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Service Tax - Case Laws
Showing 181 to 200 of 30277 Records
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2024 (10) TMI 455
Levy of penalty u/r 15 of CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 apart from appropriating the service tax and interest paid - irregularly availing and utilizing the CENVAT credit - suppression of facts or not - invocation of Extended period of Limitation.
HELD THAT:- The Appellants have taken and utilized the CENVAT credit to the tune of Rs.63,58,370/- in the months of April 2007 and November 2007 respectively prior to the payment of the service tax on the import of services availed by them on reverse charge basis. There was a delay of 3 days in respect of payment of service tax after taking credit in the month of April and 7 days in the month of November 2007. The dates of availing the CENVAT credit were 30.04.2007 and 30.11.2007 whereas the dates of actual payment of service tax on reverse charge basis were 03.05.2007 and 06.12.2007 respectively. It is noticed that on being pointed out, the Appellant have paid the applicable interest. So, we do not find any justification for imposing mandatory penalty for such a clerical mistake committed in availing the CENVAT credit before the payment of the service tax. It is not that the Appellant has taken the credit without payment of the service tax.
Extended period of Limitation - HELD THAT:- The grounds indicated in the impugned order would not indicate any mala fide intention on the part of the appellant to evade tax. Ingredients of suppression are not found and as such, we are of the opinion that invoking extended period is not justified.
The facts in the case of M & B ENGINEERING LIMITED VERSUS C.C.E. -AHMEDABAD-II [2024 (7) TMI 313 - CESTAT AHMEDABAD] are similar to the facts obtaining in the present appeal. In the above case, the Tribunal Ahmedabad has held that when the duty and interest are paid by the party during the course of the Audit, the assessee could not be further faulted with for its conduct to penalise them. Payment of duty with interest remove the stains of delay from the conduct of the party and bring back sparkles of bona fide conduct.
In this appeal, even there is no allegation that the Appellant has taken the CENVAT credit without payment of the service tax on reverse charge basis. There was only few days’ delay and the assessee has availed the service tax paid on reverse charge basis even before its payment. There is no allegation of fraud or suppression and the Appellant have paid the interest for prior utilisation of the CENVAT credit and interest was paid before the issuance of the Show Cause Notice on being pointed by the Audit.
The mandatory penalty imposed invoking the extended period under Rule 15(4) of CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 is not justified and so ordered to be set aside. However, the appropriation of the tax and interest paid not disturbed.
Appeal allowed.
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2024 (10) TMI 454
Levy of service tax - IPR Services or not - transfer of technical know-how - time limitation - HELD THAT:- The impugned order records the fact that during the course of audit, it was observed that M/s MGBPL had paid royalty fee and noncompetition fee to the appellants for the use of technical know-how developed by the noticee. On going through the MOU dated 30.06.1997 between the appellants and M/s MGBPL, it is clear that the transaction that has taken place is of sale and the consideration is mentioned under two Heads one being “Purchase Consideration on a slump price basis” and the second being “royalty for use of technical know-how” for the period 01.07.1997 to 30.06.2000. There is no mention of any Consultancy Service to be rendered by the appellants. That being the case, it will be incorrect to levy service tax on the same.
Tribunal in the case of Supreme Industries Ltd. [2013 (3) TMI 739 - CESTAT MUMBAI] held that consideration received towards the transfer of technical knowhow cannot be held to be consideration for the services rendered as Consulting Engineer.
The impugned order passed in revision is not sustainable and is liable to be set aside - Appeal allowed.
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2024 (10) TMI 453
Liability of Interest on cenvat credit availed by the appellant prior to registration - Clinical Research Management and Resourcing Services (CMR services) provided by the appellant qualify as export of service or not - suppression of facts or not - extended period of limitation - penalty.
Whether, cenvat credit availed by the appellant prior to registration requires payment of interest? - HELD THAT:- In the present case, the department has not challenged the eligibility of credit availed by the appellant on merits and there is no demand issued to the appellant alleging that the credit is ineligible or recoverable. In the absence of valid demand and confirmation thereof in an adjudication, demanding interest under Rule 14 of Cenvat Credit Rules, 2004 read with Section 75 of the Finance Act, 1994 is not permissible in law. Therefore, the demand of interest is not sustainable.
Whether, Clinical Research Management and Resourcing Services (CMR services) provided by the appellant qualify as export of service? - HELD THAT:- It is found that in the show cause notice as well as in the impugned order, the allegation is with regard to CRM services whereas the demand has been confirmed against the appellant for entire turnover comprising of Data Management services as well as CRM services, which is bad in law because the turnover for Data Management services was 58% of the total taxable value and the turnover for CRM services was to the tune of 42% of the total taxable value and therefore confirming the entire demand under CRM services is not tenable.
Further it is found that with regard to Data Management services, the department has accepted it as an export and has been granting regularly the refunds to the appellant, which is clear from the various refund orders placed on record. These refund orders have not been challenged and have attained finality which clearly establishes that Data Management services fulfill all the conditions of export as required in law.
The services performed by the appellant are in the nature of testing and analysis service, even then, it will amount to “export of service” because the said service partly performed outside India, to the extent of delivery of reports outside India and thus, qualifies as “export of service” under Export of Service Rules, 2005 as held in the cases COMMISSIONER OF SERVICE TAX VERSUS BA RESEARCH INDIA LTD. [2009 (11) TMI 213 - CESTAT, AHMEDABAD], M/S. APOTEX RESEARCH PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX BANGALORE-III [2022 (1) TMI 256 - CESTAT BANGALORE] and C3I CONSULTANTS INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX - HYDERABAD-II [2014 (3) TMI 736 - CESTAT BANGALORE].
Extended period of limitation - suppression of facts or not - penalty - HELD THAT:- The appellant has not suppressed any material facts because the appellant has been filing returns regularly for Data Management services and was getting the refunds, which clearly establishes that the appellant has not suppressed any material facts; therefore, invocation of extended period is bad and thus, penalty imposed under Section 78 of the Act is not sustainable. Similarly, penalty of Rs.2,42,20,838/- imposed under Rule 15(4) of the Cenvat Credit Rules read with Section 78 of the Finance Act, 1994 is not sustainable because once the availment of cenvat credit without registration is valid in view of the various case-laws, then in the absence of any demand for recovery of alleged cenvat credit, imposition of penalty equal to credit amount is not sustainable in law.
The impugned order is not sustainable in law and therefore, set aside - appeal allowed.
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2024 (10) TMI 452
Levy of service tax on membership fees as well as treatment charges of hazardous waste from the member industries - Business Support Service - appellant is established for disposal of effluents and solid hazardous waste and they accept only those effluents and wastes as directed by GPCB and dispose them off scientifically after providing treatment - HELD THAT:- As per the facts of the present case the appellant company is a consortium of various industrial units and engaged in the treatment of hazardous waste of all the member industries - This issue is no more res-integra as the same has been decided in favour of the assessee in VAPI WASTE & EFFLUENT MANAGEMENT CO VERSUS CCE, DAMAN [2012 (8) TMI 816 - CESTAT, AHMEDABAD] where it was held that 'the appellant is an association for the purpose of liability of service tax and eligible for exemption. Since appellant is eligible for exemption on merits, the appeal and the impugned order confirming the demand of duty and imposition of penalty is set aside.'
Thus, it is settled that any charges collected by a company towards the treatment of hazardous waste of the industries who are the members of the company who operates effluent treatment is not liable to service tax.
From N/N. 08/2017 –ST dated 20.02.2017 issued under Section 11C of Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 , the services by operator of common effluent treatment plant by way of treatment of effluent is exempted. Therefore, for period prior 01.07.2012 as well as post 01.07.2012, the service of effluent treatment of hazardous waste did not liable to service tax.
The impugned order is set aside - appeal allowed.
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2024 (10) TMI 451
Recovery of Refund of service tax allowed in respect of ‘Work Contract Services’ provided to PWD, the Government Organization - unjust enrichment - exemption under mega exemption N/N. 25/2012 dated 20.06.2012 - HELD THAT:- It has now been brought to notice that the previous Order in Appeal dated 30.08.2017 was earlier challenged by the appellant before this Tribunal and the said order stands set aside vide Tribunal final order no. 51682/2023 dated 22.12.2023. Consequent thereof the O-I-O dated 07.10.2016 which sanctioned the refund gets revived.
The present show cause notice was issued consequent to the order in appeal dt. 30.08.2017 which is not in existence in view of the said final order of this Tribunal dated 22.12.2023. Thus very basis for impugned SCN has been set aside this Tribunal has already held appellant eligible for refund of amount in question - Nothing is brought to notice by the department about appeal, if any, as would have been filed by the department against the said final order dated 22.12.2023.
The order arising out of present show cause notice i.e the order under the challenge (O-I-A dated 21.06.2018 ) Is hereby, is also not sustainable - Appeal allowed.
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2024 (10) TMI 385
Extended period of limittaion - suppression of facts or not - Short payment of service tax - construction of residential complex service - advances received from customers - demand confirmed on the portion of construction premises allotted to the landowner - demand confirmed in respect of the Siliguri project - HELD THAT:- The information regarding the details of the advances received by the Appellant were collected by the Department from the Balance Sheet and reconciliation statement submitted by the Appellant themselves. The Notice has been issued on the basis the differences found in the data furnished by the appellant in these two documents. Therefore, it is observed that there is no suppression of facts with intention to evade payment of tax established in this case. Further, it is observed that the Show Cause Notice in this case has been issued on 27.09.2019, which is beyond the period of thirty months from the date of filing of the Return by the Appellant i.e., 13.01.2017/14.01.2017. The entire demand confirmed in the impugned order is hit by the bar of limitation.
Since the Department has not brought any evidence on record to establish the intention to evade payment of tax on the part of the Appellant in the instant case, the demand confirmed by invoking the extended period of limitation is not sustainable.
The demand confirmed in the impugned order is not sustainable on the ground of limitation and accordingly, the same is set aside - Since the demand itself is not sustainable, the question of demanding any interest or imposing penalty does not arise - appeal allowed.
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2024 (10) TMI 384
Classification of service - Nature of activity - manufacture or business auxiliary service? - marketibility of the product - interest - penalty - HELD THAT:- The appellant has been undertaking the activity of segregation of metal and slag, sizing and packaging, as per the requirement of their customers. It is observed that the activity of sizing and packaging is an essential process, which makes the final product viz. Fe-Mn/Fe-Si-Mn/HCFC, marketable.
It is observed that in order to classify the activity as liable to service tax, the said activity should fall under any of the above sub-clauses. According to the ld. adjudicating authority, the activity undertaken by the appellant falls under sub-clause (v) of Section 65(19). However, the appellant has submitted that as per the definition cited above, ‘business auxiliary service’ does not include any activity that amounts to ‘manufacture’. According to the appellant, the activity undertaken by them amounts to ‘manufacture’ and hence it goes out of the purview of the definition of ‘business auxiliary service’.
It is required to be examined whether the activity undertaken by the appellant amounts to ‘manufacture’ or not, as defined under section 2(f) of the Central Excise Act, 1944.
It is found that the definition of ‘manufacture’ as provided under Section 2(f) is wide enough to cover all processes which create a change in the product whereby a new product emerges in the end, which is marketable. In the present case, the appellant is undertaking the work of sizing and packaging and these are essential processes required to make the product marketable. Accordingly, the activity undertaken by the appellant falls squarely within the ambit of the definition of ‘manufacture’ as defined under Section 2(f) of the Central Excise Act. Once the activity is held as amounting to ‘manufacture’, it is excluded from the purview of Service Tax as per the definition of ‘business auxiliary service’. Thus, the demand of Service Tax under the category of ‘business auxiliary service’ is not sustainable.
Since the demand itself is not sustainable, the question of demanding interest and imposing penalties does not arise.
The impugned order is set aside - appeal allowed.
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2024 (10) TMI 383
Refund of service tax paid under RCM - denial of refund claimed under Section 142(3) of CGST Act on the premise that the amount paid after audit objections was not eligible to be availed as credit under Rule 9(1)(bb) of the CENVAT Credit Rules, 2004 - levy of penalty - Transition of credit -
HELD THAT:- It is seen from the Rule that since tax is paid under RCM, the relevant provision is Rule 9(1)(e) ibid and not Rule 9(1)(bb), as evoked in the OIO and credit cannot be denied. In M/s Polygenta Technologies [2018 (2) TMI 804 - CESTAT, MUMBAI] a similar matter was examined by CESTAT Mumbai, where it was held that 'it is apparent that Rule 9(i)(bb) is applicable to supplementary invoice, bill or challan issued by provider of output service and Rule 9(i)(e) is applicable, inter alia, to a person liable to pay service tax under Rule 2(1)(d) of Service Tax Rules, 1994. It is apparent that the appellant is not service provider and therefore Rule 9(i)(bb) would not be applicable to them. The appellant is paying service tax on reverse chare basis in terms of Rule 2(1)(d) of Service Tax Rules, 1994 and therefore credit can be availed in terms of Rule 9(i)(e) of Cenvat Credit Rules. Since Rule 9(i)(bb) is not applicable to the appellant, the credit cannot be denied.'
Imposition of equal penalty under sec. 78 of the Finance Act, 1994 - HELD THAT:- Assumptions and presumptions cannot lead to a charge of suppression of facts and replace actual proof of intention to evade tax, more so when the appellant was eligible to take credit of tax paid on RCM basis instantly. Similarly holding that non-payment of Rs.3,750/- on expenditure incurred towards cafeteria charges viz. the license fee paid to the Revenue Department, Government of Tamil Nadu for running such cafeteria, amounts to evasion of duty merits to be rejected. The imposition of penalty must hence be set aside.
Transition of credit - HELD THAT:- The transition provisions contained under section 142(3) of CGST Act 2017 allows refund of any amount of CENVAT credit, duty, tax or interest paid under the existing law. As per section 140 of the GST Act, 2017, the appellant was eligible to transfer the amount as TRAN-1 credit. However, since the amount was paid on 31/07/2020 and the last date for availment as TRAN-1 credit was on 27/12/2017, the appellant was unable to carry forward the Cenvat Credit to the GST regime - since the duty was paid after the GST Act came into force, CENVAT Credit could not be availed in the appellants books before 01.07.2017. However, once the credit is found eligible, it is to be refunded in cash. In such a situation the appellant is eligible for refund as per section 142 of CGST Act 2017.
The impugned order rejecting the refund claims is not proper. The same is hence set aside. The appeal is allowed.
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2024 (10) TMI 382
Non-payment of service tax - scope of entry Sr. No. 19 A in the N/N. 14/2013-S.T, dated 22.10.2013 - Respondent has contended that it is providing services in relation to serving food or beverages only in the canteens maintained in the factories governed under the Factories Act, 1948 - HELD THAT:- In terms of the said notification, services provided for serving of food or beverages in a canteen maintained by the factory was exempted from payment of Service Tax. There is no ambiguity in reading the said notification. The show cause notice, in this case, has not disputed the fact that the factories, where the Respondent was proving the canteen facilities, were registered under the Factories Act, 1948 and that the canteens were having the air conditioning facility. Thus, the learned Adjudicating authority has rightly dropped the show cause proceedings initiated against the respondent.
Tthe issue arising out the present dispute is no more open for any debate, there are no merits in the appeal filed by the Revenue - appeal of Revenue dismissed.
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2024 (10) TMI 381
Nature of activity - service or sale - service tax on erection, commissioning, and installation charges - extended period of limitation - HELD THAT:- There is no dispute in the facts that the appellant have manufactured and sold Draw Texturizing Machines and the same was cleared in part as it was not practically possible to transport the entire machine in one truck. When any machine or equipment cannot be cleared duly assembled in one truck, the department has prescribed the procedure under Trade Notice No.MP/29/83 dated 23.03.83 for removal of such machineries. The appellant have scrupulously followed such procedure and intimation to that effect was also given to the jurisdictional department of Central Excise vide a letter dated 08.09.2011. Since, the machinery could not be cleared in one truck and the same was cleared in piecemeal in different trucks. It is obvious that the appellant is under obligation to do the final assembling and erection, installation of the same machine at buyer’s premises. The contract with the buyer is undisputedly for the sale of machine and no service involved.
It is fact on record that the appellant are registered with Central Excise department, discharging excise duty and filing the periodical return. The appellant were not charging any amount towards service the total value of the goods and so called erection are billed for manufacture and sale of the machine. As regard the supply in piecemeal machine, the appellant have intimated to the department as per the Trade Notice No.MP/29/83 dated 23.03.83. It was also disclosed that since, the machines are supplied in piecemeal, the same will be assembled and erected at customer’s site. Therefore, there is absolutely no suppression of fact with intent to evade the payment of duty. Accordingly, the extended period for demand was wrongly invoked. Hence, the demand for extended period is clearly time barred and the same is not sustainable apart from the merit of the case.
The impugned orders are not sustainable. Hence, the same is set aside - Appeal allowed.
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2024 (10) TMI 380
Non-payment of service tax on advances received - non-inclusion of value of materials supplied by the customers in the assessable value - recovery of service tax with interest and penalty - whether the appellant is required to pay service tax for rendering ‘commercial or industrial construction’ and ‘construction of complex services’, during the period in question i.e. 16.06.2005 to 31.03.2006? - HELD THAT:- The appellant explained that they have paid the service tax on the advances received during the period in question at the time of settling the final bills, which the learned Commissioner has recorded in the impugned order.
As far as the remaining demand of Rs.58,34,404/- is concerned, it is found that the issue is covered by the judgment of the Hon’ble Supreme Court in the case of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT]. Also, it is found that the appellant had undisputedly rendered ‘Works Contract Service’ during the relevant period as has been repeatedly mentioned in the reply to the show-cause notice and referred to in the impugned order. Further, it is found that this Tribunal in the appellant’s own case, for subsequent period 2006 to 2009, has concluded that the appellant has provided Works Contract service. In these circumstances, there are no merit in the impugned order.
The impugned order is set aside and the appeal is allowed.
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2024 (10) TMI 332
Direction to petitioner/Railway to reimburse Service Tax along with interest paid by the respondent to the Tax Authorities - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- It is an entrenched principle of Indian law that the courts cannot rewrite a contract between the parties. The said concept is an integral part of the fundamental policy of Indian law. Violating the same tantamounts to contravention with the fundamental policy of Indian law and being in conflict with the most basic notions of justice. Hence, such contravention affords a ground under Section 34 (2) (b) (ii), including its Explanations.
Section 28 (3) of the 1996 Act provides that while deciding and making an award, the Arbitral Tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction. Since the terms of the contract between the parties in the present case were unambiguous, contravention of the same by the Arbitral Tribunal tantamounts to a patent illegality within the contemplation of Section 34 (2-A) of the 1996 Act.
The Estimate, which was relied on by the Arbitral Tribunal to interpret the clause, is neither a part of the contract nor an agreement between the parties but, as discussed above, is an internal document of the petitioner/Railway for arriving at the estimated bare price of the work. Furthermore, the estimate deals only with the wages of the workmen in terms of the Minimum Wages Act and does not constitute the rates to be quoted by the individual bidders. The estimate merely provided the minimum rates, since if rates were quoted below the same, it would imply that the workmen would be deprived of their legitimate dues under the Minimum Wages Act. It was for the bidders to take into account such minimum price and add to it their own estimates of taxes payable, in the light of Clause 2.2 which mandates that the rates must include all taxes and duties etc. which are applicable to the work done under the tender. Hence, the reliance by the Arbitral Tribunal on the Estimate to interpret Clause 2.2 was patently perverse and illegal, vitiating the impugned award itself.
There is no question of the authorities picking and choosing, since Clause 2.2 is universal in its application to all prospective bidders in the tender.
Petition allowed.
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2024 (10) TMI 331
Levy of service tax - Commercial coaching or training services - claims of the writ petitioner of being exempt from such levy having been negatived by the respondents - HELD THAT:- By virtue of Finance Act, 2010 an explanation came to be inserted in Section 65 (105) (zzc) with retrospective effect from 01 July 2003 clarifying that the word ‘commercial’ would mean training or coaching services being provided for consideration and uninfluenced by whether such training or coaching was conducted with a profit motive. By virtue of a Notification no. 33/2011 dated 25 April 2011 exemptions came to be granted to coaching and training centres and which would have led to the grant of a certificate, diploma, degree or any other educational qualification recognized by law.
While a testimonial, degree or diploma which can be said to be recognized in law is a concept by now well settled and could only mean degrees, diplomas or educational qualifications granted or conferred by an authority duly empowered and recognized in law to award such a degree, diploma or grant that educational qualification, the Board by way of abundant caution had duly clarified these aspects in terms of its Circular dated 28 August 2012. The phrase ‘recognized by any law’ was thus clarified to encompass courses which were approved or recognized by any entity established under a Central or State legislation, including delegated legislation, for the purpose of granting recognition to any educational course.
Quite apart from IILM University and under whose aegis the petitioner had asserted to be functioning had been deprived of its character and status, the CESTAT found that the petitioner had never been recognized in law to grant a degree or diploma. The petitioner had also failed to establish or prove that it was either affiliated with a University or a deemed University it had also woefully failed to establish that it was itself enabled by statute to grant the degree or diploma - the CESTAT came to conclude that the appeals preferred by the writ petitioner lack merit while those instituted by the Department were liable to be allowed.
Petition dismissed.
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2024 (10) TMI 330
Levy of service tax - whether the activity of letting out shops/AARATHS and other premises for shops and canteen, banks, etc. is liable to service tax? - HELD THAT:- The issue has been decided in Krishi Upaj Mandi Samiti, New Mandi Yard Vs. Commissioner of Central Excise and Service Tax, Alwar [2017 (5) TMI 1465 - CESTAT NEW DELHI] The Tribunal referring to the Education Guide dated 20.06.2012 issued by the Board that any service provided by such bodies, which is not directly related to the agriculture and agricultural produce will be liable to tax e.g. renting of shops or other properties.
On the main issue whether the appellant is liable to pay service tax stands decided and in that view, the appellant is liable to service tax for the normal period w.e.f. 1.10.2012 to 31.03.2014, which is the post-negative period, as the activities undertaken was for the furtherance of business or commerce which does not fall in the Negative List provided under Section 66D.
The provisions of the N/N. 33/2012-ST dated 20.06.2012, under which the appellant is claiming exemption it is mandatory to follow the conditions for evaluating the threshold limit by arriving at the “aggregate value” of one or more taxable services provided by the service provider from one or more of the premises and not separately for each premises or each services. Further, Clause (viii) in clear terms sets out that the “aggregate value” of the taxable services rendered by the service provider from one or more premises shall not exceed Rs.10 lakhs in the preceding financial year. It is not permissible to pick and choose from the notification what is beneficial and discard what is against the party. The Notification has to be considered in entirety and the party claiming the benefit therein has also to satisfy the conditions enumerated therein.
The Apex Court in Krishi Upaj Mandi Samiti [2022 (2) TMI 1113 - SUPREME COURT] has observed that it is a settled law that the notification has to be read as a whole and if any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of the notification and exception or exempting provisions in the taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard. Further, it was observed that in a taxing statute, it is the plain language of the provisions that has to be preferred and where the language is plain and is capable of determining a defined meaning, strict interpretation is to be accorded.
In the impugned order, the Commissioner (Appeals) arrived at a finding that the total receipts of the appellant during the subsequent financial years from 2009-10 to 2012-13 were above the threshold limit for the exemption and hence they are not eligible to SSI exemption benefit - there are no infirmity in the impugned order and the same is hereby affirmed.
Appeal dismissed.
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2024 (10) TMI 329
Levy of service tax - amount received towards liquidated damages - period from July 2015 to June 2017 - declared service or not - HELD THAT:- The Adjudication authority has no reason to confirm demand of service tax on the amount received by the Appellant as compensation for short lifting of electricity, since it was not on account of any obligation to tolerate an act, hence is not a service under Section 66E(e) of the Finance Act, 1994, Hence, the impugned order deserves to be set aside.
The impugned order is set aside with consequential relief - Appeal allowed.
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2024 (10) TMI 328
Levy of service tax on reimbursement amount based on Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 - Whether the reimbursement amount can be subjected to levy of service tax for a period prior to May, 2015? - extended period of limitation - suppression of facts or not.
HELD THAT:- Section 67 of the Finance Act was considered and explained by the Supreme Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT]. The appellant therein was providing consulting engineering services. It received payment not only for the services provided by it but was also reimbursed for the expenses incurred by it on air travel, hotel stay, etc. It paid service tax on the amount received by it for services rendered to its clients but did not pay any service tax in respect of expenses incurred by it which were reimbursed by the clients - the service tax is on the “value of taxable services” and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the service tax. It is for this reason that the Supreme Court observed that the expression “such” occurring in section 67 of the Finance Act assumes importance. It is in this context that the Supreme Court in paragraph 26 observed that the authority has to find what is the gross amount charged for providing “such” taxable services and so any other amount which is calculated not for providing such taxable service cannot be a part of that valuation as the amount is not calculated for providing “such taxable service”. This, according to the Supreme Court, is the plain meaning attached to section 67 of the Finance Act either prior to its amendment on 01.05.2006 or after this amendment and if this be so, then rule 5 went much beyond the mandate of section 67 of the Finance Act. The Supreme Court, therefore, held that the reimbursement amount cannot be treated as “gross amount charged” as that is not a “consideration” for rendering the service.
It needs to be noted that it is only w.e.f. 14.05.2015 that reimbursable expenditure or cost would form part of valuation of taxable service. However, in the present case, the transaction were made before 14.05.2015. Thus, inclusion of the reimbursable cost in the value of taxable service cannot be justified.
Extended period of limitation - suppression of facts or not - HELD THAT:- In the present case, the Commissioner observed that the appellant had received certain amount as reimbursement but deliberately avoided payment of service tax on the said amount with an ulterior motive to defraud the government. The Commissioner also observed that the appellant had abused the facility of self-assessment. It is for this reason that the Commissioner found that the appellant had suppressed facts with intention to evade payment of service tax.
The Commissioner, therefore, could not have confirmed the demand of service tax for the extended period of limitation as the requirements of the proviso to section 73(1) of the Finance Act are not satisfied. This part of the order of the Commissioner, therefore, also deserves to be set aside - the impugned orders dated 10.10.2012, therefore, deserves to be set aside and are set aside - appeal allowed.
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2024 (10) TMI 327
Non-payment of service tax - Renting of Immovable Property Services - Applicability of service tax for the pre and post negative list period.
Demand prior to 30.06.2012 (pre-negative list period) - HELD THAT:- For the pre-negative period, this issue stands decided in the case of COMMISSIONER OF CENTRAL EXCISE, NASIK VERSUS DEORAM VISHRAMBHAI PATEL [2015 (9) TMI 790 - CESTAT MUMBAI], the Tribunal held 'It can be seen from the above reproduced findings of the first appellate authority, the conclusion arrived at is very correct, as co-owners of the property cannot be considered as liable for a Service Tax jointly or severally as Revenue has taken to identify the service provider and the service recipient for imposing service tax liability, which in this case, we find our individual. The conclusion arrived at by the first appellate authority is correct and he has confirmed the demand raised on the respondents by extending the benefit of Notification No. 6/2005-S.T. We do not find any reason to interfere in such a detailed order.' - the demand prior to 30.06.2012 does not sustain.
Demand for the period post 01.07.2012 (post-negative list period) - HELD THAT:- The Department has not submitted any evidence to the contrary. In the Finance Act, 1994, Section 65B(51) defines taxable services as “any service on which service tax is leviable under Section 66B”. Section 66B of the Finance Act, 1994 provides that there shall be levied a tax on all services except those mentioned in negative list (Negative list has been defined under Section 65B(34) as services listed in Section 66D of Finance Act, 1994) and provided or agreed to be provided by one person to another in the taxable territory and collected in the manner prescribed. In the instant case, it is noted that post 01.07.2012, the firm was not functional, and the rental agreements are in the name of the individual partner, with regard to the property held by them jointly. So, there cannot be a case of service to oneself. Hence, they are not liable to service tax - The decision in the case of the CADILA HEALTHCARE LIMITED VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [2021 (4) TMI 1157 - CESTAT AHMEDABAD] relied upon by the Ld AR deals with the remuneration received by the Director of the firm for providing other independent services, which is not the case of the appellant.
The impugned order is liable to be set aside and is set aside. Consequently, the appeal is allowed.
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2024 (10) TMI 326
Interest claim - refund of amount deposited under protest without paying interest - HELD THAT:- Undisputedly appellant is entitled to interest on the amounts refunded to him after the dispute was finally determined in their favour by the order of this tribunal. However, the interest as per these orders would necessary be governed by the provisions of section 11BB and should be paid after expiry of three months from the date of receipt of the application for refund and not from the date of deposit as has been held by the original authority in the orders dated 09.07.2019 and 18.07.2019. Even if it is held that appellant was entitled to refund of interest as per section 35 FF then also the interest could not have been paid from the date of deposit, in view of the Proviso to section 35FF, which provided that in respect of the amounts deposited prior commencement of Finance (No. 2) Act, 2014 the provisions as contained in erstwhile section 35FF shall apply.
In the present case the refund applications for refund of amount deposited under protest were made on 21.05.2019 (received on 29.05.2019) and 21.06.2019 (received on 21.07.2019) and the refunds were paid vide order dated 11.06.2019 and 15.07.2019 i.e. within a month of the receipt of the application. Thus, appellant would not be entitled to any interest as per the section 11BB or Section 35 FF of Central Excise Act, 1944.
Appeals are dismissed.
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2024 (10) TMI 324
Denial of cash refund of accumulated cenvat credit, paid post introduction of GST, towards Service Tax on Reverse Charge Mechanism - period from April 2016 to June 2017 - HELD THAT:- While accepting contention of the learned counsel for the Appellant that refund of such Cenvat Credit under section 142(3) in cash is admissible, as for the Judicial President of this Tribunal including that of the Larger Bench constituted on the issue in case of M/s. Brose India Automotives Systems Private Limited [2022 (5) TMI 480 - CESTAT MUMBAI], there is no express contrary finding available in those two judgments referred by learned authorised representatives for the Department as in both the cases, the findings were to the effect that express provision though was not available in the existing Act (Now erstwhile Excise Act and Cenvat Credit Rules, 2004) for cash refund, Assessee is eligible to take cenvat credit amount so paid under the Service Tax Rules and even in the Ganges International Pvt. Ltd judgments [2022 (3) TMI 544 - MADRAS HIGH COURT] it was also directed that such provision as available under section 142(3) could be treated as a dire necessity and by invoking “Doctrine of Necessity” relief can be granted to the Appellant in such kind of quasi-judicial/administrative matter.
In the existing (now-pre-existing) law, whether refund in cash provision is available or not, this non-abstanate clause permitted refund admissible to the assesse in respect of Cenvat Credit only through payment of cash after expiry of transitional provision. Appellant is therefore, entitled to get the refund in cash as claimed with applicable interest as per law.
The order passed by the Commissioner (Appeals), Central Tax, Central Excise & Service Tax, Raigad is hereby set aside - Appeal allowed.
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2024 (10) TMI 290
Maintainability of appeal - appropriate forum - Appellant is a juridical person or not - Appellant can be treated as a “trust” or not - it was held by High Court that 'The CESTAT has recorded in the impugned order that, since the trust is treated as juridical person under SEBI, there is no reason why it should not be treated as a juridical person for taxation.' - HELD THAT:- There are no merit in these Special Leave Petitions.
SLP dismissed.
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