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Service Tax - Case Laws
Showing 241 to 260 of 30966 Records
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2025 (2) TMI 418
Valuation of service tax - inclusion of reimbursable expenses in the taxable value of services under Section 67 of the Finance Act, 1994, and Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 - Pure Agent under Rule 5(2) of the Valuation Rules - extended period of limitation - HELD THAT:- The issue is no more res-integra in view of the decision of the Honourable Supreme Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. 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 AND TECHNOCRATS PVT. LTD. VERSUS UOI. & ANR. [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 impugned order in appeal and order in original are set aside - Appeal allowed.
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2025 (2) TMI 417
Valuation of service tax - inclusion of expenses incurred by the appellant, a Customs House Agent (CHA), and reimbursed by client in the assessable value - "Pure Agent" under Rule 5(2) of the Valuation Rules - extended period of limitation - 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 AND TECHNOCRATS PVT. LTD. VERSUS UOI. & ANR. [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.
Conclusion - The reimbursed expenses are not part of the taxable value for service tax purposes, aligning with the Supreme Court's interpretation of Section 67.
The impugned order in appeal upholding the impugned order in original cannot sustain - Appeal allowed.
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2025 (2) TMI 377
Entitlement to abatement granted by the learned Commissioner - assessee has not satisfied the necessary conditions of the N/N. 1/2006-ST dated 01.03.2006 - HELD THAT:- The learned Commissioner vide impugned order finds that the demands in both SCNs were raised without considering the applicable abatement under N/N. 1/2006-ST dated 01.03.2006 which was admissible to the noticee and that the noticee was eligible for the said abatement.
The learned Commissioner has not only held that the assessee is eligible for abatement but has also quantified the abatement available to the assessee. Having acknowledged the presence of material and labour components in the services provided by the assessee to the oil companies, it was not open to the learned Commissioner to disregard the classification claimed by the assessee under ‘Works Contract Service’.
Conclusion - The impugned order is not sustainable as for as the categorization of works under various other heads than ‘Works Contract Service’ is concerned; therefore, the same is liable to be set aside.
Appeal allowed.
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2025 (2) TMI 376
Refund claim - requirement to reverse the Cenvat credit to claim refund, in terms of N/N. 27/2012-CE(NT) dated 18.06.2012 - non-fulfilment of condition of para 2(h) of the N/N. 27/2012-CE(NT) dated 18.06.2012 - HELD THAT:- Admittedly, in this case the appellant has debited Cenvat credit in their books of accounts which shows reversal of Cenvat credit. Although they have transferred Cenvat credit to Tran-1 for the period January 2017 to June 2017 but same was also reversed in June 2018. Therefore, it will be treated as that they have reversed the Cenvat credit. If there any delay on the part of the appellant that is only a technical lapse and the substantial benefit of the notification should not be denied for such technical lapse.
The refund claim filed by appellant cannot be rejected on these technical grounds as held by the Tribunal in the case of LIGHTSPEED INDIA PARTNERS ADVISORS LLP VERSUS COMMISSIONER CENTRAL TAX (APPEALS) NEW DELHI ADVISORS LLP [2021 (12) TMI 621 - CESTAT NEW DELHI] wherein this Tribunal observed that 'the Commissioner (Appeals) has miserably failed to observe that with the introduction of the GST Act filing of ST-3 return was absolutely done away due to which there was no other possible way with the appellant to debit and to reflect the existing credit in its ST-3 return. The Notification No. 27/2012 dated 18.6.2012 with its condition No 2(h), to my opinion, was applicable only during the period prior to GST regime. Since the GST regime has done away with the ST 3 return, there remain no provision in GST system to reflect the refund claim in the CENVAT credit balance. The only option was to show its reversal in the Books of accounts. Such reversal still amounts to non availment of Credit and refund whereof remains eligible.'
Conclusion - The appellant is rightly claimed the refund in terms of Notification No. 27/2012-CE(NT) dated 18.06.2012 and entitled for the refund as the appellant has satisfied the conditions of the Notification No. 27/2012-CE(NT) dated 18.06.2012.
The impugned order set aside - appeal allowed.
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2025 (2) TMI 375
Admissibility of Cenvat credit in respect of the ‘Tower’, ‘Shelter’, ‘Electric Setup’, other electronic items and prefabricated shelters for provision of output/telecommunication services - Admissibility of Cenvat credit of input service used for erection of such tower - Issuance of SCN.
Admissibility of Cenvat credit in respect of the ‘Tower’, ‘Shelter’, ‘Electric Setup’, other electronic items and prefabricated shelters for provision of output/telecommunication services - HELD THAT:- The dispute between both the decisions has been finally settled by the Hon’ble Supreme Court in the case of Bharti Airtel [2024 (11) TMI 1042 - SUPREME COURT] that credit is admissible and the decision of Hon’ble Bombay High Court has been set aside. Hon’ble Supreme Court held 'We, therefore, agree with the conclusion arrived at by the Delhi High Court that towers and shelters (PFBs) support the BTS/antenna for effective transmission of mobile signals and thus enhance their efficiency and since these articles are components/accessories of BTS/antenna which are admittedly “capital goods” falling under Chapter 85 within sub-clause (i) of Rule 2(a)(A) of CENVAT Rules, these items consequently are covered by the definition of “capital goods” within the meaning of sub-clause (iii) read with sub-clause (i) of Rule 2(a)(A) of CENVAT Rules.' - there are no reason for the denial of the said credit.
Admissibility of Cenvat credit of input service used for erection of such tower - HELD THAT:- As the Hon’ble Supreme Court has considered these goods as capital goods/inputs in the provision of output service the credit in respect of erection of these goods could not have been denied. As the services have been used for provision of output services either directly or indirectly the CENVAT credit could not have been denied - these services are squarely covered by Rule 2 (l) of the CENVAT Credit Rules, 2004 and hence the credit of service tax paid in respect of these services would be admissible to the appellant.
Issuance of SCN - HELD THAT:- There are no merits in the said appeal for the reason that the Show Cause Notice would not have been issued in respects of the amount already paid by the party prior to the issuance of Show Cause Notice in terms of Section 73(3) of the Finance Act, 1994. There are no merits in the appeal filed by the Revenue.
Appeal allowed.
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2025 (2) TMI 316
Violation of the principles of natural justice - inordinate and unexplained delay of more than 14 to 20 years in adjudicating the SCN - HELD THAT:- When the department decided to transfer these Show Cause Notices to the call book, the same was not even intimated to the Petitioner and that they were kept pending because the issue involved in the Show Cause Notices was pending for a decision before this Court. In these facts and circumstances, it is found that the explanation given for this inordinate delay does not hold any merit.
What is also interesting to note is that the decision in the case of Homa Engineering Works [2007 (5) TMI 52 - CESTAT,MUMBAI] was rendered by the CESTAT sometime in the year 2007 and the decision in the case of M/s Mazgaon Dock Ltd [2008 (4) TMI 121 - CESTAT MUMBAI] was rendered on 26th April 2008. Despite this, atleast as far as the first two Show Cause Notices were concerned, there was no impediment in adjudicating the same on the so called ground that the issue in the said Show Cause Notices was already decided against the department and from which an Appeal was pending before this Court. The facts of this case clearly show that the department has done nothing to adjudicate the six show causes notices issued to the Petitioner ranging from 14 to 20 years after the issuance of the said Show Cause Notices.
The Show Cause Notices deserve to be quashed and set aside solely on the ground that there has been an inordinate delay [without any proper explanation] in adjudicating the said Show Cause Notices.
There are several judgments passed by this Court that have quashed Show Cause Notices when there has been an inordinate delay (without justification) in adjudicating the same and taken to its logical conclusion. As mentioned earlier, in the facts of the present case, the Show Cause Notices were issued as far back as ranging from 14 to 20 years and thereafter nothing was done other than transferring them to the call book and that too without intimating the Petitioner. In these circumstances, the SCN allowed to stand.
Conclusion - The Show Cause Notices issued between 2004 and 2011 were to be quashed due to the unjustifiable delay in adjudication and the failure to inform the Petitioner about the transfer to the call book.
SCN quashed - petition allowed.
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2025 (2) TMI 315
Levy of service tax - Steamer Agency Service - income earned from freight forwarding activity pertaining to the ocean freight related to the ocean cargo - margin earned on sale of space on the shipping lines to the exporters/importers - HELD THAT:- The issue decided in M/S. FREIGHTLINKS INTERNATIONAL (INDIA) PVT. LTD. [2024 (10) TMI 1629 - CESTAT BANGALORE] where it was held that 'In the appellant‘s case, if the space on the ships which it bought cannot be sold to its customers fully, or due to market conditions, or is compelled to sell at lower than purchase price, the appellant incurs loss. In a contrary situation, it gains profits. This activity is a business in itself on account of the appellant and cannot be called a service at all. Neither can the profit earned from such business be termed consideration for service.'
Conclusion - The appellant is not liable to pay service tax on the income from the freight forwarding activities in question.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 266
Levy of service tax - business support service - reimbursements received by the appellants from their group companies for expenses incurred on their behalf - reimbursements can be considered as 'consideration' for the purpose of levying service tax as per the Explanation to Section 67 of the Finance Act, 1994 or not - it was held by CESTAT that the reimbursement of expenses incurred by one entity on behalf of another, without the provision of a service, does not constitute a taxable service. Such reimbursements do not qualify as 'consideration' for service tax purposes.
HELD THAT:- There are no good ground and reason to interfere with the impugned judgment; hence, the present appeal is dismissed.
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2025 (2) TMI 265
Rejection of refund claim - Revenue submits that since the petitioner has been diligently pursuing the matter before this Court, he is certainly entitled to the benefit under Section 14 of the Limitation Act. Further, he fairly submits that if any such appeal is filed within four weeks from today, the same shall be entertained - HELD THAT:- In the wake of the position sketched, as also the statements made by learned counsel for the parties, the petition stands disposed of.
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2025 (2) TMI 264
Levy of service tax - reverse charge mechanism - whether the Withholding Tax paid by the appellants in respect of the consideration received from their overseas partners i.e VISA and MasterCard, in the assessable value of the service tax payable by the appellant under Reverse Charge Mechanism? - invocation of extended period of limitation - HELD THAT:- In the facts and circumstances of the case, the contracts entered into by the appellants are distinct in relation to the reimbursement of WHT; while the Agreement with MasterCard indicated that such WHT is not reimbursable, the Agreement with VISA indicated that VISA would reimburse the WHT periodically on providing the necessary proof of payment of WHT by the appellants. In this background, it is seen that the appellants have been paying service tax on the grossed-up value in respect of the consideration received from the MasterCard and have not been paying service tax in respect of VISA.
Hon’ble Supreme Court in the case of Bhayana Builders [2018 (2) TMI 1325 - SUPREME COURT] held that 'Explanation 3 to sub-section (1) of Section 67 removes any doubt by clarifying that the gross amount charged for the taxable service shall include the amount received towards the taxable service before, during or after provision of such service, implying thereby that where no amount is charged that has not to be included in respect of such materials/goods which are supplied by the service recipient, naturally, no amount is received by the service provider/assessee. Though, sub-section (4) of Section 67 states that the value shall be determined in such manner as may be prescribed, however, it is subject to the provisions of sub-sections (1), (2) and (3). Moreover, no such manner is prescribed which includes the value of free goods/material supplied by the service recipient for determination of the gross value.'
Section 67A of the Finance Act, 1994, gives an understanding that the consideration received must be for the service provided. In case, a part of the consideration is identifiable not to be for provision of such service, the same cannot be considered as consideration for the purposes of payment of service tax. In the impugned case, it is found that there is a clear-cut demarcation between the two Agreements. While the Agreement with MasterCard does not recognize the payment of WHT by the appellants as reimbursable expenses, the Agreement with VISA considers it to be reimbursable subject to provision of proof. In case of the MasterCard Agreement, the entire consideration received by the appellants is to be treated as gross consideration as that is the amount paid by the appellant to the overseas MasterCard for the services received. Therefore, rightly the appellant treated the grossed-up value as the consideration and discharged the due service tax.
It is clear that the consideration as received for the service, that is to say the consideration mentioned in invoice to be to such service, is the assessable value for the purposes of levy of service tax, provided no other amounts have been paid over and above the value shown in the invoice. As far as the amounts that flow to the service provider (to the service receiver in case of reverse charge), the same constitutes gross consideration in terms of Section 67D - the grossed-up value is correctly considered by the appellants as consideration and applicable service tax was discharged on the same. In case of amounts paid to VISA card, the amount of WHT is agreed to be reimbursed to the appellant and therefore, that amount does not form part of consideration as it flows back to the appellant, the service recipient. Therefore, the appellants were right in not discharging the service tax on the same.
Extended period of limitation - HELD THAT:- As the issue came to be settled by a series of judgements by the Tribunal at a later date, there are reasons to believe that the appellants could have entertained a bona fide belief. Moreover, Revenue does not highlight with evidence any act of suppression etc. on the part of the appellants with an intent to evade payment of duty. Moreover, the appellants have been filing ST-3 Returns regularly. The Revenue has not made out any case for invocation of extended period.
Conclusion - The appellants correctly excluded the reimbursed WHT from the assessable value for VISA and that the demand for the extended period was unsustainable.
Appeal allowed.
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2025 (2) TMI 263
Rejection of rebate claim - export of services - whether the Tribunal has the authority to entertain appeals relating to rebate claims or if such matters should be directed to the Revisionary Authority under Section 35EE of the Central Excise Act, 1944? - HELD THAT:- In view of the first proviso to Section 35B of the Central Excise Act, 1944 where an order passed by the Commissioner (Appeals) under Section 35A, the Tribunal shall not have jurisdiction to decide any appeal relating to rebate of duty of excise on goods exported against the Order-in-Appeal passed by the Commissioner (Appeals) under Section 35B(1)(b). In respect of rebate claims filed, appeals have to be filed before the Revisionary Authority, Government of India under Section 35EE of the Central Excise Act, 1944. In terms of provisions of Section 86 of the Finance Act, 1994 where an order relating to service which is exported which has been passed under Section 85 and the matter relates to grant of rebate of service tax on input services or rebate of duty paid on inputs, appeals are required to be filed before the Revisionary Authority, Government of India in accordance with the provisions of Section 35EE of the Central Excise Act, 1994.
The proviso of Section 35B of the Central Excise Act, 1944 clearly speaks of exclusion of jurisdiction of this Tribunal in relation to matters relating to rebate of duty. As all the impugned orders passed by the Commissioner (Appeals) relates to rebate claims, the Tribunal lacks jurisdiction in these matters. These appeals are not maintainable before this Tribunal as the remedy lies under Section 35EE of the Central Excise Act, 1944 by way of filing revision applications to Central Government.
Conclusion - In view of the first proviso to Section 35B of the Central Excise Act, 1944 where an order passed by the Commissioner (Appeals) under Section 35A, the Tribunal shall not have jurisdiction to decide any appeal relating to rebate of duty of excise on goods exported against the Order-in-Appeal passed by the Commissioner (Appeals) under Section 35B(1)(b).
These appeals are dismissed for want of jurisdiction.
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2025 (2) TMI 262
Exemption from Service Tax under N/N. 45/2010-S.T. dated 20.07.2010 - services rendered by the Appellant in connection with the transmission and distribution of electricity - Appellant, acting as a sub-contractor, is liable to pay Service Tax even if the main contractor has already paid the Service Tax on the entire amount - Extended period of limitation.
Transmission / distribution of electricity - HELD THAT:- N/N. 45/2010-S.T. exempts all services rendered in relation to transmission / distribution of electricity from payment of service tax. However, it is observed that the Ld. adjudicating authority has not considered the services rendered by the appellant such as 'Commercial or Industrial Construction Service' as related to transmission and distribution of electricity on the ground that they are mainly related to works such as painting/plumbing/sanitary works at electric sub-stations and thus the same could not be considered as services related to transmission and distribution of electricity - the appellant could not produce the work orders at the time of hearing before this Tribunal as they were voluminous in nature, but expressed their willingness to produce the same before the adjudicating authority for re-examining the eligibility of the said notification along with the respective work orders. Thus, it is opined that this issue needs to be re-examined by the adjudicating authority afresh, after verification of the work orders related to transmission and distribution of electricity.
Commercial or Industrial Construction Service - supply of tangible goods service - service rendered as a sub-contractor - HELD THAT:- Even if the main contractor pays Service Tax on the full amount, the sub-contractor shall be liable to pay Service Tax for the services rendered by them to the main contractor. The appellant has not produced the work orders wherein they have rendered the service as a sub-contractor. If the services are rendered after issue of the clarification by the Board, then the appellant is liable to pay service tax as a sub-contractor, even if the main contractor pays the service tax. However, at the time of hearing before this Tribunal, the appellant could not produce the work orders wherein they have rendered the services as a sub-contractor - this issue needs to be re-examined by the adjudicating authority afresh on the basis of our observations supra, after verification of the work orders where the appellant rendered the services as a sub-contractor. The adjudicating authority needs to examine the issue on the basis of the documentary evidences produced by the appellant in this regard.
The same view has been held by the Larger Bench of the Tribunal in the case of Commissioner of Service Tax, New Delhi v. M/s. Melange Developers Pvt. Ltd. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB], wherein it has been held that a sub-contractor is liable to pay Service Tax even if the main contractor pays service tax on the entire value.
Applicability of extended period of limitation - HELD THAT:- The issue regarding applicability of extended period of limitation has to be examined with respect to the facts and circumstances of each case separately. In this case, the adjudicating authority is required to examine whether the appellant has actually rendered the services in the capacity of a sub-contractor or not and the period involved to take a decision as to whether extended period of limitation can be invoked or not. For the above purposes of verification, the issue needs to be remanded back to the adjudicating authority.
In respect of the demands confirmed under the categories such as ‘site formation, clearance, excavation and earth moving and demolition service’, ’Goods Transport Agency Service’, ‘Rent-a-cab service’, ‘construction of residential complex service’, etc., it is observed that the appellant has not offered any specific explanation regarding the nature of service rendered by them and their service tax liability on such services. Considering the fact that the work orders relating to these services are overlapping with other services in the work orders, it is opined that this issue needs to be re-examined by the adjudicating authority afresh, after verification of the work orders.
Conclusion - i) The eligibility for exemption needs to be re-examined by the adjudicating authority after verifying the work orders. ii) The sub-contractors are liable for Service Tax, even if the main contractor has paid the tax, and remanded the issue for verification of work orders. iii) The applicability of the extended period should be examined based on the case's specifics.
Appeal disposed off by way of remand.
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2025 (2) TMI 261
Levy of penalty when the entire amount of service tax has been paid much before issuance of SCN - appellant willing to pay the applicable interest - HELD THAT:- The appellant is willing to pay interest on the service tax paid before issuance of the show-cause notice. It is the contention of the learned advocate for the appellant that even though during the relevant period they had not paid service tax on turnkey contracts, since both service as well as materials had been supplied under the said contract treating the same as works contract. However, since those contracts are not available with them being more than two decades old, it would be difficult on their part to substantiate their claim. Therefore, on instruction from the appellant, the learned advocate submits that they are willing to discharge interest applicable on the service amount of Rs.29,47,547/- already paid and prays for invoking Section 80 of the Finance Act, 1994.
The entire amount of service tax confirmed has been paid by the appellant much before the issuance of show-cause notice. It is their contention that wherever services are rendered during the period 01.07.2003 to 27.03.2007 involving only Erection, Installation and Commissioning, appropriate Service Tax was paid and they had not discharged Service Tax on works contract. Fairly they submitted that these contracts could not be placed being not traceable. Hence, it is only in the nature of works contract cannot be ascertained, since all these contracts could not be placed on record due to lapse of time. In their reply to show-cause notice and in their Appeal Memorandum, they have been claiming consistently that the service rendered by them, wherever VAT is paid and service tax not paid when it is in the nature of works contract service. The applicable Service Tax has been already paid and the appellant agree to discharge the interest on the said amount.
There are no reason not to invoke Section 80 of the Finance Act, 1994 as far as imposition of penalty is concerned.
Conclusion - i) The applicable Service Tax has been already paid and the appellant agree to discharge the interest on the said amount. ii) There are no reason not to invoke Section 80 of the Finance Act, 1994 as far as imposition of penalty is concerned.
Appeal disposed off.
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2025 (2) TMI 260
Denial of CENVAT Credit availed by the Appellant on the basis of Advice of Transfer Debit (ATD) - Liability to pay interest on the excess CENVAT Credit availed on capital goods in the first year itself - levy of penalty - Rent a cab service.
Denial of CENVAT Credit availed on the basis of Advice of Transfer Debit (ATD) - HELD THAT:- Appellant is a Government of India Undertaking providing the same services from different locations across the country. The same issue for denial of the credit availed by the appellant on the basis of Advice of Transfer Debit (ADT) was raised in the jurisdiction of the Salem Commissionerate. Matter was finally decided by the Chennai Bench BHARAT SANCHAR NIGAM LTD. ERODE VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM [2013 (12) TMI 742 - CESTAT CHENNAI] holding that 'It is true that assessee has not complied with provisions of CCR, 2004 read with Central Excise Rules, 2002 strictly. However, I find that existence of original invoice and its genuineness is not disputed by Revenue. In fact, such documents were produced before lower authorities. Therefore, the duty involved has been paid and there is no dispute that the equipment in question has been used at the sites where credits were taken. In such circumstances, considering the commercial practice which was necessary for efficient procuring the equipment in question, this procedural lapse cannot be considered as a reason to deny Cenvat credit involved.'
Matter remanded back on this issue to the original authority to re-determine the admissibility of CENVAT Credit on the strength of ATD in terms of this decision of Hon’ble High Court.
Interest and penalty - HELD THAT:- As the demand of the interest is completely linked with the admissibility of CENVAT Credit on the basis of the ATD, for which the matter is being remanded back to the original this issue should be decided by the adjudicating authority on the basis of the findings arrived at by in respect of admissibility of CENVAT Credit - Further adjudicating authority should re-determine the issue of penalty on these credits after determining the admissibility of CENVAT Credit in remand proceedings as has been directed by the Hon’ble High Court.
CENVAT Credit on rent-a-cab service - HELD THAT:- The issue of admissibility of CENVAT credit in respect of the “Rent a cab” service has also been decided by the Hon’ble Bombay High Court in case of Solar Industries India Ltd [2021 (12) TMI 1047 - BOMBAY HIGH COURT] holding as 'the Tribunal did not commit any error whatsoever in disallowing Cenvat credit to the appellant after 1-4-2011 in view of the amended provisions. The service provided was mere in the nature of personal service to its employees which is not permitted to be treated as “input service”.'
Thus in view of the above decision of Hon’ble Bombay High Court, affirmed by Hon’ble Supreme Court, the findings recorded in the impugned order upholding the denial of this credit affirmed.
Conclusion - i) The matter regarding the denial of CENVAT Credit on ATDs is remanded back to the original authority for reconsideration. ii) The disallowance of CENVAT Credit on rent-a-cab services, along with interest and penalties upheld.
Appeal partly allowed and matter is remanded back to the original authority.
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2025 (2) TMI 215
Valid service of SCN and the Order-in-Original issued u/s 73 of the Finance Act, 1994 - jurisdiction to issue the Order-in-Original based on the information available in Form 26AS under the Income Tax Act, 1961 - liability to pay service tax on export services under the provisions of the Finance Act, 1994 - HELD THAT:- The decision or order passed or any summons or notice issued under the Act is to be served by various modes as prescribed in clause (a) by tendering or by registered post or by speed post with proof of delivery or by courier, failing which, by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case maybe, is intended and on failure of the modes prescribed in clauses (a) and (b), by affixing a copy thereof on the notice board of the Officer who passed such decision or order or issued summons or notice.
Admittedly the show-cause notice was never served upon the petitioner. Similarly, the letter dated 07.04.2022 fixing the personal hearing as well as the Order-in-Original were also sent by speed post as contended in the reply dated 30th May, 2023 given under the RTI Act, however, the same also met with the same fate of not delivering upon the petitioner. Therefore, the respondent-Authority was required to take recourse to clauses (b) and (c) of Sub-section (1) of Section 37C of the Act, 1944, however, it is admitted in the affidavit-in-reply that as the petitioner had changed the place of the business, it was not possible to follow the provisions of Section 37C (b) of the Act, 1944 as at the time of delivery, the address of the premises was not in existence but the provisions of Section 37C (c) was followed by affixing copy thereof on the notice board, no document or details are available even for compliance of clause (c) of Section 37C (1) of the Act, 1944.
It is clear that neither the show-cause notice nor the Order-in-Original was ever been served upon the petitioner at any point to time and when there is non service of the show-cause notice and the Order-in-Original, both are liable to be quashed and set aside.
Conclusion - i) The show-cause notice and the Order-in-Original were invalid due to improper service, as per Section 37C of the Central Excise Act, 1944. ii) The petitioner was not liable to pay service tax on export services under Section 66B of the Finance Act, 1994. iii) The respondent authority lacked jurisdiction to issue the Order-in-Original based on improperly served notices and incorrect application of tax liability principles.
The matter is required to be considered in favour of the petitioner as petitioner was never liable to pay the service tax on the export services under the provisions of the Act, 1994 and hence, no further orders are required to be passed - petition allowed by way of remand.
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2025 (2) TMI 214
CENVAT Credit - inputs/input services used in relation to output service - angles, channels, beams, etc., which are used for erecting transmission towers - HELD THAT:- While considering the issue as to whether the appellants were eligible for the cenvat credit availed on angles, channels, beams, etc., which are used in providing output, the Hon’ble Supreme Court in the case of Bharti Airtel Ltd. [2024 (11) TMI 1042 - SUPREME COURT] observed that 'the tower and pre-fabricated buildings (PFBs) are “goods” and not immovable property and since these goods are used for providing mobile telecommunication services, the inescapable conclusion is that they would also qualify as “inputs” under Rule 2(k) for the purpose of credit benefits under the CENVAT Rules.'
Conclusion - The structures essential for service provision, even if not directly involved in the service, qualify as inputs. CENVAT Credit allowed.
Appeal allowed.
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2025 (2) TMI 213
Abatement of appeal - continuation of appeal proceedings, following the death of the appellant, who was a sole proprietor - Rule 22 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 - HELD THAT:- The Appellant who was a sole proprietor has died on 16.08.2021 during the pendency of the present appeals. It is also found that in terms of Rule 22 of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, on the death of the appellant, the proceedings will be abated unless an application is made for continuance of such proceedings by the legal Heirs of the Appellant. In this case, no such application has been received. As the Death has occurred on 16.08.2021, nearly four years passed already.
In view of the judgement of the Hon’ble Supreme Court in the case of SHABINA ABRAHAM AND OTHERS VERSUS COLLECTOR OF CENTRAL EXCISE & CUSTOMS [2015 (7) TMI 1036 - SUPREME COURT], wherein it has been held that no proceedings can be initiated or continued against a dead person as it amounts to violation of natural justice in as much as the dead person, who is proceeded against is not alive to defend himself.
Conclusion - On the death of the appellant, the appeals stand abated and disposed of in terms of Rule 22 of the CESTAT procedure Rules, 1982.
Appeal disposed off.
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2025 (2) TMI 212
Classification of services - supply of tangible goods services or cargo handing services? - first agreement of performing the work of terminal handling of containers at Inland Container Depot, Tughlakabad, New Delhi - second agreement of cargo handling operation in relation to export and import cargo - extended period of limitation.
First Agreement - Terminal Handling - whether the appellant had provided “supply of tangible goods” services or “cargo handing” services to CONCOR? - HELD THAT:- The agreement, it is seen, is for performing the work of handling of containers at ICD, Tughlakabad at the rates and conditions specified in the Schedule annexed to the agreement. The rate Schedule clearly shows that an amount of Rs. 8 lakhs is to be paid to the appellant towards hiring of each of the two loaded reach stackers for round the clock operation, and Rs. 4.50 lakhs for hiring of one empty reach stacker for round the clock operation. It is, therefore, clear that CONCOR hired two loaded reach stackers and one empty reach stacker, for which the appellant was to receive consideration in terms of money. The rate schedule does not refer to handling of cargo at all and indeed could not have, as the agreement is for providing reach stackers to CONCOR - The terms of the agreement clearly show that the appellant rendered “supply of tangible goods” service to CONCOR.
Second Agreement - Cargo Handling - whether the appellant was justified in not paying service tax for handling operations in respect of export cargo? - HELD THAT:- The amount received by the appellant for handling of import cargo as also export cargo. This apart, as can be seen from the second agreement also the charges to be paid to the appellant for handling of import cargo and export cargo are different - The Court remanded the issue of service tax liability for export cargo handling under the second agreement to the adjudicating authority for fresh consideration, allowing the appellant to submit additional evidence.
Extended period of limitation - HELD THAT:- It is, therefore, a fit case where the matter needs to be remanded to the adjudicating authority to examine the levy of service tax on handling of export cargo afresh after providing an opportunity to the appellant to substantiate what was contended by the appellant in reply to the show cause notice, namely that it had handled export cargo also. The appellant may provides such evidence to the adjudicating authority within a period of six weeks from today. The adjudicating authority shall examine the evidence, if submitted. The appellant may also substantiate its submission that the extended period of limitation could not have been invoked in so far as this service is concerned.
Conclusion - i) The appellant provided "supply of tangible goods" services under the first agreement, not "cargo handling" services. ii) The Court remanded the issue of service tax liability for export cargo handling under the second agreement to the adjudicating authority for fresh consideration, allowing the appellant to submit additional evidence. iii) It is, therefore, a fit case where the matter needs to be remanded to the adjudicating authority to examine the levy of service tax on handling of export cargo afresh after providing an opportunity to the appellant to substantiate what was contended by the appellant in reply to the show cause notice, namely that it had handled export cargo also.
Appeal allowed in part by way of remand.
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2025 (2) TMI 211
Taxability of the value of “premium” or “salami” for the period prior to 01.07.2012 and w.e.f. 01.07.2012 under ‘renting of immovable property’ - Whether ‘premium’ or ‘salami’ can be subjected to levy of service tax under ‘renting of immovable property’ defined under section 65(90a) of the Finance Act? - HELD THAT:- “Premium” is a payment for being allowed to take possession of the immovable property. It is a price paid for a transfer of a right to enjoy the property. The lessor, who owns and possesses the property transfers the possession to another for a price. There can, therefore, be no doubts that ‘premium’ is the amount received for “renting” of immovable property.
Section 65B (44) of the Finance Act defines “service” to mean any activity carried out by a person for another for consideration, and includes a “declared service”. It is seen that consideration is received in the form of premium which would be included in the definition of “renting”. “Renting of immovable property” is a “declared service” under section 66E of the Finance Act. Once “renting of immovable property” is a declared service and so taxable under section 66B of the Finance Act, it cannot be contended by the appellant that it will also be included in those services which are excluded under section 65B (44) of the Finance Act, for it can never be the intention of the legislature to include a “service” as exigible to service tax and at the same time also exclude that “service” from taxability. The contention of the appellant that it is excluded from taxability under sub-clause (a)(i) of section 65B(44) of the Finance Act cannot also be accepted for this reason.
Conclusion - The value of “premium” or “salami” is exigible to service tax under “renting of immovable property” for the period prior to 01.07.2012 under section 65(105)(zzzz) of the Finance Act and from 01.07.2012 under section 66B of the Finance Act.
The two appeals may now be placed before the respective Division Benches of the Tribunal for deciding them on merits.
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2025 (2) TMI 182
Recovery of service tax with interest and penalty - amounts recorded as license fees, documentation fees, and computer software expenses in the appellant's books of account - applicability of service tax on transactions involving the transfer of technology and related documentation from foreign vendors to the appellant - Extended period of limitation - HELD THAT:- The issue is no more res integra and this Bench of the Tribunal in Appellant’s own case being Service Tax Appeal No.70058 of 2019 having Final Order No.70784 of 2024 dated 02.12.2024 [2024 (12) TMI 281 - CESTAT ALLAHABAD] has decided the dispute in favour of the Appellant-Assessee.
Extended period of limitation - HELD THAT:- The invocation of the extended period of limitation was deemed inapplicable.
Conclusion - i) The demand for service tax based on accounting entries was set aside. ii) The classification of transactions as "Intellectual Property Services" was rejected. iii) The invocation of the extended period of limitation was deemed inapplicable.
Appeal allowed.
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