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Service Tax - Case Laws
Showing 21 to 40 of 30277 Records
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2024 (11) TMI 792
Denial of eligible interest on the amount refunded - order of Commissioner (Appeals) has been challenged on the ground that the appellants were entitled to be paid interest at the rate of 12% per annum on the total amount of the refund from the date of its deposit till the date of its actual payment - HELD THAT:- As per the Article 300A of Constitution of India also, no person shall be deprived of his property, save by authority of law. They cannot be deprived of the same and is entitled for benefits arising out of said property. Hence interest accrued on the amount in question during the period it remained deposited with the department is the property of the owner of the amount i.e. the appellant herein.
We draw our support from the decision of RHL Profiles Ltd [2017 (4) TMI 1252 - ALLAHABAD HIGH COURT] has held that once the confiscation has been set aside, confiscation of seized currency has been set aside and the fact is that the Department has earned interest during the period the currency was retained by it, it was held that payment of interest could not be denied merely for the reason that there is no express statutory provision.
Bombay High Court also in the case of Union of India Vs. M P Desal [2019 (3) TMI 550 - BOMBAY HIGH COURT] has held that amount seized in cash by the authorities is to be refunded along with the interest. Though in this case the rate of interest was held to be simple at the rate of 8%.
There already has been decisions of Sony Pictures Networks India Pvt. Ltd. [2017 (5) TMI 864 - KERALA HIGH COURT] wherein the decision of Hon'ble Apex Court in the case of Kuil Fireworks Inds [1997 (9) TMI 105 - SUPREME COURT] is relied and it was held that rate of interest while refunding the amounts has to be 12% of the amount refunded.
We hold that the appellants are entitled to claim the interest on the amount as has been refunded in their favour that too to be paid from the date of payment of initial amount till the date of its refund.
As the amount in question was not deposited under Section 35F, however is akin to predeposit for the reasons as discussed above. It is clear that Section 11B and 11BB of Central Excise Act will not be applicable to the amount in question, the denial of the interest on the appellant’s amount is held to be unjustified. Resultantly, we hold that the said proviso is not applicable to the given set of circumstances.
We therefore hold that the findings are liable to be set aside. Section 35FF itself prescribes the rate of interest in the range of 5% to 36% when these provisions is read in the light of the above provisions and the decisions with respect to the rate of interest. However, we observe that the Central Government vide Notification No. 12/2023- Central Tax (Rate) dated 19.10.2023 has fixed the rate of interest @ 6%. Resultantly, we hold appellant to be entitled for getting interest on the amount of refund from the date of payment till the date of its disbursement, however at the rate of 6%. Hence, we hereby set aside the order under challenge. Appeal allowed.
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2024 (11) TMI 791
Service tax under the category of “Franchise Service” or “ Declared service” - invocation of the extended period of limitation - appellant challenged the show cause notice on the ground that it is vague and does not specify the taxability of the given transaction so as to make the DTMPL liable to pay service tax - as submitted that for the period 1.4.2012 to 31.3.2017, the activities undertaken by DTMPL is not liable to service tax under the category of ‘declared service’ under Section 66E(e) of the Act, as DTMPL is not under any obligation to do an act or to tolerate an act.
Allegation of the Revenue is that the activity undertaken by DTMPL of enrolling the members falls under the category of “Franchise Service” for the period during the Pre- Negative Era and as “declared services” under Section 66E(e) for the period Post-Negative Era - HELD THAT:- To bring within the ambit of ‘service tax’, it is necessary to analyse the specific factors or the principles, which would constitute that services. The basic principle for a service to be taxable is that it is necessary that there should exist a service provider and a service recipient relationship between the two parties, which, in the present case is missing.
From the impugned order, we find that there is no mention of any services, which DTMPL was liable to perform having received the amount, which has been taken to be as a consideration and in absence thereof, DTMPL cannot be termed to be a ‘Service Provider’, providing any services to the members /agents. Though the receipt of membership fee by DTMPL can be regarded as income but it cannot be treated as a consideration for rendering any services. In other words, the amount of Rs.5,500/- received by DTMPL is not a consideration in lieu of any services.
We are of the view that the impugned order does not show any consideration whether the activity performed by DTMPL satisfies the basic factors to be classified as “Franchise Services” or as “declared services” under Section 66E(e) of the Act. The findings as recorded by the Adjudicating Authority are insufficient to impose levy of service tax in the present case.
We are afraid to say that the Adjudicating Authority have virtually copied the entire show cause notice and merely quoted the provisions of law but failed to apply its mind to the applicability of the provisions of the Act defining the two services with reference to the actual activity undertaken by DTMPL. In fact, it is not even evident as to who is the service provider or who is the service recipient and what is the nature of the services, for which the consideration is being paid, if any. Instead of repeating the show cause notice in extenso, the Adjudicating Authority being the Original Authority ought to have passed the order on a proper appreciation of the fundamentals of levying the service tax.
We find that the proper course is to remand the matter back to the proper Adjudicating Authority to decide the matter afresh.The impugned order is, therefore, set aside and the appeals are allowed by way of remand.
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2024 (11) TMI 790
Refund claim - input services have been used in the export of output service - Assessee registered under Management Consultant, consulting Engineers, Manpower recruitment agency, maintenance or repair service. Towards un utilized CENVAT credit - Adjudicating authority rejected refund claim as held that the assessee had not produced any evidence in support of the utilization of the input services for the export service, there is no documentary evidence with regard to the use of the services, not submitted the rent agreement in respect of the input service provider, there is no correlation with the FIRC and export invoices ..etc.
HELD THAT:- It is an admitted fact that Appellant has made claim the refund of CENVAT credit for the services rendered by them for export of goods. While considering the issue in the matter of M/s Eveready Industries India Ltd [2016 (4) TMI 688 - MADRAS HIGH COURT] as held once an application for refund is allowed under Section 11B, the expression ‘erroneous refund’ appearing in sub-section (1) of Section 11A cannot be applied. If an order of refund is passed after adjudication, the amount refunded will not fall under the category of erroneous refund so as to enable the order of refund to be revoked under Section 11A(1). One authority cannot be allowed to say in a collateral proceeding that what was done by another authority was an erroneous thing. Therefore, the question of law has to be answered in favour of the appellant/assessee.
Also in MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. [2011 (9) TMI 450 - KARNATAKA HIGH COURT] held in the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law.
Considering the facts and circumstances as stated above, the Commissioner appeals rightly passed impugned order considering the statutory provision and decisions of the appellate authorities. Appeal dismissed.
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2024 (11) TMI 726
Wrongly availement of Input Tax Credit (ITC) - Scope of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- Section 120 introduced the scheme. It was duly notified to come into force. Pursuant thereto by circular dated 27th August, 2019, Central Board of Indirect Taxes and Customs elaborated on it. Petitioner relies on declaration of law made by the Supreme Court in Merino Panel [2022 (12) TMI 453 - SUPREME COURT] that circulars issued by revenue are binding on it.
The circular says, dispute resolution and amnesty are the two components of the scheme. It is aimed at liquidating the legacy cases locked up in litigation at various forums, whereas the amnesty component gives an opportunity to those who have failed to correctly discharge their tax liability, to pay the tax dues. The circular also says, it may be appreciated that ambit of the scheme is very wide.
Section 125 (1) in the Finance Act provides for eligibility of persons to make a declaration under the scheme. There has been no submission made to effect petitioner was or is ineligible to have applied under the scheme. The allegation against petitioner is, it did not make the deposit. That is the effect of forms SVLDRS-2 and 3. So in considering petitioner’s contention, of application of the scheme to it and liquidation of the legacy tax demand in the prior period by adjustment of its ITC, we have to adjudicate whether it is entitled to issuance of discharge certificate SVLDRS-4.
There has been demonstration that the exact amount demanded under the SCN, petitioner claimed to have paid by adjustment of the ITC. Contention of revenue is omission of required deposit of the wrongly availed ITC, as had been intimated by issuance of SVLDRS-2 and 3. Only then can there be determination of final amount payable under the scheme.
There is no dispute that petitioner was entitled to the accumulated credit. Application of it for utilisation to pay tax on outward services was disputed by revenue as ineligible or partially so. Going by clause (c) in said circular dated 27th August, 2019, petitioner’s contention fits as a certain matter, where tax was paid by utilizing input credit and the matter is under dispute. The circular requires that in such cases, the tax already paid shall be adjusted by the designated committee at the time of determination of the final amount payable under the scheme. In the circumstances revenue is bound to cause the adjustment, which will leave balance tax to be paid, under the scheme, as nil.
Writ petition is allowed. Opposite party no.1 is directed to issue SVLDRS-4 within four weeks of communication of certified copy
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2024 (11) TMI 725
Non discharge of service tax liability on Manpower Recruitment Agency Services, Business Auxiliary Service & Maintenance and Repair Service - whether the appellant had rendered Manpower Recruitment and Supply Agency Services & Business Auxiliary Service during the period in question i.e. from 16.06.2005 to 31.03.2006 and 09.07.2004 to 31.03.2006 respectively?
HELD THAT:- We find that the Commissioner(Appeals) has mechanically endorsed the order of the adjudicating authority and not discussed as to how the appellants are liable to discharge service tax under the category of Manpower Recruitment and Supply Agency Services & Business Auxiliary Service as per the definitions provided under the Finance Act, 1994.
The order appears to be cryptic and unreasoned one, which cannot be sustained in view of the principle laid down in Shukla & Brothers [2010 (4) TMI 139 - SUPREME COURT] - Therefore, the impugned order is set aside and the appeal is remanded to the learned Commissioner(Appeals) to pass a well-reasoned order.
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2024 (11) TMI 724
Admissibility of exemption from service tax on the services of maintenance provided to Railway site under FCI - FAA held that since the activities of the Appellant are provided for use of FCI and hence are not Railways for public carriage of passenger or goods. Therefore, the exemption under Notification No.24/2009-ST dated 27.07.2009 as amended is not available
HELD THAT:- We find that the issue is no more res integra and has been decided by the Tribunal in the case of KVR Rail Infra Projects Pvt. Ltd. [2019 (5) TMI 376 - CESTAT HYDERABAD] wherein the demand of service tax under Commercial or Industrial Construction Service or Works Contract Service for the period from October 2004 to June 2007 and August 2007 to October 2009 respectively for construction of railway sidings/tracks cannot sustain and require to be set aside.
Thus demand of service tax is set aside and penalty imposed under Section 78 is also set aside. The appeal filed by the Appellant is partly allowed in the above terms.
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2024 (11) TMI 723
Refund of service tax paid on the input services - Claim of Notification Nos. 52/2011-S.T. dated 30.12.2011 and 41/2012-S.T. dated 29.06.2012 - HELD THAT:- The appellants in this case had availed the insurance service for insuring the building, plant and machinery, storage of raw material etc. As regards storage & warehousing services, the same were used/utilized by the appellants for procuring and movement of raw materials etc.
Similarly, with regard to courier agency service, the conditions itemized in the table had not been fulfilled by the appellants inasmuch as the IEC code, nature of courier, name and address of recipient etc. were not forthcoming from the documents submitted for verification. Since, the said disputed services were not used / utilized for exportation of the goods, in our considered view, rejection of the refund claim by the lower authorities is in conformity with the Notification dated 30.12.2011.
The Notification dated 30.12.2011 was superseded by Notification No. 41/2012-S.T. dated 29.06.2012 and effect such supersession, inter alia, is that in the case of excisable goods, taxable services that have been used beyond the place of removal, for the export of such goods, should be considered for grant of refund/rebate of service tax paid thereon.
It is an admitted fact on record, that the appellants are the manufacturer of excisable goods and for that purpose, got themselves registered with the Central Excise authorities. Insofar as grant of refund/ rebate of service tax is concerned, the notification dated 29.06.2012 (supra) has provided that the services used beyond the place of removal (i.e., the factory gate, in the case of a manufacturer of excisable goods), should alone be considered and not otherwise. The manner of use/utilisation of the disputed services, as discussed in the respective orders passed by the lower authorities, makes the position amply clear that such use/utilisation are not beyond the place of removal and also the appellants had not submitted adequate documentary evidences to prove the case in their favour, that they are falling under the scope and purview of such notification, entitling them for grant of refund/rebate of service tax paid on such services. Since, there is no ambiguity in reading of the contents in the notifications referred supra, we are of the considered view, that there is no infirmity in the impugned order passed by the learned Commissioner (Appeals).
The law is well settled that the wordings used in the exemption notification have to be strictly interpreted and the benefit provided therein should be available to the claimant, upon fulfilment of the conditions itemised therein.
We find that for non-fulfilment of the conditions prescribed in the earlier notification No.14/2009-S.T. dated 07.07.2009 (rescinded vide notification No.52/2011-S.T. dated 30.12.2011), in the case of Magsons Exports [2013 (4) TMI 523 - CESTAT NEW DELHI] has rejected the appeal filed by the assessee.
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2024 (11) TMI 722
Entitlement for abatement of 70% from the gross value of the purpose of paying service tax on ocean freight or otherwise - Lower authorities have confirmed the demand of differential duty attributed to the abatement portion on the ground that the appellant have not fulfilled the condition for availing the exemption under Notification No. 26/2012-ST dated 26.06.2012 (Serial No. 10).
HELD THAT:- Levy of service tax itself on ocean freight was held ultravirus in the case of SAL Steel Ltd. [2019 (9) TMI 1315 - GUJARAT HIGH COURT] therefore, for this reason when the entire service tax is not sustainable the differential service tax demand is also not sustainable. In the appellant’s own case for the earlier period this Tribunal [2024 (9) TMI 1174 - CESTAT AHMEDABAD] remanded the matter to the adjudicating authority for passing a fresh order.
Thus this matter should go back to the adjudicating authority for deciding afresh keeping in mind the observations made supra.
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2024 (11) TMI 721
Service tax on the foods sold on counter/taken away - Adjudicating Authority held that sale of food over the counter is not service and, therefore, there is no ground to levy service tax on the same - HELD THAT:- As decided in M/s Bikanervala Foods Pvt. Ltd.2024 (6) TMI 504 - CESTAT NEW DELHI] give rise to the issue of taxability of sale of food items through “Take Away” or “Home Delivery”, the activity is clearly of sale of food and does not involve any service element and, therefore, following the ratio of the judgements referred above, the activity of sale of food items by “Take Away” or “Home Delivery” by the appellant is not liable to service tax. Accordingly, the impugned order deserves to be set aside and the appeal is allowed.
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2024 (11) TMI 720
Valuation of services - sale of coal rejects - Rejection of refund claim as barred by limitation - HELD THAT:- Tribunal in the case of Earth Minerals Company Limited [2024 (5) TMI 1487 - CESTAT KOLKATA] wherein it has been held that on the sale of coal rejects the appellant is not liable to pay service tax. Admittedly, the value of sale rejects recovered by the appellant are not liable to be taxed, therefore, they are not liable to pay service tax, hence, the refund claim filed by the appellant is to be entertained which has been paid by them inadvertently.
Period of limitation - We find that in this case for the period April 2012 to June 2012 the appellant filed refund claim on 21.05.2013. It means that except April, 2012, the refund claim filed by the appellant is within time. The Ld. Counsel conceded the refund claim for April, 2012 at this stage, therefore, we hold that the appellant is not entitled for refund for the period April, 2012. Therefore, for the period May 2012 to June 2012 the refund claim was required to be entertained by both the authorities and cannot be rejected as barred by limitation.
We set aside the impugned order and remand the matter back to the Ld. Commissioner(Appeals) to deal with the issue of unjust enrichment and pass an appropriate order in accordance with law within 60(sixty) days from the date of receipt of this order.
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2024 (11) TMI 669
Jurisdiction of the respondent authorities to issue the show cause notice Service tax demand on Works Contracts with respect to Road & Building Department/Irrigation Department/Public Health Engineering Wing - petitioner is an approved “E-1” (class contractor) - HELD THAT:- It is evident that the petitioner was not at all liable for service tax and the respondent authorities could not have assume the jurisdiction to issue the show cause notice on the basis of the data provided by the Income Tax Department in Form-26AS and thereafter failed to consider the details provided by the petitioner in reply to the show cause notice.
No justification is given in the impugned show cause notice as well as the order-in-original for assumption of jurisdiction by invoking extended period of 5 years under the priviso to sub-section-1 of section 73 of the Finance Act, 1994.
The impugned show cause notice is not tenable as the same is issued without jurisdiction and consequently the order-in-original also would not survive. The petition is accordingly succeeds.
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2024 (11) TMI 668
Service tax demand - invoking the extended time proviso - Goods Transport Agency services - appellant are availing the facility of CENVAT Credit on input, input services in capital goods used in the manufacture of their finished products - HELD THAT:- We are of the view that the matter is no longer res integra as this Tribunal in case of PSL Limited [2014 (11) TMI 84 - CESTAT AHMEDABAD] has already decided this matter in favour of the appellant as held it is apparent that till the point of time Section 73 of the Finance Act, 1994 came to be substituted w.e.f. 10-9-2004 provisions of the said Section could not be made applicable despite retrospective amendment in Sections 68 and 71A of the Finance Act, 1994. In these circumstances, admittedly, the assessee could not be faulted with for not having filed a return after getting himself registered. More particularly, when one considers the language employed in the proviso below sub-section (1) of Section 68 and the provisions of Section 71A of the Finance Act, 1994, it is not possible to state that the language of the Statute is so clear that any default can be fastened on the respondent-assessee.
Thus, we find that the entire demand under the impugned show cause notice is barred by period of limitation and therefore, we find no merit in the impugned Order-In-Appeal. Accordingly, we set aside the same.
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2024 (11) TMI 667
Service tax on discount/ incentive from the vehicle manufacturer by the appellant being the dealer - appellant being a dealer, purchase the vehicles from M/s Maruti Suzuki India Private Limited/ M/s Renault India Private Limited and subsequently, sell the same to the various customers - HELD THAT:- The vehicle manufacturer M/s Maruti Suzuki India Private Limited/ M/s Renault India Private Limited on the basis of yearly performance of sale grants the discount to the dealer, this discount is nothing but a discount in the sale value of the vehicle sold throughout the year therefore, these sales discount in the course of transaction of sale and purchase of the vehicles, hence, the same cannot be considered as service for levy of service tax. This issue is no longer res-integra as the same has been decided in the various judgments cited by the appellant. See B M Autolink [2022 (12) TMI 12 - CESTAT AHMEDABAD]
Booking cancellation charges - There is no provision of service made towards such cancellation. In the case of Divine Autotech Private Limited [2024 (6) TMI 1329 - CESTAT NEW DELHI] it was held that booking cancellation charges for motor vehicles received by Appellant is in the nature of compensation and not consideration for service. Further the CESTAT placed reliance on Circular No. 178/10/2022-GST dated August 3, 2022 wherein the issue of cancellation charges has been dealt with at length. Therefore, no service tax could be charged on them.
The amount received as discount/ incentive from the vehicle manufacturer by the appellant being the dealer is not liable to service tax and service tax is also not leviable on the booking cancellation charges.
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2024 (11) TMI 666
Service tax demand on considerations received on account of reimbursable expenditure - HELD THAT:- We find that the appellant has been reimbursed all the medical expenses. In case of the dog squad expenses, the dogs belonged to M/s. NRL and the maintenance cost towards the squads has been reimbursed by M/s. NRL. Similarly, in the case of donation/financial grants received for celebration of Republic Day and Independence Day, whatever expenses were incurred by CISF/appellant, were reimbursed by M/s. NRL.
These details show that the amounts paid to the appellant were not in the nature of any consideration towards any of the said services provided by them. The issue is squarely covered by the decision of the Hyderabad Bench of the CESTAT in their own case [2024 (5) TMI 565 - CESTAT HYDERABAD] wherein as held that reimbursement expenses are not to be added to the gross value for arriving at the Service Tax payable.
Extended period of limitation - Also see considerable force in the argument of the Appellant that the confirmed demand for the extended period is hit by time bar. The Appellant is a reputed Government of India Undertaking, working under the Ministry of Home Affairs. They cannot be said to have any intention to evade the Service Tax payment.
Thus the appeal filed by CISF has been allowed on merits and also on account of limitation.
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2024 (11) TMI 665
Service tax liability on sale of imported tally software - invoking extended period of limitation - Appellant is the distributor for marketing and installation of tally software on behalf of seller hold the intellectual property right and copy rights; product alone is transferred to the Appellant.
Demand of duty by invoking the extended period of limitation from 16.05.2008 to 30.09.2008 - HELD THAT:- Once penalty imposed by Adjudication authority under Section 78 was dropped by the Appellate authority on the ground that there does not seems to be the presence of guilty mind warranting penalty under Section 78 of the Finance Act, 1994 and when said finding has not been challenged by the revenue, following the decision of the Tribunal in the matter of M/s Frankie Fabric India Ltd [2017 (2) TMI 482 - CESTAT MUMBAI] demand of Service Tax by invoking the extended period of limitation from 16.05.2008 to 30.09.2008, is not sustainable.
Service tax demand - The software imported and sold by the Appellant is import and sale of goods and is not exigible to service tax.
Goods imported and sold in downloaded form through Internet, as per the judgment of the Hon’ble Supreme Court in the case of M/s Tata Consultancy Services [2004 (11) TMI 11 - SUPREME COURT (LB)] the moment copies are made and marketed, it became goods which are subject to sales tax.
Demand against upgradation of software, as per the decision of M/s Quick Heal Technologies Ltd [2022 (8) TMI 283 - SUPREME COURT] once lumpsum has been charged for the sale of CD as involved in present appeal and sale tax has been paid thereon, Revenue thereafter cannot levy service tax on the entire sale consideration once again on the ground that updates are being provided. Thus, it is well settled that once Appellant had paid VAT on the sale of goods, service tax cannot be demanded on such sale of goods.
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2024 (11) TMI 615
Service tax liability - “deemed sale” under article 366(29A)(d) of the Constitution had taken placed under the License Agreement - inclusion of amount paid to the appellant under the License Agreements in the assessable value of “renting of immovable property service” because without the license endorsement the plant and machinery leased to the appellant could not have been put to use by Skol for brewing beer
HELD THAT:- A Lease Deed was executed between the appellant and Skol for renting of land, building plant and machinery by the appellant to Skol. The appellant has been described as the “Lessor” and the Skol has been described as the “Lessee” in the said Lease Deed.
As clear from the terms of the License Agreement that it is not merely the use of the License that has been transferred to Skol/Sab Miller by the appellant. What has been transferred by the appellant is the right to use the License. As can be seen from the Agreement, Skol/Sab Miller have been transferred the right to use the brewery license and the permitted capacity for a period of 4 years free from any charges, encumbrances, liens or third party rights.
Skol/Sab Miller shall also enjoy the freedom to utilize the brewery license and operate during the entire term without any hindrance, obstruction or limitation from the appellant. In fact, the appellant also agreed to indemnify, defend and hold Skol/Sab Miller harmless from any actions, causes of actions, claims, demands, costs, liabilities, expenses and damages arising out of or in connection with any claim that would constitute a breach of any of warranties and/ or obligations, relating to the period prior to the commencement of the License Agreement dated 30.01.2008.
The agreement also provides that the promoters shall not do or cause to be done any act that will result in breach of the License Agreement. The appellant does not, with the transfer of the right to use by Skol/Sab Miller, have any right to itself use the brewery license. There is, therefore, no manner of doubt that a “deemed sale” under article 366(29A)(d) of the Constitution had taken place when the appellant granted the right to use the License to Skol/Sab Miller. The findings to the contrary recorded by the Commissioner cannot be sustained.
Commissioner placed much emphasis on the Lease Deed executed between the appellant and Skol for renting of land, building, plant and machinery and in particular to clause 3 which provides that the appellant shall procure a valid endorsement/sub-license of the brewery license in favour of Skol. According to the Commissioner, the License Agreement that was subsequently executed was only to complete or validate the Lease Deed and, therefore, renting of the factory along with the brewery license is an integral part of the “renting of immovable property” services.
Two documents, namely, the Lease Deed and the License Agreement have to be separately examined and merely because there is a recital in the Lease Deed that the appellant shall procure a valid endorsement/sub-license of the brewery license in favour of Skol does not mean that the subsequently executed License Agreement becomes an integral part of the Lease Deed.
Contention of the appellant that a deemed sale had taken place has also been repelled by the Commissioner for the reason that leasing of brewery license was subject to certain restrictions. Only a bald statement had been made. In fact, the terms of the License Agreement give complete freedom to Skol/Sab Miller to operate the brewery and the License Agreement does not cause any hindrance.
A finding had also been recorded by the Commissioner that no “sale” had taken place. The contention of the appellant was that a “deemed sale” contemplated under article 366(29A)(d) of the Constitution had taken place. There is a marked difference between “sale” and “a deemed sale” as was pointed out by the Supreme Court in Quick Heal Technologies [2022 (8) TMI 283 - SUPREME COURT]
A deemed sale had taken place when the appellant transferred the right to use the brewery license issued to the appellant in favour of Skol/Sab Miller on execution of the License Agreement. The consideration received by the appellant on the execution of the License Agreement cannot, therefore, be subjected to service tax nor can such consideration be clubbed with the consideration received by the appellant under the Lease Deed so as to be subjected to service tax under “renting of immovable property” service.
The impugned order passed by the Commissioner adjudicating the three show cause notices, therefore, deserves to be set aside.
It will, therefore, not be necessary to examine the contention of the learned counsel for the appellant that the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act could not have been invoked.
The impugned passed by the Commissioner is, accordingly, set aside and the appeal.
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2024 (11) TMI 614
Demand of service tax - upheld Order-in-Original including alleged wrong availment of Cenvat credit but dropped penalty u/s 76 of the Act - appellant is a commercial coaching and training centre providing the service of Computer Training and also Technology Based Training (TBT) for skill development, and training for medical transcription; insurance agents etc. to their clients - HELD THAT:- We consider it appropriate to reproduce the definition of vocational training institute as provided in the Notification No. 24/04-ST dated 10.09.2004 which provides exemption of services tax to commercial training or coaching services provided by vocational/recreational training institute.
The definition of vocational training institute as given in explanation to notifications 09/2003-ST and 24/04 defines it as “Commercial training or coaching centre which provides vocational coaching or training that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching.
We find that the appellant in the present case is providing vocational courses pertaining to technology based, medical transcriptionists, and insurance agent which find mention in the category of non engineering trades which is elaborately mentioned in the case of Sadhana Educational & People Dev Services Ltd. cited (Supra).
We also find that the decisions relied upon the Ld. AR has been distinguished on facts by the Ld. Counsel for the appellant and after considering the ratio of the decisions relied upon by the appellant cited particularly Pasha Educational Training Institute [2008 (12) TMI 80 - CESTAT, BANGALORE] wherein the Tribunal has observed that vocational training means training that imparts skills to enable trainee to seek employment or undertake self employment directly after such training or coaching and goes on to hold that comprehensive training given by the appellant enables trainees to appear for examination conducted by IRDAI and hence would be entitled for exemption under Notification No. 09/03-ST therefore, we hold that the training provided by the appellant falls squarely in the definition as provided by the Notification No. 09/03-ST dated 20.06.2003 and Notification No. 24/04-ST dated 10.09.2004.
Demand of cenvat credit under Rule 6 of the Cenvat Credit Rules, 2004 - We find that the appellant has correctly utilized the Cenvat credit of Rs. 81476/- as they were maintaining separate accounts for input and output services, the details of service tax taken and utilized by them for the relevant period has been given in annexure P-4 which has not been considered by both the authorities below. We find that perusal of material shows that the appellant has not taken cenvat credit on input services used in providing output services (exempted) during the relevant period, therefore, the question of wrong utilization of Cenvat credit does not arise and the provisions of Rule 6 of the the Cenvat credit Rules, restricting of 20% of credit are not attracted.
Thus, the impugned order is not sustainable in law and therefore, we set aside the same by allowing the appeal of the appellant.
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2024 (11) TMI 613
Service tax on recovering liquidated damages for delay in execution of supply contract and service contract as per the agreement between the appellant with their clients - as submitted collection of liquidated damages cannot be considered as against a ‘service’ as held by the Tribunal in their own case as reported in [2022 (9) TMI 1005 - CESTAT NEW DELHI] - HELD THAT:- We find that this Tribunal, in the appellant’s other units for the same period [2024 (3) TMI 1282 - CESTAT BANGALORE] following the judgement of Tribunal in their own case allowed the appeal with consequential relief held that amount cannot be made liable to tax in the name of it being consideration for providing deemed service.
Thus the impugned order is set aside and the appeal is allowed.
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2024 (11) TMI 592
Liability to pay Service Tax under reverse charge mechanism basis in terms of Rule 2 (1) (d) (EE) of the Service Tax Rules, 1994 read with Notification No. 30/2012-ST dated 20.06.2002 - whether the services provided by M/s IRIS Engineering Co. can be considered as service provided by one of the director of the appellant company?
HELD THAT:- We are of the opinion that it is a settled preposition that sole proprietorship concerned is not a separate legal entity from proprietor for the purpose of taxation and for other legal purposes. In case of ANILKUMAR MAHESARIA [2007 (12) TMI 175 - HIGH COURT DELHI] has held that proprietor and proprietorship concerned are not separate entities and similar view has also been held in Commissioner of Customs CSI AIRPORT, MUMABI Vs. GYANCHAND JAIN [2015 (9) TMI 510 - BOMBAY HIGH COURT]
We find that there is no difference between the proprietorship firm namely M/s IRIS Engineering Co. and Shri Chittranjanbhai D. Badheka and therefore, the provisions of the Rule 2 (1) (d) (EE) of Service Tax Rules, 1994 read with terms of Notification No. 30/2012-ST dated 20.06.2012 will be applicable and the party should have discharged the Service Tax liability on reverse charge basis on the services provided by the one of its Directors.
We find that in this case the question of revenue neutrality raised by the learned Advocate is relevant as the Service Tax payable on the services received from one of the directors of the firm would have been available to the appellant as CENVAT Credit and therefore, we find that the situation becomes revenue neutral. We also find that there is no loss of the revenue in this particular case.
As relying on Messers John Energy Limited [2018 (11) TMI 1389 - CESTAT AHMEDABAD] we held that the situation in the present case is similar to that of above Matter of revenue neutrality. We also find that there is no loss to the revenue because of Revenue neutral situation. Hence, we follow the above mentioned decision of this Tribunal and hold that impugned order in appeal is without any merit and accordingly, we set aside the same. Assessee appeal allowed.
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2024 (11) TMI 591
Service Tax liability under reverse charge mechanism - appellant in their books of account under the head legal and professional expenses booked certain expenditure of legal and professional fees - Revenue has made out a case by picking up a figure of expenditure shown in the books of account assuming that the entire expenditure shown in the books are not legal and professional expanses which is liable to service tax under reverse charge mechanism in the hands of the appellant
HELD THAT:- We find that to arrive at a final conclusion whether the activity is classifiable under a particular head for which the appellant is liable to pay service tax under reverse charge mechanism has not been verified properly by the adjudicating authority and for that reason for the earlier period this Tribunal [2024 (9) TMI 1652 - CESTAT AHMEDABAD] remanded the matter wherein appellant has made out a prima facie case in as much as they have clearly shown the bifurcation of the expenses booked under the head of legal and professional charges in their books of account. Merely because the appellant have booked the expenses of various professional under one head that is legal and professional charges this cannot be the reason to demand Service Tax from the appellant under Reverse Charge Mechanism on the assumption that all the expenses booked under the said head is towards the legal fees. The appellant have produced the chart whereby it is explicit that the major amount pertains to various other professions such as Chartered Accountant, Chartered Engineer etc. for which the appellant is not liable to pay Service Tax under Reverse Charge Mechanism in terms of Section 68(2) read with Notification No. 30/2012-ST. however, this clear bifurcation has not been submitted by the appellant before the adjudicating authority therefore the matter needs to be reconsidered by the adjudicating authority on all the issues.
The identical facts involved in the present case and it is coming out from the adjudication process that the adjudicating authority has not verified properly, the books of accounts, ledger and head of expenditure that whether the same is liable to service tax under reverse charge mechanism despite the entire documents were produced by the appellant, therefore, on the same line of the above order, this matter also to be reconsidered by passing a de-novo order.
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