|
Advanced Search Options
Service Tax - Case Laws
Showing 21 to 40 of 29360 Records
-
2024 (5) TMI 376 - CESTAT CHANDIGARH
Levy of service tax - Business Auxiliary Services - appellant are purchasing SIM Cards/Recharge coupons from BSNL on full payment of the Purchase consideration and selling these SIM Cards/ Recharge coupons to its customers on a Principal to Principal basis on a profit Margin - HELD THAT:- It is found that the commission received by the appellant are for sale of SIM Cards and other products of BSNL. It is also found that the service tax has already been paid by the BSNL on the products sold by the appellant.
This issue is no more res integra and has been settled by the various decisions of the Tribunal as relied upon by the appellant in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S RAMA SALES AND SERVICES [2018 (3) TMI 556 - ALLAHABAD HIGH COURT], the Hon’ble Allahabad High Court held that purchase and sale of SIM Cards by franshisee/distributors appointed by telecom companies not leviable to Service Tax under category of Business Auxiliary Service especially when such companies already discharged service tax on gross amount of Such SIM cards and charging any further service tax on same amount would lead to double taxation.
Revenue relied upon the decisions of the Hon’ble Apex Court in the case of IDEA MOBILE COMMUNICATION LTD. VERSUS CCE. & C., COCHIN [2011 (8) TMI 3 - SUPREME COURT]. It is pertinent to mention that this judgment of the Hon’ble Apex Court was considered by the Tribunal in the case of COMMISSIONER VERSUS DAYA SHANKAR KAILASH CHAND [2015 (8) TMI 1007 - ALLAHABAD HIGH COURT] and it was observed by the Tribunal that the issue involved in the said case before the Supreme Court was different than the issue involved in the present case.
The impugned order is not sustainable in law and the same is set aside - Appeal allowed.
-
2024 (5) TMI 374 - CESTAT ALLAHABAD
CENVAT Credit - services provided by Container Corporation of India Ltd. during the period from June, 2015 to March, 2016 on GTA Service - liability of Service Tax on amounts paid to East Central Railways.
CENVAT Credit - GTA Services - HELD THAT:- The Appellant exported its final products i.e. Carbon Black from JNPT, Mumbai via ICD Kanpur in respect of which M/s Container Corporation of India Ltd. charged GTA Services from ICD Kanpur to JNPT, Mumbai - the issue is no more res integra and is squarely covered by the judgement of Hon’ble Gujarat High Court in the case of CENTRAL EXCISE VERSUS INDUCTOTHERM INDIA P LTD [2014 (3) TMI 921 - GUJARAT HIGH COURT]. Hon’ble High Court while considering the issue of admissibility of Cenvat credit of Service Tax paid on Cargo Services, held that any service availed by the Exporter, until the goods left India from the port, shall be considered as services used in relation to clearance of final products upto the place of removal - it is the Appellant and not the Container Corporation of India Ltd. who continued to remain owner of the goods till the goods are exported. Therefore, the place of removal would be JNPT Mumbai and not ICD Kanpur. The Appellant has rightly availed Cenvat credit on Service Tax paid on GTA from ICD Kanpur to JNPT, Mumbai - demand on account of Cenvat credit amounting to Rs.98,765/- alongwith interest is set aside, penalty of Rs.49,383/- imposed under Rule 15(2) of Cenvat Credit Rules is also set aside.
Liability of Service Tax on amounts paid to East Central Railways - HELD THAT:- The railway crossing in question is used not only by the Appellant but also by residents of the colonies and also by industries situated in the adjoining areas. That in the aforesaid background, during the period 2014-15 & 2015-16, Appellant paid an amount of Rs.14,22,468/- and Rs.14,61,966/-respectively to East Central Railways as recovery of wages of two gate keepers of railway crossing. As the charges were not in respect of any service provided by Railways to Appellant, hence neither Railways charged service tax on the same, nor Appellant paid service tax under reverse charge mechanism - East Central Railway has not provided any service to the Appellant under the category of Business Support Services as alleged by the Department and Railways was performing statutory obligation by way of constructing a railway crossing and posting of two gatemen. The payment made by the Appellant to the Railways during the period 2014-15 to 2015-16 does not attract any Service Tax liability and the Appellant was not required to discharge Service Tax under reverse charge mechanism. Thus, the demand of Rs.6,76,049/- alongwith interest and penalty of Rs.3,38,025/- is set aside.
The impugned order is set aside - appeal allowed.
-
2024 (5) TMI 373 - CESTAT CHANDIGARH
Refund claim for service tax paid on specified services used in relation to authorized operations in the SEZ unit - rejection of refund on the ground that wrong address being mentioned in the invoices and the input services have not been consumed in the SEZ unit - refund sanctioning authority held that the input services have not been consumed in the SEZ unit, merely on account of raising of invoices by the service providers on the registered office of the company instead of its SEZ unit - N/N. 12/2013-ST dated 01.03.2013 - HELD THAT:- The respondent has brought on record the fact that the registered office of the company does not carry out any operation and it is merely a liasoning office and has been established only for the purpose of correspondence with vendors etc and in compliance with provisions of the Companies Act and no commercial activity is being undertaken from this office and also, no GST registration is obtained for this office by the respondent. All the input services have been consumed in the SEZ unit located in Gurugram, Haryana, which is further cleared from the declarations issued by the service providers specifically stating that the input services in question have been provided by them to the SEZ unit and the same have been consumed in the SEZ unit only.
This issue is no more res integra as the same has been decided by various courts in a plethora of decisions consistently holding that the Cenvat Credit cannot be denied pertaining to certain input service invoices which are addressed to unregistered premises of the respondent. In this regard, reference made to the decision of the Hon’ble Allahabad High Court in the case of M/S CYQUATOR MEDIA SERVICES P. LTD. VERSUS UNION OF INDIA THRU' ITS SECY. & 2 OTHERS [2017 (12) TMI 775 - ALLAHABAD HIGH COURT] wherein Hon'ble High Court while deciding a similar issue has held that if all the information as stipulated in Rule 4A of Service Tax Rules is mentioned on the invoice, the Cenvat Credit cannot be denied.
Further it is found that the receipt and the use of input services by the respondent have not been questioned by the Department and the issue relates only to validity of invoices which were issued to the wrong address, which is not registered with the Service Tax - it is a settled law that substantial benefit cannot be denied merely on a procedural infraction.
There are no infirmity in the impugned order and the same is upheld - the respondent is entitled to refund of service tax paid on input services used in relation to authorized operations in their SEZ unit situated in Gurugram, Haryana.
The appeal of Revenue dismissed.
-
2024 (5) TMI 372 - CESTAT BANGALORE
Levy of service tax - Employees were deputed to the assessee - receiving services from the overseas company FFECJ through Dispatch Agreement and Secondment Agreement in deployment of qualified and skilled employees during the said period - extended period of limitation.
The Revenue’s argument is that the facts of the present case are similar to the facts decided by the Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd.’s case [2022 (5) TMI 967 - SUPREME COURT]; hence applying the ratio laid down in the said case, the service tax demand confirmed by the adjudicating authority be restored. On the other hand, the respondent argued that the Dispatch Agreement and Secondment Agreement are different in the present case to the one decided by the Hon’ble Supreme Court; hence ratio of the Supreme Court judgment is not applicable to the present case.
HELD THAT:- In the sample Secondment Agreement and the Dispatch Agreement between the respondent and FFECJ reveals that these agreements’ terms and conditions are more or less similar to the one referred to in para 3 of the judgment of the Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd. In the present case also, the respondent was in need of personnel for facilitating the business operations in India and the overseas company which has such personnel who possesses the requisite qualification and skilled employees itself desired to employ such persons on exclusive basis and the overseas company has duly consented to depute such personnel. The deputed personnel while under employment with the respondent was not in any way subjected to any kind of instruction or control or direction or supervision of the overseas company and they would report only to respondent’s management - The remuneration to be paid by the respondent to dispatched personnel as laid down at Article 5 comprising of Monthly salary in India; Monthly Salary in Japan; Bonus in Japan and any other allowance paid / cost incurred for the dispatched personnel during the employment period. Further it is agreed that in respect of monthly salary in India and monthly salary in Japan and bonus in Japan on the request of the dispatched personnel as his home country is Japan and for administrative convenience, respondent company to request overseas company to make such payments in Japan which shall be reimbursed by the respondent on actual cost basis.
In the Secondment Agreement, the dispatched personnel agrees with all the conditions settled between the respondent and the overseas company under the dispatch agreement.
A careful reading of the Dispatch Agreement along with the Secondment Agreement and also the contract of the employment, letter of employment etc., there are no substantial difference from the facts stated in the judgment of Hon’ble Supreme Court in Northern Operating Systems Pvt. Ltd.’s case - it was held in the said case that ' it is held that the assessee was, for the relevant period, service recipient of the overseas group company concerned, which can be said to have provided manpower supply service, or a taxable service, for the two different periods in question (in relation to which show cause notices were issued).'
Their Lordships on the issue of invocation of extended period of limitation decided in favour of the assessee.
The impugned order is set aside and the matter is remanded to the adjudicating authority to compute the liability of the service tax payable with interest for the normal period of limitation - appeal disposed off by way of remand.
-
2024 (5) TMI 371 - CESTAT NEW DELHI
Non-payment of service tax - Business Auxiliary Service - activity of using Galileo CRS system - Tour Operator’s Service - services of domestic and international hotel bookings - Banking and Other Financial Service - activity of sale/purchase of foreign exchange by the appellant - extended period of limitation.
Service Tax with respect to Business Auxiliary Services allegedly rendered to M/s. GIPL - HELD THAT:- What is important to notice is that for an activity to qualify as “promotional”, the person before whom the promotional activity is undertaken should be able to use the services. The passenger cannot directly use the CRS software provided by the Company to book an airline ticket. It cannot, therefore, be said that a travel agent is promoting any activity before the passenger. It has also been held that mere selection of software for exercising of a choice would not result in any promotional activity. The department is opined to have failed to point out any activity undertaken by an Air Travel Agent that promotes the business of the CRS companies - the demand of service tax on the amount of incentives received by appellant from GIPL/ITQPL under ‘Business Auxiliary Service’ has wrongly been confirmed. The same is hereby set aside.
Service Tax with respect to Tour Operator’s Service - HELD THAT:- In view of the statutory definition of "tour", considered in the context of the legal position demarcating the limits of the application and reach of provisions of the Act, it is clear that a journey from one place to another beyond the territorial limits of India, even if amounting to an activity comprised within the ambit of the definition of "tour operator", would not amount to a taxable service under the provisions of the Act. On the aforesaid analysis we conclude that the consideration received for operating and arranging outbound tours, even if falling within the scope of the amended definition of "tour operator”; (provided by the assessees and consumed by their tourist customers beyond Indian territory), is not liable to levy and collection of Service Tax, under provisions of the Act - This issue is otherwise no more res integra as stands decided by the Larger Bench of this Tribunal in M/S COX & KINGS INDIA LTD., M/S TRAVEL CORPORATION OF INDIA LTD. AND M/S SWAGATAM TOURS PVT. LIMITED VERSUS CST, NEW DELHI [2013 (12) TMI 1024 - CESTAT NEW DELHI] where it was held that 'Planning and scheduling of outbound tours may not be components of services provided to tourists, would amount to an incidental activity undertaken as a prelude to providing tours and thus the service if at all provided is to the service provider itself. Nevertheless, since organizing and/or arranging of outbound tours are components of the service provided to tourists and these are the primary and substantive purposes of the service provided and consumed, the composite activity of planning, scheduling, organizing or arranging tours falls within the scope of the taxable service defined in Section 65(115) of the Act.' - thus, tax demand of Rs.6,54,828/- on outbound tours has wrongly been confirmed.
Service tax on the amount received for Eurail passes for the travelers - HELD THAT:- The said service charges collected by the appellant from the tourist is leviable to Service Tax under "Tour Operator's Service". It is apparent that appellant is merely re-selling Eurail passes and is in no way concerned for arranging tours in Europe by Eurail. Appellant is merely purchasing such passes from other Indian tour operators and reselling them to the tourists. They are earning small amount on resale of such passes as commission. Selling Eurail passes is merely selling a commodity or a service and there is no general service tax levy on resale of services. Further in the light of above discussion about definition of ‘tour operator’, the present activity does not get covered. Hence the demand on this count is not sustainable. The order under challenge is set aside to this extent.
The service tax on account of allegedly rendering the Banking and other Financial Services in respect of sale/purchase of foreign exchange - HELD THAT:- The demand on this count has already been dropped except for Rs.2,037/-. It is observed that the foreign currency has been received by the appellant while planning, scheduling, organizing, etc., the outbound tours. It cannot be ruled out that receiving consideration in convertible foreign exchange facilitates and encourage inflow of currency into India and simultaneously avoid outflow of Indian currency i.e. the purpose is to augment foreign exchange earnings. There are no evidence on record which may show that the appellant was dealing with sale and purchase of foreign exchange directly except that the foreign exchange dealer from whom the passenger purchases the foreign exchange adds a profit on the foreign currency sale rate and reimburses the same to the appellant - That entry 'Banking and other Financial Services’ under the amended Finance Act, 2008 in no way covers the said transaction of the appellant. The only entry could be under (a) (iv), (vii) or under (b) of Section 66(12) of the Act. However, the appellant states that they are not having any license for brokerage in foreign exchange and they are not carrying out any such activity. Therefore, neither under (a) (iv) or under (a) (ix) or under (b), there is a case for bringing the impugned transaction under the category of Banking and other Financial Services. The demand is therefore liable to be set aside.
Invocation of extended period for issuing show cause notice - HELD THAT:- The activities as that of using CRS of GPIL/ITQPL etc. was under consideration and at the relevant point of time had the contradictory decisions. So is true as far as the activity of Tour Operator’s Services is concerned. During the relevant time the decisions were in favour of the assessee-appellant. The said confusion about the nature of the impugned activities/services is sufficient to hold that appellant did not take service tax registration on the bona fide ground. There are nothing on record which may prove a positive act on the part of the appellant about mala fide intent to evade the payment of duty - the confirmation of demand for the period beyond the normal period is liable to be set aside as the extended period is not invokable in the given set of circumstances.
The order confirming the demand on service tax on inbound tours and domestic tours under Tour Operator’s Services is upheld, however, for the normal period. Rest of the demand is held to be non-sustainable - Appeal allowed in part.
-
2024 (5) TMI 370 - CESTAT ALLAHABAD
Eligibility for deduction of cost of medicines incurred for providing health services - N/N. 12/2003-ST dated 20.06.2003 - HELD THAT:- The decision of larger bench relied upon by the Commissioner (Appeals) in the case of M/s Aggarwal Colour Advance Photo System has been set aside by the Hon’ble Madhya Pradesh High Court vide its order dated 13.03.2020 [2020 (4) TMI 799 - MADHYA PRADESH HIGH COURT] where it was held that 'in goods, the tax on such sale or purchase of goods is leviable. In this view of the matter, after the 46th Amendment, there is no question of dominant nature test applying in photography service and the works contract, which is covered by Clause (29A) of Article 366 of the Constitution where the element of goods can be separated, such contracts can be subjected to sales tax by the States under Entry 54 of List II of Schedule II. Once that is so, value of photographic paper and consumables cannot be included in the value of photography service for the purposes of imposition of service tax.'
From the decision of Hon’ble High Court it is quite evident that the benefit of exemption under Notification No 12/2003-ST cannot be denied just for the reason that the value of goods consumed in providing the taxable services is not separately indicated in the invoice, or no separate invoice for the sale of such goods have been made. The appellant hospital admittedly consuming the medicines and other consumables for providing the health services to its client. The only reason recorded in the impugned order for denying the said benefit is non production of sale bills showing sale of the medicines which were actually consumed in providing the health services. Commissioner (Appeal) has based his order on decision of larger bench of tribunal referred above. However as this decision has been set aside by the Hon’ble High Court reliance placed on the said decision cannot be upheld.
The he impugned order is set aside, Order-in-Original passed by Deputy Commissioner has been restored - appeal allowed.
-
2024 (5) TMI 369 - CESTAT NEW DELHI
Refund of Service tax paid - time limitation - application rejected as not filed within one year from the payment of the service tax as laid down in section 11B of CEA - HELD THAT:- The nature of assessment and refunds were examined by the Supreme Court in Priya Blue Industries vs Commissioner of Customs (Prev) [2004 (9) TMI 105 - SUPREME COURT] which was a Customs case and Collector of Central Excise vs Flock (India) Pvt. Ltd. [2000 (8) TMI 88 - SUPREME COURT] which was a central excise case. In both judgments, the Supreme Court held that refund can only be sanctioned in pursuance of the assessment not such as to have the effect of changing the assessment.
After these judgments, there have been changes in the law and self-assessments were introduced. The question which arose is if there was only self-assessment and no re- assessment by the officer, if the refund could be sanctioned contrary to the self assessment. This was answered by a larger bench of Supreme Court in negative in ITC Ltd. vs Commissioner of Central Excise, Kolkata IV [2019 (9) TMI 802 - SUPREME COURT]. It has been held that all assessments, including self-assessments are appealable and unless the assessment is modified, no refund could be sanctioned so as to change the assessment. The reason for this is the refund proceedings are in the nature of execution proceedings and they cannot be used to re-determine the liabilities - Thus, it was held that through refund proceedings, the assessment (including self-assessment) cannot be modified. Through ITC Ltd., a batch of matters were disposed of. The discussion in this judgment was largely based on the provisions of Customs Act but the principle laid down was clear that refund proceedings are only in the nature of execution proceedings and cannot change the assessment.
The legal position is loud and clear. Refund proceedings are in the nature of execution proceedings and they cannot modify an assessment including self-assessment. Refund can only be sanctioned or denied as per the assessment- be it self-assessment by the assessee or the best judgment assessment by the officer. This legal position will not and cannot vary depending on which side it favours. The law laid down in ITC Ltd. and BT (India) Pvt. Ltd. applies whether the claimant will get refund as a result or will be denied refund as a result. In neither case can the refund, which is in the nature of an execution proceeding be used to alter the assessment. Thus, the order of the Larger bench of this Tribunal in Balaji Warehouse interpreting the applicability of ITC Ltd. to service tax matters relied upon by the appellant has been clearly overturned by the High Court of Delhi in BT (India) Pvt. Ltd. Clearly, ITC Ltd. applies to service tax matters also.
Since the appellant had self-assessed service tax without applying the notification and the assessment has not been modified, it cannot be modified now in the refund proceedings. As per the self-assessment, the appellant was not entitled to the refund.
The impugned order is upheld - appeal dismissed.
-
2024 (5) TMI 368 - CESTAT NEW DELHI
Levy of service tax - notice period recovery - Declared Service or not - Department was of the opinion that the said amount is towards agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act - HELD THAT:- The employer cannot be said to have rendered any service per se much less taxable service and has merely facilitated the exit of the employee upon imposition of cost upon him for the sudden exit. Definition in clause (e) of Section 66E is not attracted to the scenario at hand. The employer has not 'tolerated' any act of the employee but has permitted a sudden exit upon being compensated by the employee in this regard in form of Notice pay, in lieu of sudden termination. In any case this act however, does not give rise to the rendition of service either by the employer or employee.
The decision relied upon by the appellant the Principal Bench in M/S RAJASTHAN RAJYA VIDHYUT PRASARAN NIGAM LTD. VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, CUSTOMS AND CENTRAL EXCISE, JODHPUR I [2022 (1) TMI 909 - CESTAT NEW DELHI] is perused wherein it has been held 'compensation for failure under a cannot is NOT consideration for service under the contract and also following the law laid down by Madras High Court in GE T & D INDIA LIMITED (FORMERLY ALSTOM T & D INDIA LIMITED) VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE [2020 (1) TMI 1096 - MADRAS HIGH COURT] that Notice pay, in lieu of termination, however, does not give rise to the rendition of service either by the employer or the employee, the impugned order upholding confirmation of a demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained and needs to be set aside.'
The amount from employee received by appellant, the employer, in lieu of notice period is wrongly held to be an amount towards rendering the Declared Service - the order under challenge is hereby set aside - Appeal allowed.
-
2024 (5) TMI 330 - CESTAT CHENNAI
Exemption from service tax - Business Auxiliary Service - providing transportation of agricultural produce - Exemption as per Sl.No.21, 22 of the Mega N/N. 25/12 dt. 20.06.2012 - De-novo order passed by the adjudicating authority during the pendency of the appeal - HELD THAT:- The Commissioner (Appeals) vide order impugned in this appeal had remanded the matter. It is to be noted that the present appeal has been filed by the appellant after complying with the mandatory predeposit. Prior to 06.08.2014, the Section 35F of Central Excise Act as made applicable by Section 83 of Finance Act, 1994 included the procedure to file stay application along with appeal. The Tribunal then had to consider the stay applications and direct to make predeposit in order to grant stay of recovery of the demand by the department. After introduction of new Section 35F w.e.f 1.8.2014, the assessee has been cast with the responsibility of making a mandatory predeposit. The procedure of filing stay application has been given away with. The requirement to make mandatory predeposit implies that the recovery proceedings are stayed during pendency of the appeal before the Tribunal.
Coming to the merits of the case, the Commissioner (Appeals) has analysed the issue and after considering the submissions made by the appellant that they are eligible for exemption under Sl.No.21, 22 of Notification No.25/2022 has remanded the matter to verify whether the transportations were made for agricultural produce. Taking note of this fact as well as the submissions made by the learned counsel at the time of hearing, the matter requires to be remanded to the adjudicating authority who is directed to look into the documents produced by the appellant with regard to transportation of goods. In case, the transportation is for agricultural produce, the appellant is eligible for exemption.
The matter requires to be decided on merits as well as on limitation and is remanded to the adjudicating authority leaving all issues open - appeal is allowed by way of remand to the adjudicating authority.
-
2024 (5) TMI 329 - CESTAT ALLAHABAD
Benefit of exemption from service tax - Vehicle Hire Charges - Rent received for their trailers (vehicles) rented to M/s Kataria Carriers, Kanpur - Supply of transport vehicles to Goods Transport Agency - availability of CENVAT Credit on Document Charges, terminal handling charges and bill of lading charges - invocation of extended period of limitation - levy of penalty u/s 76 & 78 of FA.
Whether the appellant was liable to pay service tax under the category of “Supply of Tangible Goods Service” on the rented received for their trailers (vehicles) rented to M/s Kataria Carriers, Kanpur? - HELD THAT:- Commissioner has denied the benefit of the said exemption as per N/N. 29/2008-ST dated 26/06/2008, 01/2009-ST dated 05/06/2009 and clause 22(b) of Mega- exemption Notification No. 25/2012-ST, only by stating that appellant has failed to produce the documentary evidence to show its eligibility to the said notification. They have failed to produce the documents as specified in Notification No 01/2009-ST. There are no hesitation in accepting the contention of Commissioner, to the effect that the exemption notifications need to be strictly construed and it is for the person claiming the benefit of exemption to satisfy with regards to his eligibility to the exemption.
From perusal of the invoices it is quite evident that the name of the recipient of services is clearly mentioned as “Kataria Carriers, H O 133/198 T P Nagar, Kanpur -208023” and description is stated as “Goods Transport Vehicle (Trailers) Hire Charges”. Appellant has substantially complied with the conditions as laid down by the Notification No 1/2009-ST and the benefit of this notification cannot be denied to them. For other periods for which this demand has been confirmed even the notification do not lay down this condition and hence the benefit of same cannot be denied. Thus, the demand made in the impugned order on this ground needs to be set aside.
Whether the CENVAT Credit was admissible to them on the Document Charges, terminal handling charges and bill of lading charges? - HELD THAT:- Undisputedly appellant is a provider of taxable service and is registered with the department for providing output services - Having satisfied the conditions as laid down by the main clause of the definition of output services, the appellant would be eligible for CENVAT Credit in respect of these services, even without reference to the inclusive part of the definition. Appellant has contested the denial of CENVAT Credit before the adjudicating authority by referring to the inclusive part of definition and the said challenge was not accepted. Similar view has been expressed by Hon’ble Gujarat High Court in the case of Excel Crop Care Ltd [2008 (7) TMI 160 - HIGH COURT GUJARAT] where it was held that 'The definition of the term ‘output service under Rule 2(p) of the Rules means any taxable service provided by the provider of taxable service, to a customer, client, subscriber etc. The Explanation to the said clause makes it clear that if a person liable for paying Service tax does not provide any taxable service or does not manufacture final products, the service for which he is liable to pay service tax shall be deemed to be the output service. Similarly, the definition of the phrase provider of taxable service’ appearing in Rule 2(r) includes a person liable for paying Service tax.' - thus, there are no merits in this part of the order seeking to deny the credit in respect of these input services used by the appellant for providing the output services.
Whether extended period of limitation is available for making this demand? - Whether penalty under Section 76 & 78 can be imposed on the appellant? - HELD THAT:- As the demands set aside on merit, these issues are not relevant and no findings recorded in respect of these issues.
There are no merits in the impugned order and the same is set aside - appeal allowed.
-
2024 (5) TMI 328 - CESTAT BANGALORE
Reversal of CENVAT Credit - common facilities used in providing taxable and exempted services - non-maintenance of separate accounts as per Cenvat Credit Rules (CCR), 2004 - short payment of service tax which occurred due to utilisation of ineligible CENVAT credit - HELD THAT:- The issue on hand can be analysed separately for two periods (a) upto March 2008 and (b) after April 2008, when Rule 6 of CCR, 2004 was amended. - (a) For the period upto March 2008, there was no provision for proportionate reversal of the credit already taken and if entire credit is availed, they could utilise only 20% of the output tax of a month through cenvat credit - (b) For the period after April 2008, a procedure has been prescribed under Rule 6(3A) to provisionally reverse the credit every month based on a calculation/ formula prescribed therein and to finally pay difference in reversal after completion of annual calculation by 30th June of the succeeding year.
The appellant submitted the certificates issued by Chartered Accountant(CA) to prove that they have maintained separate accounts. However, adjudication authority has not considered the certificates issued by CA, since it does not report that it is maintained from receipt stage and also do not state that they are in conformity with the statutory provisions viz., Rule 6 of CCR, 2004.
On a combined reading of the report of Range officer, findings of the Adjudication authority as stated above and considering the report of Chartered Accountant(CA), which categorically certified that the appellant is maintaining separate records and have been making reversal of balance amounts at end of every month, the appellant has complied with the provisions of rule 6 of CCR, 2004 and hence findings in the impugned orders are not sustainable.
However, it is found that there is an amount of 29,24,565/- which remains to be reversed by them. Thus, this amount is required to be reversed along with interest.
Appeal allowed.
-
2024 (5) TMI 327 - CESTAT NEW DELHI
Levy of service tax - act of providing ‘corporate guarantee’ to the respondent for grant of loan from the banks without any consideration - HELD THAT:- There has been a consistent finding in all the decisions that the party had provided corporate guarantee on behalf of its sister concern to its lenders, who had not charged any commission or fee for providing guarantee and hence such activity is not chargeable to service tax.
The observations made by this Tribunal in the latest decision in M/s.Pharmax Corporation Ltd. [2024 (3) TMI 1179 - CESTAT NEW DELHI] where it was held that 'The service provider shall be liable to pay service tax on the consideration which it receives for providing a taxable service. Any amount which is received but which is not a consideration for providing a taxable service is not exigible to service tax. Similarly, if a service is rendered, but no consideration is received no service tax can be charged. It is for the reason that if the consideration received is zero any percentage will be zero itself.'
In the present case, it is found from the show cause notice, order-in-original and the impugned order that no consideration has been paid by the respondent in lieu of the corporate guarantee and in view of the judicial pronouncements, there are no reason to distinguish the same in the facts of the given case. Consequently, no service tax is leviable on the respondent on account of ‘corporate guarantee’.
The impugned order deserves to be upheld - appeal of Revenue dismissed.
-
2024 (5) TMI 326 - CESTAT NEW DELHI
Levy of service tax - water charges paid by the appellant to the department in lieu of supply of water under the Agreement dated 05.01.2013 - transfer of right to use the water by the Government to the appellant - deemed sale - HELD THAT:- A perusal of the Agreement executed between the government of Madhya Pradesh and the appellant would indicate that the appellant had applied to the government for permission to draw water from the Rihand Reservoir for use in the power project and the government had agreed to grant the said permission on certain terms and conditions in consideration of the appellant making payment to the government. The said permission was granted for a term of 30 years subject to the provisions of the Madhya Pradesh Irrigation Act 1931 and the Madhya Pradesh Irrigation Rules 1974 as is clear from clause 1 of the Agreement.
The Title of the Agreement shows that it was for supply of water to the industrial power plant. The appellant was required to pay water charges to the government for the water drawn by it from the government water source at the rates fixed by the Water Department which would be Rs. 5.50/- per cubic meter. In addition, the appellant was also required to pay local fund cess or any other tax as may be fixed by the government. The appellant was required to make its own arrangement at its own cost for drawl of water from the water resource of the government to the plant - The appellant has to pay water rates/water charges depending on the quantity of water drawn by the appellant. The Agreement also deals with a situation where there can be reduction or shortage in the water supply. This clearly means that the Agreement is for supply of water and not mere access to water source.
It is, therefore, more than apparent that the Agreement is for supply of water by the government to the appellant and is not for assignment of any right to the appellant to use the natural resources of the government.
The appellant is justified in asserting that the Agreement executed between the appellant and the government is for supply of water for which charges are paid by the appellant on the basis of volume of water drawn and it is not a case of assignment of right to use natural resources of the government - no service was provided by the government to the appellant. The impugned order, therefore, deserves to be set aside on this ground alone.
Appeal allowed.
-
2024 (5) TMI 277 - CALCUTTA HIGH COURT
Exemption from Service Tax - reimbursement expenses - whether the service tax component, which is remitted by them as service provider has to be reimbursed by the recipient KMC? - HELD THAT:- An order of adjudication requires the authority to not only consider the respective stand of the parties but also to appreciate the documents and details, which may be placed before the authority for consideration. These essentially involves adjudication into facts, which cannot be done in exercise of jurisdiction under Article 226 of the Constitution of India solely based upon affidavits. Therefore, the matter has to necessarily go back to the adjudicating authority for fresh consideration.
The matters are remanded back to the adjudicating authority for a fresh decision - Appeal allowed by way of remand.
-
2024 (5) TMI 276 - CESTAT NEW DELHI
Rejection of refund claim - GTA Service - time limitation - refund claim is filed after the expiry of time limit prescribed - principles of unjust enrichment - HELD THAT:- The scope of remand was a simple factual verification but the original adjudicating authority in sheer violation of judicial discipline has readjudicated the issue about impugned activity to fall or not under the scope of GTA Services. As already observed, the same was not the point raised even in the impugned show cause notice. The orders under challenge in both these appeals are not only an outcome of judicial indiscipline but are also held to be beyond the scope of show cause notice. Commissioner (Appeals) vide the impugned order has tried to distinguish as far as the principles of res judicata shall or shall not apply to the given facts.
It is observed that there is a fundamental material change whenOrder-in-Original subsequent to final order of this Tribunal has been passed that Apex Court has decided the issue holding that the activity is covered under GTA - these findings are not sustainable as the classification was not the subject matter of the impugned show cause notice.
The entitlement of appellant for the impugned refund, the issue of time bar and the issue of unjust enrichment have already stands decided in favor of the appellant including the issue of classification of the impugned activity of transportation (at least for this particular case). The refund claim has wrongly been rejected. The case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS [2017 (7) TMI 494 - SUPREME COURT] is held to have wrongly been applied retrospectively.
The Commissioner (Appeals) have traversed while passing the impugned orders in both these appeals. The order are contrary to the findings of this Tribunal amounting to an act of Judicial indiscipline. Accordingly, the impugned order stands set aside.
Appeal allowed.
-
2024 (5) TMI 275 - CESTAT NEW DELHI
Levy of service tax - Auction of abandoned imported goods by the CONCOR - ground rent/storage rendered towards the un-cleared/un-claimed cargo of the importer - Amount accrued to CONCOR under Section 150(2)(d) of the Customs Act, 1962 - consideration for the provision of storage and warehousing services or not - HELD THAT:- It is agreed with the findings recorded by the Adjudicating Authority in view of the decision of this Tribunal in COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, RAIGAD VERSUS M/S. BALMER LAWRIE AND CO LTD. [2015 (11) TMI 902 - CESTAT MUMBAI] where it is held 'the auction charges adjusted towards warehousing charges cannot be considered as receipt of any services and hence not liable to demand of service tax.'
What emerges from the various decisions is that the issue whether the service tax can be demanded on the sale proceeds of the auction of the abandoned imported goods is no longer res integra and has been decided in favour of the assessee and it has been settled that in the whole transaction, no service recipient exists and, therefore, there is no question of providing any service to any person.
There are no reasons to differ from the views consistently taken by the different Benches and, therefore, the present appeal by the Revenue has no merits and the same is accordingly dismissed - appeal dismissed.
-
2024 (5) TMI 274 - CESTAT NEW DELHI
Levy of service tax under Reverse Charge Mechanism (RCM) - GTA service - no consignment note issued - HELD THAT:- The issue is no longer res integra and has been consistently decided in favour of the assessee by the various co-ordinate Benches of the Tribunal - Reliance can be placed in the case of CHARTERED LOGISTICS LIMITED VERSUS C.C.E. -AHMEDABAD-II [2023 (7) TMI 883 - CESTAT AHMEDABAD] where it was held that 'it is settled that a person even if provides Goods Transportation service but if he does not issue Consignment Notes/LR, he cannot be brought under the ambit of GTA.'
Thus, the settled principle of law is that even if a person has provided goods transport service but has not issued the consignment note, service tax from that person cannot be recovered under the category of GTA. The case of the appellant is on the same footing as he availed the services of individual transporters and truck owners and in the absence of issuing the consignment note, the appellant cannot be made liable to pay service tax under the category of GTA.
There are no reason to sustain the impugned order and the same is accordingly set aside - appeal allowed.
-
2024 (5) TMI 202 - GUJARAT HIGH COURT
Exemption from service tax - agreement with DTDC for transportation and hiring buses - exemption claimed as per the amended list of categories of transport goods vehicles - HELD THAT:- It is not in dispute that the show-cause notice is issued on the basis of the information obtained from the Income Tax Department with regard to returns filed by the petitioner as well as Form No. 26AS (TDS), which reflects the amount of TDS deducted by the recipient for commission under Section 194 of the Income Tax Act, 1961.
On perusal of the facts and the documentary evidence placed on record, it is apparent that the notice issued by the respondent authority was not received by the petitioner and therefore, the petitioner could not file reply.
It is clear that the show-cause notice issued by the respondent is contrary to the provisions of the Finance Act, 1994 without disclosing the facts as to what type of services is rendered by the petitioner for which the service tax was leviable. As it appears from the facts of the case, the petitioner was rendering GTA services, for which the petitioner was not liable to pay the service tax on the basis of reverse charge mechanism. The entire basis of the show-cause notice is frustrated. The respondent authority assumed the jurisdiction without there being any basis for issuing the show-cause notice as the show-cause notice could not have been issued only on the basis of the information retrieved from the Income Tax Department in Form 26AS (TDS).
The SCN is liable to be quashed and set aside - Petition allowed.
-
2024 (5) TMI 201 - CESTAT NEW DELHI
Non-payment of service tax - aviation services - failure to provide unit wise and year wise information in respect of amount received as aviation income by the appellant or by its other unit at Delhi and the service tax, if any, paid - territorial jurisdiction - time limitation - HELD THAT:- The documents on record establish that the income shown in the returns as well as balance sheet is one amount under the head of “aviation income” but the activities performed are two separate activities. One is Supply of Tangible Goods by chartering the aircraft and another is dry leasing the aircrafts along with all its control and possession. The said activity of leasing out the aircraft with all rights of use therein to the lessee, to our understanding is a deemed sale under Article 366 (29A) of the Constitution and thus is excluded from the charge of service tax under Section 65(105)(zzzzj) and Section 66B of the Act. Thus, it becomes clear that the income earned by M/s. JSPL, Delhi from dry leasing arrangements is not chargeable to service tax during the relevant period but value for this activity is included in the impugned amount.
It was mandatory for the department as well as the adjudicating authority to take note of the bifurcation which was provided by the appellant at very initial stage of filing reply to the show cause notice and also the C.A. Certificate dated 10.03.2016 filed subsequently.
Territorial Jurisdiction - HELD THAT:- The commissionerate, Raipur had no jurisdiction to issue the show cause notice demanding the tax for such service which was provided by the appellant’s unit in Delhi.
Time Limitation - Suppression of facts or not - HELD THAT:- The tax on the amount receipts stands already discharged by M/s. JSPL Delhi. Thus, it becomes crystal clear that the present is not at all a case of tax evasion. Appellant was regularly filing the returns, is found to have maintained the proper documents. Question of alleged suppression does not at all arise. The extended period has wrongly been invoked. The entire period of demand gets hit by the bar of limitation.
The order under challenge is hereby set aside. Appeal stands allowed.
-
2024 (5) TMI 200 - CESTAT AHMEDABAD
Refund of of Service Tax paid under club or association services - doctrine of mutuality applicable - incidence of duty passed on not - hit by mischief of unjust enrichment as provided under Section 11B of Central Excise Act, 1944 or not - HELD THAT:- It is found that even the aspects of taxability decided by the Hon’ble Supreme Court in STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT] is on the principle that due to doctrine of mutuality no service exists between the club or association and its members. When the Hon’ble Supreme Court held that the club or association and its members are not two distinct identity and there is a mutuality of interest between both of them on that basis only it was held that since no service provider or service recipient exists service tax is not payable. On the same principle, if any service tax is paid, it has gone from one hand to other within the same entity it cannot be said that the incidence of the service tax has been passed on.
It can be seen that the Learned Commissioner (Appeals) held that unjust enrichment is not applicable due to principle of mutuality, it is completely agreed with the finding of the commissioner (Appeals) in the present case.
The impugned orders are legal and correct which do not require any interference - the impugned order is upheld - Revenue’s appeal is dismissed.
........
|
