fails to confirm the purchase of all the 232 apartments to the company within the time prescribed, the company will be entitled to forfeit the entire sum of Rs.11 lakhs, which has been deposited by the society as advance. This establishes that the appellant is acting on principal to principal basis being solely responsible for the sale of the flats and in the event of failure, are liable to bear the consequences.
In the entire transaction, there is no scope of ‘commission’ being paid to the appellant either by the builder or by the subsequent customers. The contention of the Revenue that the respondent receives consideration for the services by retaining a certain amount from the total amount paid by a customer to the builder and, therefore, the role is similar to the role of a Real Estate Agent, cannot be upheld. The profit earned by way of difference in the amount which the appellant paid to the builder and what is collected from the customers cannot really be termed as ‘commission’.
The definition of “service” specifically excludes the activities which constitutes a transfer of title in goods or immovable property, by way of sale, gift, or in any other manner. In view of our conclusion that the respondent is engaged in sale-purchase of flats which involves transfer of rights in immovable property, on the simple reading of the definition, the activity rendered by the appellant does not fall within the ambit of “services”. Consequently, even during the post-negative era, respondent is not exigible to service tax.
Following the decision in M/S SAUMYA CONSTRUCTION PVT. LTD. VERSUS CST AHMEDABAD [2013 (12) TMI 379 - CESTAT AHMEDABAD], the Principal Bench in M/S ESS GEE REAL ESTATE DEVELOPERS PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2019 (6) TMI 633 - CESTAT NEW DELHI], where the owners granted/assigned exclusive rights to the appellant to develop the property and to sell individual developed plots in a phased manner and as consideration for the same the owners were entitled to receive from the appellant the amounts specified in the agreement. Taking note of the Circular No. B–11/3/98-TRU dated 7.10.1998 clarifying that activity of actual construction of any building, carried out by builders or developers does not attract service tax levy as it is not a service within the meaning of the term “Real Estate agent” or “Real Estate Consultant”, it was concluded that as per the agreement, extensive construction and development had to be carried out by the appellant and it is thereafter the land or plots were to be sold for which the finances were also arranged by the appellant and, therefore, does not fall in the category of “Real Estate Agent”.
Service tax on amount charged by the respondent in the name of ‘Demand Survey’ - HELD THAT:- The Adjudicating Authority referring to the actual transaction on the basis of which the amount of Rs.5000/- was deposited by the customers along with the application form had dropped the demand. The findings arrived at is agreed upon, as the said amount is adjusted against the price of the property in the customers account on finalising the deal or is refunded to the customer in the event the property is not found to be suitable. It has been rightly noted that the department has accepted the said situation in the show cause notice.
Leviability of service tax on the ‘Cancellation Charges’ - HELD THAT:- There are no hesitation in agreeing with the findings arrived at by the adjudicating authority that the cancellation charges are in the nature of penalty levied on the buyers for not fulfilling the commitment in which no real estate agent service is being provided by the appellant and hence, no service tax is leviable thereon. Similarly, the Miscellaneous Income has been verified as per the ledger account where the miscellaneous income has been reflected as discount extended to them on the advertising service on which no element of service is involved.
Extended period of limitation - Penalty - interest - HELD THAT:- Since the issue on merits stands decided in favour of the respondent, there are no reason to go into the question of the applicability of the extended period of limitation or the imposition of penalty and interest.
There are no error in the impugned order and the same is, hereby affirmed - appeal of Revenue dismissed.
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2024 (10) TMI 566
Classification of services - rent a cab service or Transportation Services? - providing transportation services to employees of a client - Abatement under Notification no. 1/2006 dated 01.03.2006 - Benefit of Cum Duty value - Extended period of limitation - interest - penalty.
- HELD THAT:- A perusal of the service tax Registration Certificate reveals that the appellant was registered for provision of Cab operators’ service.
The appellant was renting vehicles viz., Tavera, Indica etc to his clients for their activities which included pick-up and drop facility to their employees. The consideration received is on kilometre basis. It is also noted that the charges were inclusive of all taxes, insurance etc. The rental for a long period of time such as 11 months. From the clauses of the agreement placed on record, it is clear that the appellant was renting out his cab to his clients and not providing point to point transportation, as claimed by him. The impugned order has carefully examined this aspect as well. The liability to tax arises when a rent-a-cab operator provides a vehicle to another person on rent and receives consideration.
In M/S. RS. TRAVELS VERSUS CCE, MEERUT [2008 (7) TMI 27 - CESTAT NEW DELHI], the Tribunal, relying on the decision in the case of EXPRESS TOURS & TRAVELS PVT. LTD. VERSUS COMMISSIONER OF C. EX., VADODARA [2005 (4) TMI 5 - CESTAT, MUMBAI], held that that the Government's intention, is to tax the provider of a service, which involves hire and renting of a cab formally for a long period. It was further held that the test for ascertaining whether an activity is covered by the entry "rent-a-cab operator service" is as to whether it involves giving a cab with or without driver to a client for a certain period of time for some consideration, which can be on per hour or per day or per month basis.
In the instant case, it is noted that the car had been hired on monthly basis to their clients, as per the Agreements on file. Accordingly, the impugned order is correct in holding that the appellant is liable to service tax in respect of the services rendered by him under the category of "rent-a-cab services".
In the present case, the RTA issues a special permit to the vehicle for operation as Contract Carriage. Therefore, in order to be eligible for the exemption under the said Notification, the appellant should satisfy the Contract Carriage conditions as enumerated above. The other conditions require the vehicles to ply in a specific route only, specified fare table is to be exhibited in the vehicle, a taximeter should be fixed etc. In the absence of any such compliance to the requirements stated above, the appellant cannot be considered eligible for the exemption as claimed by them.
Abatement under Notification no. 1/2006 dated 01.03.2006 - HELD THAT:- Appellant has submitted that they are eligible for abatement under Notification no. 1/2006 dated 01.03.2006, as they had not availed any Cenvat Credit and the benefit of Notification No. 1/2003-ST dated 20.06.2003 was not availed by them. It is found that this contention of the appellant has been rejected by the adjudicating authority as no evidence had been submitted by them in this regard. In view of the same, there are no infirmity in the impugned order - the appellant is not eligible for the exemption under Notification 25/2012-ST dated 20.06.2012.
Benefit of Cum Duty value - HELD THAT:- A perusal of the sample invoices submitted by the appellant indicates that the value charged is the gross amount. The Agreements with the clients also indicate that the rate was inclusive of all taxes. It is observed that in the case of TRIVENI UDYOG, SH SURENDRAMADHANI, AGARWAL & SONS, GOVIND BOORA BHANDAR, MAHESH BOORA UDYOG, SHANKER PRODUCTS & RAMESHWAR UDYOG VERSUS C.C.E. JAIPUR-I [2017 (6) TMI 699 - CESTAT NEW DELHI], it was held that for the goods already sold to the customer, it is an accepted principle that the assessee would be entitled to cum-duty benefit as the duty component now cannot be recovered separately from the customers. In other words, the sale price of the goods is to be treated as inclusive of the duty component. Consequently, the appellant should be given the benefit of cum-duty value.
Extended period of limitation - HELD THAT:- The show cause notice has recorded that the appellant had charged Service Tax from Mahindra Logistics vide the invoices issued to the said Company, but had not deposited the same to the Government treasury. The Ld. Counsel submitted that mere non-declaration does not amount to suppression of facts, and some positive evidence of intent to evade is to be evidenced by the Department. In this regard, the appellant had collected the tax from his client, but did not discharge his liability nor filed any returns. This clearly establishes his intent to evade - the extended period has been rightly invoked in the impugned order.
Interest - HELD THAT:- In the case of PRATIBHA PROCESSORS VERSUS UNION OF INDIA [1996 (10) TMI 88 - SUPREME COURT] the Supreme Court held that “Interest is compensatory in character and is imposed on an assessee who has withheld payment of any tax as and when it is due and payable’. Accordingly, the demand of interest in the impugned order is correct.
Penalty - HELD THAT:- The penalty imposed under Section 77(2) of the Finance Act, 1994 is upheld.
The impugned order is upheld - it is directed that the demand may be recalculated after extending cum duty benefit to the appellant. The penalty equal to the demand under Section 78 of the Act will stand modified to the extent of the revised demand.
Appeal allowed by way of remand for calculation of demand.
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2024 (10) TMI 565
Classification of service - whether the services provided by the appellant can be classified as “Business Auxiliary Service” and would, therefore, amount to export of services under the Export of Service Rules, 2005 and hence are exempt from payment of service tax? - penalty - interest - extended period of limitation.
HELD THAT:- From the assertion made by the appellant, there is no dispute that the goods manufactured by M/s FOSS are being supplied directly to the buyers by issuing the invoices directly. The appellant has not bought any of the goods from M/s FOSS. From the terms and conditions of the contract, it is found that the appellant had not provided any marketing services rather the characteristics of the services required to be rendered by the appellant related to Maintenance and Repair services. They had nothing to do with the marketing or sales promotion of the products of FOSS which they were directly indulging in. The commission received by the appellant in advance was for providing complete service support on the products in India and not in connection with the marketing or sales so as to fall under definition of “Commission Agent” under “Business Auxiliary Service” as defined under Section65(19) of the Act.
Accordingly, the services provided by the appellant are covered under commissioning and installation, repairing and maintenance service, commercial training, and coaching, testing and certification, IT software and Internet telecommunication services. Since the services have been provided in India and are used in India, as the products are in India, they are not covered under the export of service and hence are not entitled to exemption from the levy of service tax.
The submission of the learned Counsel for the appellant that the services provided by them are activities which are incidental or ancillary to the activity of sale of goods and hence are entitled to the shelter under the export of service rules has no merit as it is concluded that the appellant is not engaged in rendering marketing or sales promotion services. Once the main activity is out of net, the incidental or ancillary services would automatically fail.
The reliance placed by the appellant on the Circular No. 111/5/2009-ST dated 24.02.2009 is misplaced for the simple reason that the issue whether the benefit of export of services can be denied on the ground that these activities do not satisfy the condition ‘used outside India’ was with reference to ‘marketing’.
Time Limitation - HELD THAT:- The show cause notice was issued pursuant to the audit conducted by the Department, where it was revealed that the amount of commission received by the appellant has been taxed wrongly availing the exemption under the export of service rules. The suppression of the correct valuation of tax liability was detected by the Audit team and, therefore, the extended period of limitation has been rightly invoked under Section 73(1) of the Act.
Penaty - Interest - HELD THAT:- The penalty imposed on the appellant under Section 78 is upheld. Since on merits, it is held that the services rendered by the appellant cannot be treated as export services, they are liable to pay interest amount on the delayed payment of the service tax as ascertained by the Adjudicating Authority.
There is no merit in the submission that services rendered by the appellant under the contract are covered under the definition of “Commission Agent” under the “BAS” as per Section 65(19). Consequently, the services do not fall under the category of export of service under the Rules. The services provided by the appellant are not used outside India and, therefore, the appellant is not entitle to any exemption on account of export of services.
There are no reason to interfere with the impugned order and the same is affirmed - The appeal is dismissed.
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2024 (10) TMI 564
Rejection of appeal as time barred - non-payment of service tax for FY 2013-14 - no proof of service of Order-in-Original - violation of principles of natural justice - HELD THAT:- It is found apparent on record that there is no proof of service of Order-in-Original dated 11th September, 2019 to ever have been served upon the appellant. The Show Cause Notice was also not received by the appellant as submitted. His absence before Original Adjudicating Authority, to my opinion, is the sufficient corroboration for the fact that the Show Cause Notice was not received by the appellant. Also no proof of service is placed on record by the Department. Similarly, there is no proof of service of Order-in-Original upon the appellant.
In the present case, the date of receipt is 6th April, 2022. The appeal before Commissioner (Appeals) should have been filed on or before 5th June, 2022. Though the said section 85 of Finance Act has a proviso that the appeal can be presented within a further period of one month, however, the appellant has to satisfy the Commissioner (Appeals) that it was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months. No doubt the appellant has filed the appeal before Commissioner (Appeals) alongwith the application seeking the condonation of delay for filing the same beyond two months, but the same has not been considered as the one as required under the proviso to section 85 3A of the Finance Act. The findings in para 8 of the order under challenge are sufficient enough to reflect that the one month extension has been declined by Commissioner (Appeals).
In the light of the facts of the present case where the appellant could not appear before the original adjudicating authority for want of receiving any processes ever served upon him except that he received recovery notice for an amount of Rs.11,27,649/-, that too, much beyond the date when this demand was confirmed. Such circumstances warrant utmost diligence on part of the appellant to expedite the filing of the appeal against the order confirming such demand. No single effort has been brought to notice by ld. Counsel about such diligence ever exercised by the appellant. Irrespective the appellant is an uneducated person but ignorance of law is not a defence available to any litigant. The delay in such circumstance, that too, solely attributed to a part time Assistant is highly insufficient to be liberal towards the appellant. The ground of limitation though has to be dealt with liberally except in case of apparent negligence on part of the litigant. As observed, present is the case of absolute negligence.
There are no infirmity in the order of Commissioner (Appeals) while holding the appeal as being barred by limitation except that the reason for the purpose is modified. Irrespective of it to be an appeal filed within a period of three months, the delay beyond 60 days from the date of receipt of Order-in-Original dated 06.04.2019 is not been reasonably and sufficiently explained.
Appeal dismissed.
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2024 (10) TMI 505
Violation of principles of natural justice - opportunity of cross-examination - Evidentiary value of statements recorded under Section 14 of the Central Excise Act, 1944 - Case of appellant is that the statement of witness recorded u/s 14 of the Act before the gazetted Central Excise Officer during the course of investigation cannot be relied upon, unless procedure prescribed under Section 9D of the said Act is scrupulously followed - HELD THAT:- Section 9D of the Central Excise Act, 1944 deals with the evidentiary value of statements recorded before a Central Excise Officer in certain situations. Section 9D(1)(b) provides the conditions under which such a statement can be admitted as evidence. As regards cross-examination, we note that the when a statement is used against the appellant in proceedings, the courts have consistently held that the right to cross-examine the individual who made the statement is fundamental. If a person is available for testimony and their previous statement is being used as evidence, the other party must be given the opportunity to cross-examine the person. Failing to provide this opportunity would violate principles of natural justice.
The Delhi High Court in the caseJ & K CIGARETTES LTD. & ORS. AND M/S. GTC INDUSTRIES LTD VERSUS COLLECTOR OF CENTRAL EXCISE & ORS. [2009 (8) TMI 64 - DELHI HIGH COURT] clarified that if the person who made the statement is available, the person should be presented for cross-examination when requested.
It is also noted that the Courts have consistently recognised that if the department seeks to rely on the previously recorded statement of a person during an inquiry, the opposing party must be allowed to cross-examine that person in court to challenge the veracity of the statement. This provision ensures that any statement made in the absence of the accused (during the investigation phase) does not automatically hold evidentiary value unless the maker of the statement is subjected to questioning by both sides, thus adhering to principles of natural justice - In the instant case, it is noted that at the original stage of adjudication, the adjudicating authority considered the submissions made by the appellant and set aside the proceedings. There does not appear to be any request seeking cross examination of the persons whose statements were relied upon, in the show cause notice.
There is no evidence of the appellant seeking cross examination. However, this request has been made before this Tribunal. The cross-examination under Section 9D(1)(b) is a right granted to the appellant, which cannot be denied.
It is found appropriate to remand the matter to the Commissioner (Appeals) to re-adjudicate the matter, giving an opportunity to the appellant to cross examine all the witnesses whose statements have been relied upon in the impugned order and the show cause notice - the impugned order is set aside and the appeal is allowed by way of remand.
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2024 (10) TMI 456
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Seeking direction to Petitioner to make the payment as per Form SVLDRS-3 and to issue discharge certificate in Form SVLDRS -4 under sub-section (8) of Section 127 of the scheme - recovery of CENVAT Credit on the ground of wrongful availment of Input Cenvat Credit and wrong utilization for the payment of duties - HELD THAT:- It is noticed that though benefit of the scheme was availed by the petitioner, he could not make the payment within the time prescribed which was up to 30.06.2020. It is true that it was benevolent statutory scheme, but having cut-of date and not an on-going scheme. Thus, once the scheme was introduced as one time measure for specified period, any extension for payment would amount to modification of the Scheme, which is not permissible under the law.
In the case of M/S. YASHI CONSTRUCTIONS VERSUS UNION OF INDIA & ORS. [2022 (3) TMI 110 - SC ORDER] the Hon’ble Supreme Court has held 'It is a settled proposition of law that a person, who wants to avail the benefit of a particular Scheme has to abide by the terms and conditions of the Scheme scrupulously. If the time is extended not provided under the Scheme, it will tantamount to modifying the Scheme, which is the prerogative of the Government.'
In view of aforesaid decision of the Hon’ble Supreme Court, this court cannot defer date of payment and modify the Scheme. The Scheme being prerogative of the Government and since the petitioner had not abided by the terms and conditions of the Scheme -2019, there are no reason to interfere - petition dismissed.
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