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Service Tax - Case Laws
Showing 221 to 240 of 30966 Records
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2025 (2) TMI 592
Short payment of service tax - demand confirmed without classifying the category of the taxable service - demand of interest on deposit made without interest.
Short payment of service tax - HELD THAT:- The issue involved in the matter is in respect of the demand of Rs 2,17,314/- is not in respect of the services provided by the appellant to M/s Hindalco, but is in respect of the services provided by the appellant else where - the demand is not even in respect of the consideration received from M/s Hindalco, Renukoot, as the appellant has paid the service tax due on the said consideration. Appellant had been issuing the invoices to M/s Hindalco for the services provided and have been receiving the gross consideration along with the service tax due against the provision of the said services. They also had been providing the services else where on which service tax was not paid. This amount has been found from the comparison of the figures in the profit and loss account of the appellant and the amount of consideration received by the appellant from M/s Hinndalco.
As the return for the period October 2009 to March 2010 would have been due only in the month of April 2010, the Show Cause Notice issued for the period 2009-10 on 16.03.2011 is well within the normal period of limitation and cannot be disputed on any account.
Demand of interest for the period 2008-09 - appellant has deposited the tax for the period on 12.09.2009 - HELD THAT:- From the appellant has deposited the after receiving the same from the M/s Hindalco as per Voucher No 960611770, 222SKS-UCOT-02-09-2009 dated 02.09.2009. The service tax has been deposited as soon as the same was received by the appellant. At the relevant time the service tax was payable on the receipt basis and not the accrual basis. Thus there are no delay in the payment of this amount to the exchequer. Hence the proceedings demanding interest in respect of this amount and consequent penalties imposed under section 76 of the Finance Act, 1994 cannot be justified. Thus the demand of interest made in respect of this amount along with the penalty imposed set aside.
Conclusion - The appellant has clearly suppressed the value of the gross consideration received. ii) Demand of Service Tax to the tune of Rs 2,17, 314/- along with interest (Section 75) and penalties (Section 78) imposed is upheld. ii) Demand of interest on the amount of Rs 4,17,179/- deposited by the appellant on 12.09.2009 is set aside along with the penalties imposed under Section 76.
Appeal allowed in part.
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2025 (2) TMI 591
Refund of CENVAT credit arising from the balance of Education Cess and Secondary & Higher Education Cess, as per the revised ST-3 return for the period of June-September 2017 - sub-sections (3) and (9) of Section 142 of the CGST Act, 2017, read with Section 11B of the Central Excise Act, 1944 - main ground on which the refund application of the appellants was held as not entertainable in the impugned order is, that there exists no provision under Rule 5 of the CCR, for cash refund of excess CENVAT credit and therefore the refund in terms of proviso (c) to Section 11B(2) ibid, is not permissible in the case of the appellants.
HELD THAT:- The provisions of Sections 142(3) and 142(9)(b) of the CGST Act, is a transitional arrangement wherein it has been specifically provided that such provisions apply as a non-obstanate clause whereby such provisions will have overriding effect, if anything to the contrary is contained under the provisions of existing law i.e., Central Excise Act, 1944, except for the provisions of sub-section (2) of section 11B ibid. Thus, all the conditions of the requirements of Section 11B ibid as it remained under the existing law, other than those relating to Unjust Enrichment clause contained in Section 11B(2) ibid would apply, only if they are not contradictory to the provisions of Section 142(9)(b) of the CGST Act, 2017, in dealing with refund of ‘CENVAT credit’. It is also on record, that there is no dispute with respect to fulfillment of unjust enrichment angle in the case of the present refund, as the authorities below have not raised any objection with respect to these. Further, the appellants have also submitted that the amount claimed as refund has not been passed to any other person and the amount of Rs.25,52,385/- reversed has been shown in their books of accounts and the return filed with the department.
The proviso (c) to Section 11B(2) ibid, cannot be read to state that refund of such excess CENVAT credit has not been provided under Rule 5 of the CCR, as the entire arrangement of refund of excess CENVAT credit is arising as a transitional arrangement by moving from Excise duty/Service Tax regime to GST regime.
There are merit in the argument of the learned Advocate for the appellants that they are eligible for refund of duty in cash under Section 11B(2)(d) ibid, inasmuch as the phrase ‘duty of excise’ used in Section 11B(2)(d) ibid refers to duties of excise leviable under Section 3 of the Central Excise Act, 1944 and it also includes CENVAT credit, which is nothing but such duty of excise paid on inputs or service tax paid on input services, which have been allowed for taking credit in terms of Rule 3 of the CCR. In view of the above discussions, the impugned order is not legally sustainable and the appellants are eligible for refund of excess CENVAT credit paid by them, and specifically allowed to be refunded in terms of Section 142(9)(b) of the CGST Act, 2017.
When the Central Excise Act, 1944 amongst other laws relating to old tax regime was repealed by Section 174 of the CGST Act, 2017 and that the CCR is also being superseded vide Notification No.20/2017-C.E. (N.T.) dated 30.06.2017, by the Central Government for smooth implementation of transfer to GST regime in indirect taxation, the provisions of Section 142 of the CGST Act, 2017 are sufficient to provide for the tax administration for sanction of cash refund in circumstances stated therein, and there is no need and it is not legally feasible to make any specific provision in CENVAT statute itself, for enabling cash refund of excess CENVAT credit relating to earlier regime while moving to the new GST regime.
The Co-ordinate Bench of this Tribunal in DY. GEN. MANAGER (FINANCE & EXCISE) BHARAT HEAVY ELECTRICALS LTD. VERSUS COMMISSIONER, CGST & CE, KANPUR. [2022 (4) TMI 1637 - CESTAT ALLAHABAD], have held that rejection of refund of accumulated balance amount of credit on education cess, secondary and higher education cess and Krishi Kalian cess by original authority and upheld by the Commissioner (Appeals-Thane) cannot be legally sustained and set aside the impugned order of rejecting the appeal filed by the appellants in that case.
Conclusion - There are no merits in the impugned order passed by the learned Commissioner (Appeals) to the extent it has rejected the refund of excess CENVAT credit, which is contrary to the legal provisions of Section 142(3) and Section 142(9)(b) of the CGST Act, 2017 and thus, it does not stand the scrutiny of law. Therefore, by setting aside the impugned order dated 18.11.2020, the appeal is allowed in favour of the appellants, with consequential relief, with respect to refund of excess CENVAT credit of Rs.25,52,385/- payable to the appellants.
Appeal allowed.
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2025 (2) TMI 590
Classification of service - Manpower Recruitment Agency service or not - supplying labor and loading/unloading services to a company - Scope of SCN.
Classification of service - HELD THAT:- The appellant is only supplying the labour on daily basis and also for loading & unloading to Markfed but he does not fall under the definition of Manpower Recruitment Agency as provided in Section 65(68) of the Finance Act, 1994 and therefore not liable to pay any service tax on the said charges.
Scope of SCN - HELD THAT:- The impugned order is beyond the show cause notice and the Order-in-Original because in the show cause notice as well as in the Order-in-Original it has not been stated that the appellant has recovered service tax from the Markfed and not deposited the same to the Government Exchequer in terms of the provisions in Section 73(A) of the Act. This finding of the Ld. Commissioner (Appeals) is not sustainable in law as the same is beyond the show cause notice and the Order-In-Original and further alleged services for loading and unloading Taucks/LCV are not covered under manpower recruitment or supply agency as provided in Section 65(68) of the Finance Act, 1994.
Conclusion - i) The demand for service tax was not justified as the appellant's services did not fall under the category of a Manpower Recruitment Agency. ii) The allegations made in the impugned order went beyond the scope of the original documents and were not supported by the evidence.
The impugned order is not sustainable in law - Appeal allowed.
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2025 (2) TMI 561
Issuance of the show cause notices (SCNs) by the respondents without pre-SCN consultation - violation of Master Circular dated 10th March 2017 or not - SCNs issued fall within the exceptions outlined in the Circular No. 1079/03/2021-CX dated 11th November 2021 or not - HELD THAT:- The SCN itself is absolutely vague and without reference to any of the contentions which are raised by the petitioners in pre-consultation which is already decided by the respondents-authorities vide order dated 19.10.2023 passed disposing such contentions during the pendency of these petitions.
In the facts of the case, the Adjudicating Authority has also passed an Order-in-Original dealing with such contentions of the petitioners confirming the demand. However, the show cause notice dated 29th September, 2020 did not contain any of the grounds on which Order-in-Original is passed or the grounds on which the objections are disposed of in pre-consultation during the pendency of these petitions. In such circumstances, the respondents-authorities is required to issue a fresh show cause notice in accordance with law.
In view of the decision of this Court in case of L AND T Hydrocarbon Engineering Ltd. [2022 (4) TMI 70 - GUJARAT HIGH COURT], it is opined that none of the show cause notice except Special Civil Application No. 5685 of 2022 can be sustained in absence of pre-consultation notice. Even in Special Civil Application No. 5685 of 2022, the show cause notice contained the ingredients of the issue of liability of the petitioner but it only refers to the difference in value of income as per Form 26AS and as per Form ST-3 returns filed by the petitioner. In such circumstances, the show cause notices issued in the respective petitions are hereby quashed and set aside and therefore as a consequence the Order-in-Original if any shall also be quashed and set aside, with a liberty to the respondent-Department to initiate the proceedings or to revive the original show cause notice subject to outcome of the pending proceedings before the Hon’ble Apex Court in accordance with law.
Conclusion - Absence of mandatory pre-SCN consultation is fatal the the present SCN.
Petition disposed off.
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2025 (2) TMI 560
Abatement of appeal - Non-payment of Service Tax under Goods Transport Agency Services on freight amounts paid to M/s. Gaerish Logistics (P) Ltd. for handling export goods - eligibility for exemption under N/N. 18/2009-ST. - HELD THAT:- As the NCLT, Chennai has ordered for Liquidation of the appellant vide its order dated 19.03.2018 and as the Liquidator has confirmed non receipt of claim from the Deputy Commissioner of GST and Central Excise, Trichy and also as no application as per Rule 22 has been made by the Official Liquidator appointed by the NCLT for continuance of the appeal, the appeal should abate in terms of the above referred Rule.
As such the appeal gets abated in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982.
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2025 (2) TMI 559
Denial of CENVAT Credit - capital goods/input services - Electrical Transmission Tower Materials - 132 KVD/CTLNT Towers - Mild Steel Section for Templates - Health Insurance of staff and family - Consultancy for construction of railway line - Supervision charges for construction of Electrical Transmission Towers - denial of CENVAT Credit on the grounds of Excess credit availed and Credit availed on improper documents - applicability of the extended period of limitation - imposition of penalties.
Whether the goods such as Electrical Transmission Tower Materials, 132 KVD/CTLNT Towers, and Mild Steel Section for Templates qualify as capital goods under Rule 2(a) of the CENVAT Credit Rules, 2004? - HELD THAT:- These items have been used by the Appellant in relation to transmission of electricity through Power Transmission Lines and thus the same are to be treated as components or accessories of capital goods falling in terms of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. These Power Transmission lines cannot be erected without transmission towers; the transmission towers, hence, are the necessary component of Power Transmission Line and thus the same are to be treated as the components or accessories of the capital goods falling under clause (i) of the Rule 2(a)(A) of the CENVAT Credit Rules, 2004; as per clause (iii), the components, spares and accessories of the goods specified at clause (i) and (ii) of Rule 2(a)(A) of the Rules are eligible as capital goods - the transmission towers are eligible capital goods in terms of clause (iii) of Rule 2(a) (A) of the CENVAT Credit Rules, 2004 and the CENVAT Credit of duty of Rs.90,44,256/- has correctly been correctly availed by the Appellant in respect of such goods.
This issue is no more res integra as an identical issue has already been examined in the case of M/s. Bharti Airtel Ltd. v. Commissioner of Central Excise, Pune [2024 (11) TMI 1042 - SUPREME COURT] wherein the Hon’ble Apex Court has allowed the credit in respect of similar items/goods holding the same as components/accessories of capital goods falling under sub-clause (i) of Rule 2(a)(A) of the CENVAT Credit Rules, 2004.
Thus, the Appellant is eligible for the credit in respect of “Electrical Transmission Tower Materials”, “132 KVD/CTLNT Towers” and “Mild Steel Section for Templates”. Accordingly, the denial of CENVAT Credit to the appellant on this count is set aside.
Whether services like Health Insurance of staff and family, Consultancy for construction of railway line, Supervision charges for construction of Electrical Transmission Towers, and others qualify as Input services under Rule 2(l) of the CENVAT Credit Rules, 2004? - HELD THAT:- The provision of medical facilities within the Port Area is a pre-requisite for obtaining approval for the port under the Major Port Trust Act, 1963 and the Indian Ports Act, 1908. It has been stated by the Appellant that they have an insurance policy to cover the hospitalization expenses of the employees and their family members as per the company's policy of the 'Corporate Social Responsibility’. Therefore, the same are input services for availing credit of Service Tax - the denial of credit in respect of “Health Insurance of staff and family” vide the impugned order is not sustainable.
Whether the denial of CENVAT Credit on the grounds of Excess credit availed and Credit availed on improper documents is justified? - HELD THAT:- The submission of the Appellant that discrepancies pointed out by Revenue in the Show Cause Notice such as Telephone bills in name of employee, non-mentioning of Service Tax Registration number in invoices, invoices in name of previous entity viz. Tata Steels, Jurisdictional details not mentioned, etc., are procedural infractions due to which substantive benefit of credit cannot be denied to the Appellant, are agreed upon. Accordingly, the CENVAT Credit availed by the Appellant in this regard remains allowed, as they are covered within the definition of 'input services'.
However, the Appellant is liable to reverse the credit of Rs.25,544/- out of the credit of Rs.9,65,903/-, along with interest, which the Appellant had agreed to reverse before the ld. adjudicating authority. Consequently, the Appellant is eligible for the credit of Rs.9,40,359/- [Rs.9,65,903/- - Rs.25,544/-] denied by the ld. adjudicating authority and they are liable to reverse the credit of Rs.25,544/-, along with interest, if not reversed already.
Extended period of limitation - HELD THAT:- The issues involved in the present appeal were subject matters of litigation before various legal fora. Further, the Department has not brought in any evidence to establish the allegation of suppression with intention to evade tax on the part of the Appellant. In these circumstances, the invocation of extended period of limitation is not sustainable. Therefore, the Appellant succeeds on merits as well as on limitation.
Levy of penalties - HELD THAT:- The penalties are not imposable on the Appellant. Accordingly, the penalties imposed are set aside.
Conclusion - i) The denial of CENVAT Credit for items listed as capital goods and input services was set aside. ii) The Appellant was required to reverse specific amounts of credit they agreed to, but the remaining credit was deemed eligible. iii) The demand raised by invoking the extended period of limitation was set aside, and no penalties were imposed.
Appeal disposed off.
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2025 (2) TMI 558
Liability to pay service tax - rent-a-cab scheme operator's service - tour operator's service - business auxiliary service - abatement under N/N. 01/2006-S.T. for rent-a-cab services and N/N. 38/2007-S.T. for tour operator services - extended period of limitation - penalties u/s 78 and Sections 77(1)(a) and 77(2) of the Finance Act, 1994.
Abatement under N/N. 01/2006-S.T. for rent-a-cab services and N/N. 38/2007-S.T. for tour operator services - HELD THAT:- The appellant submits that rightly paid service tax on the liability payable by them and differential Service Tax liability confirmed in the impugned order is on account of not allowing the abatement provided under N/N. 01/2006-S.T. dated 01.03.2006. The appellant claims that they are eligible for the abatement which has not been extended to them by the ld. adjudicating authority. However, it is found that the ld. adjudicating authority has observed that the appellant has raised the bill for Service Tax on the gross amount without availing any abatement. It is found that the appellant has not disputed this finding of the Ld. adjudicating authority. It is also found that the appellant has also not produced any evidence to substantiate their claim of eligibility for the abatement.
Extended period of limitation - HELD THAT:- The appellant has been registered with the Service Tax Department and had been paying Service Tax regularly and also filing returns. Thus, the demand of Service Tax short paid, if any, should have been raised within the normal period of limitation as there is no suppression of facts with intention to evade payment established in this case. It is held that the extended period of limitation cannot be invoked to demand Service Tax in this case. Accordingly, the demand of Service Tax by invoking the extended period of limitation is not sustainable.
Penalty under Section 78 of the Finance Act, 1994 - HELD THAT:- Penalty under Section 78 of the Finance Act, 1994 is not imposable on the appellant. Consequently, the penalty imposed under Section 78 of the Act is set aside.
Penalties imposed under Section 77(1)(a) and Section 77(2) of the Finance Act, 1994 - HELD THAT:- The appellant has not made any submission for non-imposition of penalties under these sections. We find that the appellant has not registered for rendering service under the category of ‘tour operator’s service’ and ‘business auxiliary service’ . Thus, the penalties under Sections 77(1)(a) and Section 77(2) of the Finance Act, 1994 has been rightly imposed. Accordingly, the penalties imposed under these sections upheld.
Conclusion - i) The demands for Service Tax under the categories of 'rent-a-cab scheme operator's service', 'tour operator's service', and 'business auxiliary service' are not sustainable for the extended period of limitation due to lack of evidence of suppression or intent to evade tax. ii) The appellant is liable to pay Service Tax for the normal period of limitation along with interest. iii) The penalty under Section 78 of the Finance Act, 1994 is not imposable, while penalties under Sections 77(1)(a) and 77(2) are upheld.
Appeal disposed off.
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2025 (2) TMI 557
CENVAT Credit - dumpers/tippers were received from M/s SREI Equipment Finance Pvt. Ltd. (SEFPL) under operating lease agreement and not registered in their name - penalty - demand of interest - extended period of limitation.
HELD THAT:- The issue relating to availment of Cenvat Credit on Dumpers/Tippers prior to 22.06.2010 is no more res integra. Reliance placed on the decision of Commissioner of Central Excise, Bhopal vs Hindustan Copper Ltd [2016 (8) TMI 1127 - CESTAT NEW DELHI] in the regard. This Tribunal in the case of Commissioner, C.Ex & CGST, Delhi-III vs Brahmaputra Infrastructure Ltd., [2018 (7) TMI 438 - CESTAT NEW DELHI] has held 'appellant would be eligible for Cenvat credit 6 ST/53655 of 2015 on dumpers / tippers as inputs which are used for providing the output service. However, the controversy stand resolved with effect from 22/06/2010 with issue of notification No. 25/2010-CE which has amended the Cenvat Credit Rules to allow Cenvat credit for dumpers / tippers registered in the name of service provider for providing taxable service for providing site formation etc.'
The definition of capital goods in clause (C) was inserted to provide availment of Cenvat credit on Dumpers/Tippers provided such dumpers and tippers are registered in the name of the service provider. When there was ambiguity in the said Rules, the Tribunal and other Appellate forum allowed the credit on such dumpers/tippers following the Apex Court decision in the case of Belani Ores Ltd. Etc. vs. State of Orissa Etc. [1974 (9) TMI 115 - SUPREME COURT]. However, once a specific provision had been inserted in the Cenvat Credit Rules, 2004, it would have to be given a strict interpretation. In the present case, it is noted that the dumpers/tippers on which Cenvat credit had been availed, was not registered in the name of the appellant, as it was in the name of SREI Equipment Finance Pvt Ltd. As the aforesaid notification clearly laid down that such credit could be availed only if the dumpers/tippers were registered in the name of the service provider, the same was not available to the appellant.
Demand of interest - HELD THAT:- Supreme Court in the case of Pratibha Processors & Ors vs Union of India & Ors [1996 (10) TMI 88 - SUPREME COURT] has held that “Interest is compensatory in character and is imposed on an assessee who has withheld payment of any tax as and when it is due and payable.” Accordingly, the demand for interest is also upheld.
Extended period of limitation - HELD THAT:- Prior to the N/N. 3/2011-CE(NT) dated 01.03.2011, the issue was settled in the favour of the appellant by several decisions of the Tribunal and other appellate fora. The appellant was under the genuine belief that the Cenvat credit on such dumpers/tippers were available to him, under Rule 4(3) of the said Rules. There is no evidence of their intention to evade duty. Thus, the penalty under Rule 14 is not attracted. The demand for the extended period is set-aside.
Conclusion - i) Since the dumpers/tippers were not registered in the appellant's name, Cenvat Credit was not admissible. ii) The demand of interest upheld. iii) Demand for the extended period is set-aside.
Appeal allowed in part.
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2025 (2) TMI 556
Levy of service tax - value of turnover towards cable network service charges and sale of Set Top Box (STB) as shown in the Profit & Loss account enclosed with ITR-V Income Tax Return for the Financial Year 2014- 2015 in terms of the Finance Act, 1994 - HELD THAT:- Though the SCN was issued in the present case prior to the issue of the instructions dated 26.10.2021, the crux of the above instructions squarely apply to the present case. Firstly, the original authority did not discuss the issues under consideration for coming to a conclusion and for confirming the demands raised in show-cause notice, and the learned Commissioner (Appeals) had upheld such order, on the basis of the decision taken by the Tribunal in the case of UCN Cable Network Pvt. Ltd. [2016 (9) TMI 188 - CESTAT MUMBAI] without discussing how the present facts of the case fits in to such relied upon decision.
The issue of supply of Set Top Box (STB) by the MSO to their customer, whether it would amenable to levy of service tax or not, was examined by the Co-ordinate Bench of this Tribunal in the case of Dish TV India Limited Vs. Commissioner of Central Excise and Service Tax, Aurangabad [2023 (7) TMI 1238 - CESTAT MUMBAI], wherein it was held that supply of STBs by the appellants is not a service, rather it is a deemed sale, leviable to VAT under the State legislature.
The appellants themselves have correctly determined the service tax payable by them, from their financial records duly certified by the Chartered Accountant, and thus have fulfilled all the requirements for discharge of service tax liability along with applicable interest and penalty voluntarily, before filing this appeal before the Tribunal on 28.06.2021. In the above circumstances and on the basis of the discussions, there are no strong grounds found to hold that the appellants did not pay service tax in respect of the differential amount demanded in the show cause proceedings, owing to the reason that the service tax on the taxable value of turnover relating to the financial year 2014-2015 as detailed, have been duly paid by the appellants and the same has been accepted by the Department.
Conclusion - The nature of activity undertaken by the DTH operator in providing STB to a subscriber, is provision of an equipment, which is one-time activity, and it is not a part of DTH service in providing television channels for viewing by the subscriber. STBs are deemed sales and not subject to service tax.
The impugned order set aside - appeal allowed.
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2025 (2) TMI 521
Seeking quashing of SCN - Delay in adjudication of SCN - Adoption of different method of valuation of service provided by the petitioner for payment of service tax - HELD THAT:- It is not to be resorted by the department where particular there is a conflicting view of the Central Excise Officer. In event, the Audit objection and decision to raise objection by the department is an internal arrangements between the department. The fact remains that the department itself had concluded in Reply to Statement of Facts.
In fact, the respondent had also recommended for closure and dropping of the proposal in the show cause notice. However, the issue is kept alive for over two decades and for the first time the department woke up only on 19.01.2021, pursuant to which the Principal Commissioner has accorded permission for adjudication. The adjudication of the show cause at this distant point of time is unnecessary and unwarranted, particularly in the light of the SoF of the department having difference of opinion with the CERA audit objection. Therefore, the impugned show cause notice ought not to have been issued and not proceeded and in any event ought to have been dropped. The fact remains that the petitioner has discharged service tax liability as a service provided in works contract service as defined in Section 65 (95) (ZZZA) of the Finance Act, 1994.
This Court is of the view that the writ petition has to be allowed. The excess amount deposited by the petitioner during the course of investigation by CERA has to be refunded by the respondent within a period of two months together with interest @ 6% from the date of payment till the date of payment.
Conclusion - i) The delay in adjudication of the show cause notice warranted quashing of the notice. ii) The petitioner was entitled to alter the basis of valuation for service tax payment as per the Finance Act, 1994.
Petition allowed.
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2025 (2) TMI 520
Refund of service tax paid on services used in export of goods during the quarter October-December, 2008 in terms of N/N. 41/2007-ST dated 06.10.2007 - rejecton of refund only on the ground that the services of CHA, taxable under Section 65(105)(h) of the Service Tax Act, 1994, were brought under the category of specified services vide N/N. 17/2009-ST dated 07.07.2009 - HELD THAT:- This finding of the learned Commissioner (Appeals) is wrong because the services of CHA were brought under the category of specified services w.e.f. 01.04.2008 vide Notification No. 17/2008-ST dated 01.04.2008 vide which Notification No. 41/2007-ST dated 06.10.2007 was amended. So, it is wrongly held by the learned Commissioner (Appeals) that the services of CHA were not covered. Further, it is found that otherwise also the impugned services namely DEPB Charges, Terminal Handling Charges, Postage Charges etc. are covered under the specified services as provided in the said Notification.
It is also found that service tax on the impugned services has been paid under the category of CHA and therefore, classification of the service cannot be disputed at CHA’s end.
Conclusion - The disputed services such as DEPB Charges, Terminal Handling Charges, and Postage Charges fell under the specified services as per the notification. Refund remains allowed.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 519
Levy of service tax - restaurant service without air conditioning facility - appellant argued that the air conditioning was removed, as it lacked the power capacity to run AC - HELD THAT:- In his statement recorded under Section 14 of the Central Excise Act, the appellant stated that on 8.7.2010 when he obtained Bar licence he had air conditioning facility in his Restaurant-cum-Bar. However, this facility of air conditioner was removed and instead air coolers was provided by the end of year 2010 till 31.12. 2012. Meanwhile, on enquiry with the State Excise Department, the copy of the application along with the declaration as submitted by the appellant for obtaining the liquor licence was produced, which clearly mentioned that the restaurant is air conditioned. It also appears that this matter was verified by the Central Excise Officer as to whether the appellant had submitted any further communication for removing the air conditioning facility and instead providing air cooler facility at the restaurant. However, the State Excise Officer vide letter dated 09.09.2013 informed that no such communication had been made by the appellant.
It is clear that the statement made by the appellant on 28.12.2012 was a mere cover to avoid any service tax liability and there is no substantive proof in support thereof. On the contrary, it is on record that in the initial application made by the appellant on 23.6.2010 for availing the liquor licence the restaurant had air conditioning facility. There is nothing to rebut this documentary evidence and therefore the case of the appellant is not acceptable.
In similar facts and circumstances in the case of Gurukripa Yuvraj Veg. & Non Veg. Restaurant vs. Commissioner and Additional Director General, Jaipur [2023 (8) TMI 1049 - CESTAT NEW DELHI.], wherein the proprietor was the same, Sh. Charan Pal Singh, has decided the matter and it was held that 'We, therefore do not agree with the aforesaid order of the Commissioner (Appeals). Unless and until, the appellant is able to produce any cogent and substantive evidence in support of his statement that he does not have the AC facility in the restaurant, he is not eligible to claim the benefit of the exemption notification. The burden lies on the appellant to prove his case that he falls under the exemption Notification as there is no AC facility in his restaurant, which he has failed to do.'
Conclusion - The statement made by the appellant on 28.12.2012 was a mere cover to avoid any service tax liability and there is no substantive proof in support thereof. There is nothing to rebut this documentary evidence and therefore the case of the appellant is not acceptable.
There are no infirmity in the impugned order. Consequently, the appeal is dismissed.
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2025 (2) TMI 483
Levy of service tax upon the sale of lottery tickets - Constitutional validity of clause (zzzzn) to sub-section (105) of Section 65 of Finance Act, 1994 as introduced vide Finance Act, 2010 - contravention of Article 248 of the Constitution of India read with Entry 97-List I to the Seventh Schedule thereto - principal-to-principal transaction - scope of "betting and gambling" - HELD THAT:- The parliamentary amendments made to the Finance Act, 1994, for the purpose of imposing service tax on the respondents assessees herein as ‘business auxiliary service’ under sub-section 19 of Section 65 of the said Act effective from 01.07.2003 and by way of the insertion of the Explanation to Section 65(19)(ii) of the Finance Act, 1994 culminated in the judgment of this Court in K. Arumugam [2024 (9) TMI 182 - SUPREME COURT]. In the said case, this Court held that the relationship between the Government of Sikkim and the assessees therein was not that of principal and agent but one of principal and principal. Therefore, up to the year 2010, the lis between the parties ended with the judgment in K. Arumugam.
For the period from 01.07.2010 till 30.06.2012, amendment was made to Section 65(105) by insertion of clause (zzzzn) which defined promotion, marketing, organizing or in any other manner assisting in organizing games of chance, including lottery, bingo or lotto in whatever form or by whatever name called, whether or not conducted through internet or other electronic networks as a “taxable service”. The Sikkim High Court observed that the said clause essentially means the conducting of lotteries within the scope and ambit of betting and gambling as per Entry 62 - List II of the Seventh Schedule of the Constitution and therefore, on the very same activity of betting and gambling, service tax cannot be levied.
The expression “lottery distributor or selling agent” was defined by inserting clause (31A) to Section 65B to mean a person appointed or authorized by a State for the purposes of promoting, marketing, selling or facilitating in organizing lottery of any kind, in any manner, organized by such State in accordance with the provisions of the Lotteries (Regulation) Act, 1998. Since “betting, gambling or lottery” was included in the Negative List, an Explanation was inserted to Section 66D(i) to say that the said expression “betting, gambling or lottery” shall not include the activity specified in Explanation 2 to clause (44) of Section 65B. Thus, the intent of the Parliament was that any transaction in an actionable claim (lottery being an actionable claim) would not include an activity carried out for the distribution of lottery by the distributor. In other words, such activity of the distributor would not amount to the activity of betting, gambling or lottery.
The expression “betting, gambling or lottery” in the Explanation to Section 66D(i) has to be given its true intent and meaning as conducting a lottery is nothing but an activity coming within the scope of betting and gambling. This is by the application of the principle of noscitur a sociis where the expression “lottery” takes its meaning from “betting and gambling”. Although a lottery ticket is nothing but an actionable claim, the conduct of a lottery scheme is nothing but a betting and gambling activity. Therefore, it is only Entry 62 – List II which enables the imposition of tax by the State Government. The activity of betting and gambling which includes conducting of a lottery is regulated under Entry 34 – List II, with Entry 62 – List II being the taxation entry.
By way of Finance Act, 2015, clause (a) of the Explanation to Section 67 containing the definition “consideration” was amended to include, inter alia, any amount retained by the lottery distributor or selling agent from gross sale of lottery tickets in addition to the fee or commission, if any, or, as the case may be, the discount received, i.e., the difference in the face value of the lottery ticket and the price at which the distributor or selling agent gets that ticket. The said amendment would have no consequence and bearing on the substantive provisions for the reasons that we have stated above. This is because the distributor buys at wholesale price from the State Government and sells it at a higher price to the retailer - the amendment made to clause [ii(a)] of the Explanation 2 to Section 65B(44) in the year 2016 that the expression “transaction in money or actionable claim” would not include any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out, inter alia, by a lottery distributor or selling agent on behalf of the State Government, in relation to promotion, marketing, etc. in accordance with the provisions of the Lotteries (Regulation) Act, 1998 is only an innocuous amendment which is only cosmetic in nature.
It is found that at each stage, the amendments made to the Finance Act, 1994, in order to impose service tax on the sole distributor/purchaser of the lottery tickets (respondents-assessees herein) have been unsuccessful. The amendment to the said definition would in no way detract from the substance of the relationship between the State Government and the sole distributor or purchaser of the lottery tickets which is one of principal to principal and not of principal-agent. There being no agency and no service rendered by the respondents-assessees herein as an agent to the Government of Sikkim, service tax is not leviable on the transactions between the purchaser of the lottery tickets (respondents-assessees herein) and the Government of Sikkim.
Conclusion - The sale of lottery tickets by the Government of Sikkim to the respondents-assessees is a principal-to-principal transaction, and the activity of conducting lotteries falls within the scope of "betting and gambling," which is under the State's jurisdiction.
There are no merit in the appeals filed by the Union of India and others. Hence these appeals are dismissed.
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2025 (2) TMI 482
Valuation of service tax - inclusion of certain charges collected by the appellants - logistics income constituted taxable service or not.
Inclusion of certain charges collected by the appellants - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax.
The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants & Technocrats Pvt Ltd v UOI, [2012 (12) TMI 150 - DELHI HIGH COURT], wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections.
The findings in the impugned order in appeal confirming the demand on port congestion charges, port storage charges, seal amendment charges and detention charges cannot sustain and are liable to be set aside.
Levy of service tax on differential income representing logistics income - HELD THAT:- This Tribunal in its decision in Tiger Logistics India Ltd v. Commissioner of Central Tax GST, New Delhi, [2023 (7) TMI 546 - CESTAT NEW DELHI] has also, after noticing a number of earlier decisions, held that the demand of service tax on mark up on ocean freight is not tenable in law. In the light of the aforesaid Tribunal decisions, the finding of the appellate authority holding the logistics income of the appellants as exigible to service tax, and demand upheld thereon, is unsustainable and liable to be set aside.
Conclusion - i) The findings in the impugned order in appeal confirming the demand on port congestion charges, port storage charges, seal amendment charges and detention charges cannot sustain and are liable to be set aside. ii) The finding of the appellate authority holding the logistics income of the appellants as exigible to service tax, and demand upheld thereon is unsustainable.
Appeal allowed.
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2025 (2) TMI 481
Valuation of service tax - inclusion of expenses incurred by the appellants, which were reimbursed by their clients in the assessable value - "Pure Agent" under Rule 5(2) of the Valuation Rules - invocation of the extended period of limitation - Penalties - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [2018 (3) TMI 357 - SUPREME COURT] which has considered the issue of liability to pay service tax on reimbursable expenses received by the service provider in the course of rendering services for the client, apart from the consideration received for rendering the services on which the client has discharged the liability to pay service tax. The Honourable Supreme Court affirmed the decision of the Delhi High Court in Intercontinental Consultants & Technocrats Pvt Ltd v UOI, [2012 (12) TMI 150 - DELHI HIGH COURT], wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections.
Extended period of limitation - Penalties - HELD THAT:- There are force in the contentions of the learned counsel for the appellants that the issue involved was of interpretational nature and no evidence of malafides has been adduced that would attract the extended period of limitation or warrant imposition of penalties.
Conclusion - i) The reimbursable expenses, not forming part of the consideration for services rendered, should not be included in the taxable value. ii) The invocation of the extended period of limitation was unjustified. iii) Penalties set aside.
The impugned order in appeal is set aside and the appeals are allowed.
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2025 (2) TMI 480
Levy of service tax - whether the activities of the appellant developer is exigible to service tax under construction of complex service for the period from January 2009 to March 2010? - HELD THAT:- The issue stands decided in the appellant’s favour by the decision of this Tribunal in the appellant’s own case in M/S. SMS GARDENS PVT. LTD. AND M/S. V.R. NACHIMUTHU (CBE) VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, SALEM [2021 (1) TMI 1213 - CESTAT CHENNAI]. In the said decision in para 4.1, the activities of the appellant have been discussed and it was held that 'The show cause notices in all these cases prior to 1.6.2007 and subsequent to that date for the periods in dispute, proposing service tax liability on the impugned services involving composite works contract, under ‘Commercial or Industrial Construction Service’ or ‘ Construction of Complex’ Service, cannot therefore sustain.'
Conclusion - For composite contracts involving transfer of property in goods, service tax liability would fall under Works Contract Service.
The impugned order in appeal upholding the impugned order in original of the adjudicating authority confirming the demand under construction of complex service together with demand of appropriate interest and penalties imposed, is unsustainable and is liable to be set aside - Appeal allowed.
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2025 (2) TMI 479
Levy of service tax - whether the activities of the appellant while engaged for transportation of petroleum products by road by the consignor HPCL can be subjected to levy of service tax as supply of tangible goods service? - HELD THAT:- The issue stands decided in the appellants’ favour by the decision of this Tribunal by the Final Order No.40368/2019 dated 21.02.2019 in M/s. Erode Lorry Owners Association Vs. The Commissioner of GST & Central Excise, Salem Commissionerate [2019 (3) TMI 43 - CESTAT CHENNAI] where it was held that 'Coming to the tax liability on Supply of Tangible Goods, from the agreement and other facts on record it is evident that the contract was for transportation of petroleum products on which service tax under GTA has been discharged by M/s. HPCL themselves. The nature and type of agreement between the two parties also service to indicate that there is no Supply of Tangible Goods involved in this matter. This being so, the demand made under this category also cannot be sustained and requires to be set aside.'
It is found from the annexure to the statement of demand No.34/2014 dated 16-10-2014 that for the year 2013-14, the amount received by the appellants on lorry stand parking rent and the amount received on building rent put together and sought to be taxed under renting of immovable property services is very much under the threshold limit for the said year as specified under the Notification 33/2012-ST dated 20-06-2012.
Conclusion - The transportation services provided did not fall under the category of supply of tangible goods service and that the amounts received under renting of immovable property service were within the exemption limit.
The impugned Order in Appeal is set aside. The appeal is allowed in toto.
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2025 (2) TMI 421
Jurisdiction of Adjudicating Authority to substitute a new order in place of the original order - rectification of mistake - mistake apparent on the face of record or not - HELD THAT:- Under Section 74 of Finance Act concerned Officer can rectify his order if any mistake apparent from the record. Therefore, Adjudicating Authority only rectifies any mistake which is apparently shows. The Adjudicating Authority cannot do anything which is not permissible in law.
Revenue relied on Hon’ble Supreme Court judgment in the case of Deva Metal Powders Pvt Ltd., Vs Commissioner, Trade Tax, UP 2007 (12) TMI 221 - SUPREME COURT] in which Hon’ble Supreme Court held that “a mistake which can be rectified is one which is patent, which is obvious and whose discovery is not dependent on any argument or elaboration, rectification of an order does not mean obliteration of order originally passed and its substitution by a new order. Where an error is far from self-evident, it ceased to be an apparent error.”
In this case Adjudicating Authority by Order-in-Original No. 88/2022- 23-Adjn dated 25.05.2022 substituted a new order in place of Order-in- Appeal No. 78/2022-Adjn dated 22.03.2022 which is beyond his jurisdiction.
Conclusion - The Adjudicating Authority exceeded its jurisdiction by substituting a new order in place of the original order, leading to the dismissal of the appeal.
There are no illegality or irregularity in the Order-in-Original - Appeal dismissed.
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2025 (2) TMI 420
Abatement claim - construction services - rejection of entire claim on the ground that the appellant had provided only ‘completion and finishing service’ and not ‘construction of commercial complex service’ - rejection of a part of the claim as being barred by limitation - burden pf prove - principles of unjust enrichment - HELD THAT:- The Hon’ble Supreme Court in Smt. J. Yashoda vs Smt. K. Shobha Rani [2007 (4) TMI 11 - SUPREME COURT], held that the rule which is the most universal, is that the best evidence which the nature of the case will admit shall be produced. So long as the higher or superior evidence is within a persons possession or may be reached by him, he shall give no inferior proof in relation to it. In the present case the Original Authority has at para 12.4 of the OIO, stated that the appellant had not furnished contract copies in spite of repeated reminders. No copies of the contract stated to have been submitted to the Original Authority and First Appellate Authority (if any), is seen filed along with the Appeal Memorandum. It is not required to examine the matter independently and disturb the findings of the Lower Authorities. The ends of justice would be met by remanding the matter to the Original Authority and facilitating the appellant from furnishing the requisite contract copies so that the issue of classification can be examined in its proper perspective and a decision arrived at.
Rejection of a part of the claim as being barred by limitation - HELD THAT:- The appellant has stated that the excess amounts were paid by mistake and could not be termed as duty/ service tax and hence, the same would be outside the purview of Section 11B of the Act. It is the appellants opinion that the department has no authority to retain such amount and therefore they are entitled for the refund of the said amount. Revenue has contested this plea citing the judgment in Mafatlal Industries Ltd. [1996 (12) TMI 50 - SUPREME COURT] - Hence as per the law declared by the Hon’ble Supreme Court the right which accrues in favour of the appellant to claim the refund is under section 11B of the Central Excise Act 1944 and therefore, the limitation prescribed under the section would apply.
Burden pf prove - principles of unjust enrichment - HELD THAT:- As per the judgement even in the case of an illegal levy or a levy which is unconstitutional, the right of refund is not automatic. The burden of proof lies on the claimant to establish that it would not cause unjust enrichment.
Conclusion - The impugned order is set aside and the matter remanded for fresh adjudication, emphasizing the principles of natural justice and the need for a thorough review of the evidence.
Appeal allowed by way of remand.
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2025 (2) TMI 419
Non-reversal of CENVAT Credit attributable to exempted services - classification and taxability of services under 'Business Support Service' and 'Business Auxiliary Service' - demand under 'Health Care Service' as a 'Pure Agent' - applicability of Service Tax on 'Renting of Immovable Property' and under 'Health Care Service' for amounts received from corporates - demand under 'Import of Service' without specific classification in the Show Cause Notice (SCN) - Invocation of extended period under Section 73(1) of the Act.
Demand of Rs.1,00,76,186 on account of Cenvat Taken - Non-reversal of CENVAT Credit attributable to exempted services - HELD THAT:- The facts of the case show that the Modvat credit taken on the inputs was reversed by the petitioner. Since the reversal of Modvat credit has been done by the petitioner hence in our opinion it has to be treated that no credit was taken by the petitioner on the inputs, namely PVC granules used in the manufacture of PVC/PP bottles as contemplated under the Notification No. 15/94-C.E., dated 1-3-1994.
There is no dispute that the appellant has reversed the entire credit of Rs.25,02,361/-‐ taken on exempted output services along with interest of Rs.6,71,531 in September 2013, after the Show Cause Notice was issued. These details have been certified by the Chartered Accountant and they are not being disputed by the Revenue - the confirmed demand of Rs. Rs.1,00,76,186/-, is legally not sustainable.
Demand of Rs.42,94,470/- under ‘business support service’ - Classification and taxability of services under 'Business Support Service' and 'Business Auxiliary Service' - HELD THAT:- It is not found that the appellant, apart from making available the above ‘space’ has provided any other infrastructure facilities to the client. In fact, it is clear from the Agreement that all such infrastructure facilities will have to be created by the client with their own cost.
It is more akin to letting out the space on rent to the client for which the consideration is arrived @ 18% of the sale proceeds of the medicines. Therefore, on factual matrix there are no justification to classify the service as “Business Support Service”, the classification under which the present demand has been made and confirmed - the demand of Rs.42,94,470/- made under ‘business support service’ set aside.
Demand of Rs.8,87,242/- under ‘business auxiliary service’ - HELD THAT:- The collection of blood samples prima facie does not fall under any of the above seven categories. Further, in the show cause notice, the department has nowhere specified under which clause of the definition of “Business Auxiliary Service” the liability shall be fastened on the Appellant. It is well settled that to bring any activity under the definition of “Business Auxiliary Service” for levy of tax, it is to be clearly mentioned in the show cause notice under which clause of the definition shall apply to fasten that service under the classification of “Business Auxiliary Service” - demand set aside.
Demand of Rs.19,69,383/- under ‘health care service’ as pure agent - HELD THAT:- On going through the copy of the ST 3 enclosed, it is found that indeed it is an inadvertent error on their part because of which they have shown an amount of Rs.1,91,20,228/- under Sl.3F(l)(iii) instead of at S.No. 3F(l)(ii), wherein it should have been shown, since this amount was received on account of diagnostic and treatment provided to admitted inpatients which is an exempted service - the demand of Rs.19,69,383 set aside.
Demand of Rs.1,95,934/- under ‘renting of immovable property service’ - HELD THAT:- On going through the challans and calculation sheet provided by the appellant at page Nos.367 to 389 and find the appellant’s claims to be correct. Since, the Revenue has not adduced any evidence to the effect that the appellants have charged and recovered the Service Tax from their tenants, it is held that they are entitled for cum-tax benefit in terms of Section 67(2) of the Finance Act 1994 - the demand is required to be re-quantified as Rs.1,67,181 and not at Rs.1,95,934/- as calculated by the Revenue.
Demand of Rs.4,73,252/- under ‘health care service’ in respect of sundry debtors - HELD THAT:- The appellant shows by way of documentary evidence, along with the Chartered Accountant’s Certification, that as and when the amounts were realized from the debtors, the same have been properly accounted for and Service Tax has been paid. The Appellant submits that during the material period, service tax was payable on collection basis and not on the invoice basis - the confirmed demand of Rs.4,73,252/- on the unrealised sundry debtors set aside.
Demand of Rs.3,28,957/- under ‘health care service’ in respect of amount received from corporates for treatment of their employees - HELD THAT:- If the payment is made towards health checkup and preventive care, then such service would become taxable under the category “health service’. In the present case, it is found that the amount being paid by the corporates is not account of such services, but is on account of in-patient hospitalization charges, which is being paid by the corporates to the appellant - demand set aside.
Demand of Rs.1,03,133/- under Section 66A of the Act - HELD THAT:- The SCN proposed to levy service tax under Section 66A without mentioning any specific classification whatsoever. However, on production of the documentary evidences along with the reply to the SCN, the Adjudcating authority dropped a portion of the demand and confirmed the demand on Rs.7,27,129/- and Rs.1,38,583/- as expenditure incurred in foreign currency for the years 2008-09 and 2010-11. On such payments, he has confirmed the demand of Rs.1,03,133/- under three taxable classifications namely ‘Business Support Service’, Commercial Coaching Centre and Tutorial Service’ and ‘Scientific or Technical Consultancy Service’ knowing fully that the demand proposed in the impugned show cause notice without mentioning any taxable service under which the demand was proposed - Since the appellant was not put to notice about the sub-classification of the import of service in the Show Cause Notice, the confirmed demand of Rs.1,03,133/- set aside.
Time limitation - HELD THAT:- In this case, the appellant has reversed the cenvat taken along with interest and the decision are in their favour. Further all the cenvat credit taken whether for the exempted services or for the taxable services, have been recorded by them in their books of account. All these make it clear that the Dept has not brought in any evidence to the effect that the appellant was indulging in suppression with an intent to evade Service Tax payment. Similarly in case of import of service, even if the same payable, which is not in the present case, the same would be available as Cenvat Credit to the appellant. Hence, there would not be any motive to suppress. The entry of Rs.19 lacs is on account of their clerical mistake while filing the ST3 Returns. In respect of Renting of immovable property services, due to the confusion prevailing at that time, they have neither collected the Service Tax nor paid the same. Subsequently on getting clarification, they have paid the Service Tax along with interest. Thus if all the facts are considered together, we find that the Revenue has not made out any case of suppression, and the non-payment / short payment, if any has been purely on account of interpretational difficulties. The appellant has also shown their bonafides by making the payment of Service Tax, wherever payable, along with interest. Therefore, the confirmed demand for the extended period is legally not sustainable.
Conclusion - All the demands are set aside. The Appeal succeeds on merits and on account of time-bar.
Appeal allowed.
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