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Service Tax - Case Laws
Showing 261 to 280 of 30277 Records
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2024 (9) TMI 1174
Entitlement for abatement of 70 % from the gross value for the purpose of paying service tax on ocean freight - confirmation of demand of deferential duty attributed to the abatement portion on the ground that the appellant have not fulfilled the condition for availing the exemption under N/N. 26/2012-ST dated 20.06.2012 (Serial No.10) - HELD THAT:- In the present case the service tax demand was confirmed on the ocean freight for the transportation of vessel in respect of imported goods from abroad to Indian port. As per the Hon’ble Gujarat High Court judgment in the MESSRS SAL STEEL LTD. & 1 OTHER (S) VERSUS UNION OF INDIA [2019 (9) TMI 1315 - GUJARAT HIGH COURT] the levy was itself held unconstitutional. However, before passing both the orders of the lower authorities the judgment was not delivered. Therefore in the change circumstances of law, the matter needs to be reconsidered by the adjudicating authority.
The impugned order is set aside - appeal allowed by way of remand to the adjudicating authority to pass a fresh order.
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2024 (9) TMI 1173
Maintainability of appeal - refund claim - time limitation - Whether the order passed under Section 142 of the CGST Act, 2017, is appealable before CESTAT? - HELD THAT:- The Larger Bench while answering the reference as to whether the appeal is maintainable before the CGST Appellate Tribunal and held that the appellant is not entitled to file an appeal against the order passed under Section 142 of the CGST Act, 2017 before the Appellate Tribunal under Section 112 of the CGST Act before the Appellate Tribunal, as Section 112 of the CGST Act allows appeal against the order passed under Section 107 or Section 108 of the CGST Act. Therefore, the Larger Bench came to the conclusion that appeal against the order passed under Section 142 (6) of the CGST Act is maintainable before this Bench.
Tribunal has decided a case involving identical facts. Tribunal held in the case of PUNJAB NATIONAL BANK VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, CENTRAL EXCISE, JAIPUR, RAJASTHAN [2022 (5) TMI 652 - CESTAT NEW DELHI] that 'appellant is entitled for cash refund in view of Section 142(9)(b) of the CGST Act but for the purpose of verification of original invoices/documents, I remand the case back to the original authority for the limited purpose of verification of the invoices/documents.'
The impugned order is set aside - appeal allowed.
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2024 (9) TMI 1172
Grant of erroneous refund - appellants are an intermediary or not - whether the appellant are eligible for refunds filed by them periodically? - HELD THAT:- The appellants are working on a principal-to-principal basis as far as Airbnb, Ireland and PayU are concerned. Airbnb, Ireland is engaged in provision of accommodation to tourists/ visitors all over the places; Airbnb has a pool of accommodation which is offered by the owners of the properties to Airbnb for a consideration; the customers who require accommodation book the same on the website of Airbnb, Ireland. The appellant, pursuant to the Master Service Agreement provides Payment Processing Services by collection reservation amounts booked on Airbnb platform by Indian guests originating in India by initiating payment of fees due to hosts for utilization of their accommodation.
In the instant case, the conditions laid down by Hon’ble Punjab & Haryana High Court in the case of Genpact [2022 (11) TMI 743 - PUNJAB AND HARYANA HIGH COURT] are not satisfied as the relationship between the appellant and the Airbnb, Ireland is not that of a principal agent; there is nothing in the agreement to indicate that the appellants are facilitating the main service provided by Airbnb to their customers; in fact, the appellants are rendering services to ensure that the property owners received their consideration for renting of the property to M/s Airbnb, Ireland; the appellants are not mediating between Airbnb, Ireland and their customers in the provision of the main service. There are no main service and the auxiliary service in the instant case. Though the appellant is located in India, the recipient of the service rendered by the appellant is located outside India; the appellant receives remuneration in foreign exchange and the appellant and Airbnb, Ireland is not different establishments of a distinct person.
As far as the provision of main service is concerned, there are only two parties in the present case i.e. the appellant and Airbnb, Ireland; the appellant provides single service of processing of payment to Airbnb, Ireland; the appellants have no relation whatsoever with the customers accessing the platforms of Airbnb; there is no tripartite agreement either; the clauses of the agreements do not create a principal-agent relationship; the appellant does not receive a commission and does not facilitate any main service between Airbnb, Ireland and their customers. In fact, in the facts and circumstances of the case, the appellants are providing Back Office Services which are outsourced which cannot be called Intermediary Services.
In the instant case, the appellants do not satisfy the conditions so as to render their services to be “Intermediary”. It is clear from the terms of the Agreement that they are on principal-to-principal basis; there is no principal-agent relationship and the appellants do not render any service to facilitate the provision of main service by Airbnb, Ireland. On the other hand, they satisfy the conditions of Rule 6A of Service Tax Rules and accordingly, the services rendered by them to Airbnb, Ireland are to be treated as Export of Services. Therefore, the appellants are eligible for the refunds claimed and they are not liable to pay any service tax on the services rendered by them. Accordingly, the impugned orders are liable to be set aside.
Appeal allowed.
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2024 (9) TMI 1086
Exercise of jurisdiction under Article 226 of the Constitution vis a vis availability of alternative remedy - it is alleged that the Assessing concerned has made wrong calculations by taking the entire period from 01.04.2017 to 31.03.2018 which could not be have been taken into consideration - HELD THAT:- This Court finds it very pertinent to take note of a recent Judgment of the Supreme Court in the case of PHR INVENT EDUCATIONAL SOCIETY VERSUS UCO BANK AND OTHERS [2024 (4) TMI 466 - SUPREME COURT (LB)] wherein the Supreme Court dealt with the aspect as regards exercise of jurisdiction under Article 226 of the Constitution vis a vis availability of alternative remedy. Though a perusal of the said Judgment reveals that the said Judgment was delivered in the case of a proceeding under the Securitization And Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002, but this Court finds it relevant to take note of the observations of the Supreme Court had observed that the High Court ought not to ordinarily entertain a writ petition under Article 226 of the Constitution, if an effective remedy is available to the aggrieved person and such a principle should be applied with great rigor in matters involving recovery of taxes, cess, fees and other types of public money.
Whether this Court should entertain the writ petition at all? - HELD THAT:- In the instant case, the exceptional circumstances as stated in the Judgment of the Supreme Court in the case of M/S GODREJ SARA LEE LTD. VERSUS THE EXCISE AND TAXATION OFFICERCUM- ASSESSING AUTHORITY & ORS. [2023 (2) TMI 64 - SUPREME COURT] is not present in as much as the question which has been raised by the petitioner is on the question of adjudication of facts as in respect to how much amount the concerned Assessing Authority ought to have taken into consideration and which transaction ought not to have been taken into consideration. These aspects in the opinion of this Court can be very well dealt with by the Statutory Appellate Authority. Under such circumstances, this Court finds no ground to entertain the instant writ petition, taking into account that there is an alternative and efficacious remedy available to the petitioner for which the instant writ petition stands dismissed.
This Court is of the opinion that the interest of justice would be met, if further 30 (thirty) days time is granted from today to the petitioner to file an Appeal before the Appellate Authority as mentioned in the impugned order dated 27.03.2024 itself. Accordingly, this Court observes and directs that if the petitioner herein files an Appeal within 30 (thirty) days from the date of the instant order, the Commissioner (Appeals) shall decide the appeal on merits without going into the question of limitation.
Petition disposed off.
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2024 (9) TMI 1085
Violation of principles of natural justice - petitioner was not issued the show cause notice - territorial jursidiction of respondent No. 2 - jurisdiction in view of the fact that the petitioner or his proprietorship concern do not come within the jurisdiction of the Commissionerate of Dibrugarh - no taxable event had taken place within the said Commissionerate - HELD THAT:- The service of notice ought to have been made by way of registered post with acknowledgement due or by speed post with proof of delivery or by duly approved courier. The question, however, arises that can it be said that Sub-Clause (a) of Section 37C (1) of the Act of 1944 have been complied with if the decision, order, summons or notice has been sent not to the proper address, inasmuch as, there is no denial to the averments made in the writ petition or any materials placed showing that the petitioner had/has any office at the place where the show cause notice was addressed. The answer has to be in the negative. Under such circumstances, this Court is of the opinion that the recourse to Sub-Clauses (b) & (c) of Clause 37C (1) of the Act of 1944 is not permissible if the show cause notice was not sent at the proper address.
In the instant case, it would be seen from a perusal of paragraph 1.15 of the impugned order that recourse to Sub-Clause (c) of Section 37C (1) of the Act of 1944 was resorted to on the ground that the service of the show cause notice could not be effected at No. 1 Ghilamara, North Lakhimpur which from the materials placed before this Court do not seem to be the address of the petitioner.
This Court, therefore, is of inhesitant view that the impugned order dated 25.11.2022, was passed without affording due opportunity to the petitioner and as such, the same violates the principles of natural justice which is a facet of Article 14 and 21 of the Constitution. The consequential effect of the above opinion of this Court is that this Court can invoke its jurisdiction under Article 226 of the Constitution in the present facts.
Whether the Office of the Commissionerate, Central Goods and Service Tax, Dibrugarh Division, would have the jurisdiction over the petitioner? - HELD THAT:- The petitioner did not register himself or for that matter do not have a registration under the Finance Act, 1994. The question whether the petitioner had carried out any activities liable for payment of service tax within the jurisdiction of the respondent No. 2 is a question of fact which in the opinion of this Court can be very well adjudicated upon by the jurisdictional Officer. Taking into consideration that the impugned order is held to be bad in law for violation of the Principles of Natural Justice, the petitioner herein would be at liberty to take his defence on the questions as to whether the petitioner would be liable to pay service tax as well as to whether the respondent No. 2 shall have the jurisdiction.
Taking into account that the petitioner does not hold any registration under the Finance Act of 1994, and the registration under the CGST Act of 2017 have no relevance, this Court is of the opinion that the issue pertaining to territorial jurisdiction should be decided by the respondent No. 2, provided the respondent No. 2 decide to issue a fresh show cause notice to the petitioner at his proper address.
The impugned order dated 25.11.2022 is set aside and quashed on the ground that the same has been passed in violation to the Principles of Natural Justice - Petition disposed off.
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2024 (9) TMI 1084
Reversal of CENVAT Credit under Rule 6 of the CENVAT Credit Rules, 2004 - CENVAT Credit on Group Personal Accident Policy, Group Term Life Policy, and Group Mediclaim Policy taken for employees - penalty and interest on tax liability discharged under Reverse Charge Mechanism on legal services - HELD THAT:- Insofar as the reversal of CENVAT credit in respect of non-taxable services in the State of Jammu and Kashmir is concerned, the Tribunal has firstly taken note of the conceded position of the respondent-assessee providing both taxable as well as non-taxable services. It is in the aforesaid context that it has ultimately upheld the right of the assessee for a proportionate reversal in accordance with Rule 6 (3) of the CENVAT Credit Rules, 2004.
In the absence of the appellant having been able to establish any intent on the part of the respondent-assessee to evade payment of duty, there are no justification to interfere with the view ultimately expressed by the CESTAT.
Appeal dismissed.
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2024 (9) TMI 1083
Time limitation - suppression of facts or not - eligibility for CENVAT Credit on input services while also claiming abatement under Notification No. 01/2006-ST - HELD THAT:- Once when the ST-3 returns were filed regularly, the Department cannot allege fraud, collusion, wilful mis statement or suppression of facts, and invoke the extended period of time. In the instant case, the Appellant has regularly filed ST-3 returns consequent upon obtaining Service tax registration. the original authority has failed to give a finding to the effect that considering the facts and circumstances of this case, how extended period is invocable. The impugned order notes that the extended period is invokable as the availment of Cenvat Credit came to the knowledge of the officers during the audit of the records of the appellant. There has been no evidence led by the Department of any positive act of suppression or fraud by the appellant. In this case the Appellant has filed returns regularly and disclosed all information to the department - the extended period of limitation is not invocable in this case.
The CESTAT Delhi in M/S INTERNATIONAL AIR CHARTER VERSUS COMMISSIONER OF CENTRAL TAX (APPEALS – II) , DELHI [2023 (12) TMI 1004 - CESTAT NEW DELHI], allowed the appeal of the assessee on limitation, finding that mere suppression of facts, as alleged by the department, is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked.
The entire demand in the instant case is for the extended period - the show cause notice dated 23.04.2016 is barred by time, as extended period is not invokable in the facts and circumstances of the present appeal.
The impugned order is set aside and the appeal is allowed.
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2024 (9) TMI 1082
Liability of service tax on job work manufacturing of RMC - Revenue is of the view that job work carried out by the appellant is liable to service tax as the exemption under Notification No.08/2005-ST is not available on the ground that the recipient of service is not paying the Central Excise duty - HELD THAT:- It is found that prima facie the activity of process of RMC by the appellant as a job worker appears to be manufacture under Section 2(f), however in both the orders of the lower authorities, it was not clearly discussed that whether the processing of RMC by the appellant is an activity which amounts to manufacture in terms of Section 2(f) of Central Excise Act, 1944.
If the activity is found to be manufacture as per Central Excise under Section 2(f) of Central Excise Act, 1944, the same is excluded from the purview of definition of ‘Business Auxiliary Service’. In such case the activity will not be taxable, therefore, vital aspect of manufacture needs to be carefully examined.
The matter should be remitted back to the adjudicating authority to pass a fresh order in relation to demand of service tax under business auxiliary service. As regard of demand of Rs.15,436/- on GTA service, as conceded by the Learned Counsel the same is upheld - appeal allowed by way of remand.
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2024 (9) TMI 1081
Rebate of service tax paid on ‘specified services’ used for export of goods - period from July 2012 to December 2013 - Rejection of rebate claims filed by the appellant on the ground that they have violated the condition of N/N. 52/2003-Cus dated 31.03.2003 and N/N. 22/2003-CE dated 31.03.2003, in as much as the Granite Blocks manufactured by the appellant were directly exported from the Quarry without getting processed from the premises of the EOU - rejection also on the ground that the appellant has not produced documents such as original invoices, Self certification on input service, FIRC/BRC copies - time limitation.
HELD THAT:- The appellant has claimed rebate in respect of services such as transportation charges, stuffing of cargo, CHA, THC etc. - It is found there is no allegation either in the Notice or in the impugned order that these services were not used in connection with export of goods. It is observed that the only condition prescribed in N/N. 41/2012 for allowing the rebate is that the ‘specified services’ should be utilized in the export of goods.
The proceedings pending before appellate authority for violation of condition of Notifications 51/2003 and 21/2003 cannot be a reason for rejecting the rebate claims. Once it is established that the ‘specific services’ were utilized in connection with the export of goods, the appellant would be eligible for the rebate as provided under the Notification 41/2012 - In the present case, there is no dispute regarding the export of goods. Also there is no dispute regarding utilization of the ‘specified services’ in the goods exported. Accordingly, the appellant has fulfilled all the conditions stipulated in 41/2012 for availing the rebate. Thus, the rejection of rebate claims on account of non-fulfillment of conditions of Notification No. 51/2003 dated 31.03.2003 and Notification No. 21/2003 dated 31.06.2003 is legally not sustainable.
Allegation of non-production of documents for the purpose of processing the rebate claim, such as Original invoices, Self certification on input services, FRIC/BRC copies etc. - HELD THAT:- The appellant has to explain before the authorities that they have furnished all documents required for processing the rebate claims. For this purpose, the matter needs to be remanded back to the Adjudicating Authority for verification of the documents.
Time limitation - HELD THAT:- The claim was originally filed on 28.06.2013, which is within the period of 1 year from the date of export. However, when some clarification was asked for from the appellant and the claim was resubmitted on 13.09.2013, the Adjudicating Authority has considered the re-submission date of 13.09.2013 as the date of filing of the claim and concluded that the claim was hit by the bar of limitation - the rebate claim was originally filed on 28.06.2013, which was within the period of one year from the date of export. The date of re-submission is not the date of filing of the rebate claim - the claim has been filed within the time period of 1 year from the date of export and it is not hit by limitation of time.
Appeal disposed off.
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2024 (9) TMI 1080
Appellant was providing rent-a-cab service or not - extended period of limitation - demand with interest and penalty.
Whether the appellant was providing rent a cab service? - HELD THAT:- Admittedly, the appellants are providing motor vehicles to various clients based on the agreements and received considerations for the same. It is also admitted that ownership of the vehicle continued to remain with the appellant with registration, insurance and other requirements so that the vehicle is owned by the appellant all throughout - In the instant case, it is noted that the car had been hired on monthly basis by the client SECL, as per the sample work order. The rate contract also stipulated that such rate is inclusive of service tax. Accordingly, the impugned order is correct in holding that the appellant is liable to service tax in respect of the services rendered by him under the category of "rent-a-cab services". It is also noted that the aforesaid work order specifically includes that the rate was inclusive of service tax. This clearly means that the appellant was liable to pay the service tax dues for the provision of the said service.
Extended period of limitation - Suppression of facts or not - HELD THAT:- The appellant had taken service tax registration under the rent -a -cab service in 2001- 02. The appellant had filed the returns upto 31.3.2005, and thereafter stopped filing returns. It is recorded in the show cause notice that it was during the examination of the records of SECL that the activity of the appellant came to the knowledge of the department - the appellant was aware that he/she was liable to pay the service tax dues for the provision of the said service, and failed to do so. This clearly establishes their intent to evade the tax. In view of the same, the extended period has been correctly invoked by the department.
Payment of interest - HELD THAT:- In the case of PRATIBHA PROCESSORS VERSUS UNION OF INDIA [1996 (10) TMI 88 - SUPREME COURT] the Supreme Court 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 of interest in the impugned order is correct.
Penalties - HELD THAT:- Penalty u/s 77 upheld - Section 78 of the Finance Act,1994 provides for reduced penalty at 25%, provided the service tax and the interest thereon is paid within 30 days from the date of communication of the order of the Central Excise Officer determining such service tax - In the instant case, the order in original was passed on 31.10.2017. As per the impugned order, the appellant has paid the entire tax and interest amount on 11.07.2016, which is well before the date of the instant order in original. In view of the above, the appellant is eligible for the benefit of reduced penalty under Section 78 of the Act.
Appeal allowed.
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2024 (9) TMI 1079
Violation of condition that Cenvat credit and benefit of Notification No.12/2003-ST had not been availed when the appellant have produced a general declaration from transport agency to this effect - availing the abatement of 75% from the gross amount in respect of goods transport service under N/N. 32/2004- ST - reverse charge mechanism - HELD THAT:- N/N. 32/2004-S.T. prescribes the condition that the transport agencies should not avail the benefit of Cenvat credit and the benefit of N/N. 12/2003-S.T in order to extend the benefit of N/N.32/2004-S.T. to the service recipient who is liable to pay the service tax on reverse charge mechanism.
The adjudicating authority did not accept the declaration only on the ground that such declaration should be made on the body of the consignment note. The contention of the adjudicating authority as well as the Commissioner (Appeals) that the declaration is only to convey the fact that the transport agency is not availing the Cenvat credit as well as the benefit of N/N. 12/2003-S.T. dated 20.06.2003, is completely disagreed - It does not make any difference whether the declaration is given by the transport agency is general or it is given on the consignment note. Moreover, the department could not bring any evidence that such declarations are false or the transport agencies have availed the Cenvat credit and N/N. 12/2003-S.T. In such position the denial of the abatement of 75% to the appellant under N/N. 32/2004-S.T. is only on assumption and presumption. On the face of it the declaration given by the transport agencies evident the fact that the transport agencies have not taken the benefit of both provisions. Therefore, there are no reason why on the basis of general declaration by transport agency benefit of 75% abatement as provided under N/N. 32/2004-S.T. can be denied.
This issue has been considered by the Hon’ble High Court of Gujarat in the case of COMMR. OF SERVICE TAX, AHMEDABAD VERSUS CADILA PHARMACEUTICALS LTD. [2013 (1) TMI 353 - GUJARAT HIGH COURT] where it was held that 'Notification requiring the receiver of the service to pay the tax also does not stipulate any such condition. Therefore, the requirements prescribed by the Board as per circular cannot be mandatory and cannot be used for denying substantive rights.'
Thus, the appellant has correctly availed the abatement of 75% under Notification No.32/2004-S.T. - the impugned order is not sustainable - appeal allowed.
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2024 (9) TMI 1078
Levy of service tax - job-work - process of chrome plating by electroplating process on gravure printing cylinders received from different manufacturers - Business Auxiliary Service or not - Eligibility for benefit of N/N. 12/2012-ST under serial no.30 (c) - HELD THAT:- It is found that the appellant have carried out the job work process namely chrome plating by electroplating process on gravure printing cylinders which in turn used by principal in the manufacture of excisablegoods on which excise duty is paid.
From the exemption entry, it is found that an intermediate production process as job work in relation to any goods on which appropriate duty is payable by principal manufacturer is exempted. In the present case the appellant’s intermediate production process is chrome plating by electroplating process on gravure printing cylinders which directly used in relation to the manufacture of goods on which appropriate duty is payable by the principal manufacturer. Both the lower authorities have interpreted that the very goods on which the job work process is carried out should be cleared on payment of duty. It is their contention that since the cylinder on which the chrome plating was carried out itself is not cleared on the payment of duty. Therefore, the exemption is not available.
As per the facts of the present case the chrome plating by electroplating process on gravure printing cylinders is a vital process which is directly related to the goods which is manufactured by the principal manufacturer on which appropriate duty is payable by the principal manufacturer.
There are no reason to deny the legitimate benefit of the exemption to the appellant - the impugned order is set aside - appeal allowed.
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2024 (9) TMI 1077
Demand of differential service tax - credit notes issued on account of lowering of contract price due to Progressive Plant Available Factor less than 75% - Chargeability of service tax on the value of spares and consumables supplied during the course of provision of service of operation and maintenance of power plant of the service recipient - Cenvat credit availed on such spares and consumables.
Whether the credit notes issued on account of lowering of contract price on account of PAF less than 75%, is liable to service tax or otherwise? - HELD THAT:- Even though by way of credit note the contract price has been lowered but the same was on account of less performance with regard to PAF less than 75% as per contract between the respondent and service recipient. With this arrangement it is clear that when there is low performance i.e. PAF is less than 75%, the service is not as per the contract and for lower performance of service the amount was deducted by way of credit notes. It is also the fact that the amount of credit notes stand reduced from the contract price as mentioned in the contract therefore, the reduced amount of fees is the actual amount which is charged by the respondent to M/s. GMDC Limited. The provisions of Section 67 of Finance Act, 1994 clearly provides that gross value for charging service tax is the value which is charged towards provision of service - In the present case, the contract price minus credit note amount is the gross value charged by the respondent to service recipient M/s. GMDC Limited. Therefore, it is the reduced amount of service charge as gross value which is strictly in terms of Section 67 of the Finance Act, 1994 therefore, no further notional addition can be done for charging service tax - the Adjudicating Authority has rightly dropped the proceedings to the extent the demand of service tax on the credit note issued by the respondent to the recipient i.e. M/s. GMDC Limited.
Whether service tax is charged on the value of spares and consumables supplied during the course of provision of service of operation and maintenance of power plant of the service recipient? - HELD THAT:- It is found that the contract is for two transactions one is for service simpliciter i.e. maintenance and operation of power plant and the service charge for the same is fixed only for service and the second limb of contract is for supply of spares and consumables which is nothing but sale of goods. In this fact, the value of spares and consumables cannot be included in the service of operation and maintenance of power plant.
Cenvat credit availed on such spares and consumables - HELD THAT:- The respondent has undertaken to reverse the credit involved in the spares and consumables on which no service tax was paid. Accordingly, the appellant is required to reverse the cenvat credit in respect of spares sold by them on which no service tax was paid.
There are no infirmity in the order of the Adjudicating Authority therefore, Revenue’s appeal is not maintainable hence the Revenue’s appeal is dismissed.
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2024 (9) TMI 1076
Time limitation - suppression of facts or not - Eligibility for exemption under SEZ Rules 2006 - providing security services to M/s Larsen & Toubro Limited and availed the exemption eligible under Rule-10 of the SEZ Rules, 2006 - HELD THAT:- The appellant in their ST-3 returns for the period April to September 2010 declared the value towards exempted service which is in respect of service provided in the SEZ. The appellant had a bonafide belief that service provided in SEZ as sub-contractor is exempted under N/N. 9/2009-ST, as amended vide N/N. 17/2011-ST. Since the appellant have declared in the ST-3 return the value of exempted service which is subject matter of the present appeal, there is no suppression of fact on the part of the appellant. Moreover, the appellant had strong prima-facie case on merit also therefore bonafide belief of the appellant cannot be doubted.
There is no malafide intention in non-payment of service tax in respect of service provided in SEZ. Accordingly, the demand is not sustainable on the ground of time-bar itself. Hence, the impugned order is set-aside - Appeal allowed.
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2024 (9) TMI 1075
Taxability - services rendered by the appellant as Consulting Engineer - export or not - period 01.04.2006 to 24.02.2009 - Rule 3 of Export of Service Rules, 2005 - liability of appellant to pay service tax on “Club or Association Service” and “other services” received by them during the period 2006-07 to 2010-11 - invocation of extended period of limitation.
Whether the services rendered by the appellant as "Consulting Engineer" qualified as export during the period 01.04.2006 to 24.02.2009 under Rule 3 of Export of Service Rules, 2005? - HELD THAT:- The appellants are engaged in the provision of Consulting Engineers Service under contracts entered into with their foreign principals; the appellants prepare the drawings and designs as required for the specific projects, send it to their principals for modifications and approvals and on approval upload the same in the Central Repository of the overseas entity through a dedicated WAN; the foreign entities of the appellant, who in turn entered into agreements with projects executed in India, supply designs, drawings etc. relating to the projects. The appellants have thus submitted the drawings and designs in respect of projects like Jamnagar Export Project, KG-D6, Dabhol Project etc. - The case of the appellants is that the drawings and designs though prepared by them are whetted and improved upon by their overseas principals and only after their final approval, the same is uploaded in the Central Repository; they are preparing the designs as per the direction of their overseas entities under a contract; they are receiving the consideration thereof from their overseas entities and they have no communication, whatever, between them and the Indian companies who are using such drawings.
It is found that learned Commissioner observes that during the period under consideration, export of service is also subject to the condition that the “service is delivered outside India and is used outside India” or “service provided from India and is used outside India as the case may be”; as the services rendered by the appellant are tailor made to the Indian companies, they cannot be used outside India and therefore, to that extent, the services are not used outside India - CBEC Circular dated 13.05.2011 cites as an example that it is possible to obtain a consultancy report from a service provider in India, which may be used either in the location of the customer or in any other place outside India or even in India; in a situation where the consultancy, though paid by client located outside India is actually used in respect of a project or an activity in India, the service cannot be used outside India.
In respect of the exemption claimed by the appellants towards the supplies claimed to have been rendered to M/s JERP Project, Jamnagar, learned Commissioner himself finds that the exemption contained under Notification No.09/2009 or 15/2009 is not applicable as in this case, the services have been provided by the assessee to the aforesaid overseas group company by electronic media in connection with M/s JERP Project of Reliance Group in India - There is nothing on record to show that there has been any communication between the appellants and the Indian projects leaving alone any agreement between them - the services rendered by the appellants to their overseas entities constitute export of services during the impugned period and accordingly, the demand on this issue cannot survive.
Whether the appellant is liable to pay service tax on "Club or Association Service" and "other services" received during the period 2006-07 to 2010-11? - HELD THAT:- The payment made was towards the use of professional associations and clubs abroad which were utilized by the officers or employees of the company when they visited abroad for their professional work. Department could not produce any evidence to show that the said service is enjoyed in India. The service being rendered and utilized abroad, the taxability of the same in India does not arise. As regards the demand on other services, we find that the appellants have accepted their liability and paid duty with interest before the issuance of Show Cause Notice. In view of the facts and circumstances of the case, no case for levy of penalty has been made.
Demand of Service Tax to the extent of Rs.5,29,728/- and interest of Rs.1,58,833/-, which is already paid by the appellant, is confirmed; rest of the demand is set aside - All the penalties are, however, set aside - Appeal allowed in part.
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2024 (9) TMI 1028
Time limitation for filing SCN - discrepancy between the figures reflected in balance sheets etc. and the service tax Returns - extended period of limitation - HELD THAT:- It is found that the case is made by the Department on the ground that there is discrepancy between the figures reflected in balance sheets etc. and the service tax Returns. No effort to co-relate the income/ receipt shown in the balance sheet to any particular service rendered by the appellants to any particular entity appears to have been made. It is not open for the Department to allege evasion of service tax on this count. The onus to prove the nexus between consideration and the service is on the Department who have made the allegations and issued the Show Cause Notice. Moreover, it is not open for the Revenue to invoke extended period under such circumstances. When no positive act, with intent to evade payment of duty, on the part of the appellant has been shown, has been evidenced. It has been held in a catena of judgments that under such circumstances, extended period cannot be invoked.
By following the ratio of such decision, the Revenue has not made out any case for invocation of extended period. Moreover, the Department also does not have any case on merits on other issues. Learned Commissioner (Appeals) could have easily seen that the appellants have satisfactorily explained their stand and have displayed that no service tax is payable by them in respect of the issues raised in the Show Cause Notice.
The appellants have also submitted copies of necessary certificates, affidavits, Chartered Accountant certificates. It was not proper on the part of Commissioner (Appeals) to brush aside the glaring evidence in favour of the appellants. In view of the same, it is found that neither the Show Cause Notice nor the impugned order can be sustained - appeal allowed.
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2024 (9) TMI 1027
Cash refund of accumulated CENVAT credit under Rule 5 of CCR, 2004 - only ground on which the refund claims were rejected by the adjudicating authority and upheld in the impugned order is that the appellant had not executed the bond while exporting the goods - HELD THAT:- This issue has been considered by this Tribunal in the case of C.C.,C.E. & S. T-BELGAUM VERSUS BELLARY IRON ORES PVT. LTD. [2018 (10) TMI 219 - CESTAT BANGALORE] following the judgment of the Hon’ble High Court of Bombay in the case of COMMISSIONER OF C. EX. & CUS., AURANGABAD VERSUS JOLLY BOARD LTD. [2016 (9) TMI 1355 - BOMBAY HIGH COURT] it is observed 'cenvat credit is admissible in terms of Rule 6(6) when goods are exported and there is no requirement to execute any bond if the exported goods are exempted.'
The impugned order is set aside and the appeals are allowed.
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2024 (9) TMI 1026
Liability of service tax on sub-contractor to main contractor - appellants are providing Site Formation services on Works Contract basis as sub-contractor to various clients - service tax on Site Formation services - service tax on MMRS provided for maintaining roads - service tax on Excavator rent - interest - penalty.
Liability of service tax on sub-contractor to main contractor - appellants are providing Site Formation services on Works Contract basis as sub-contractor to various clients - HELD THAT:- It is found that the Larger Bench in the case of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB] have set aside the confirmed demand amount on account of time bar after holding that on merits the Appeal fails. Following the ratio, the confirmed demand in respect of the services provided by the Appellant as sub-contractor is set aside.
Service tax on Site Formation services - HELD THAT:- In respect of Site Formation services provided by the Appellant and completed before the service was notified, it is held that no Service Tax is payable and hence, we allow the Appeal by setting aside the demand of Rs.48,960/-.
Service tax on MMRS provided for maintaining roads - HELD THAT:- In respect of MMRS provided by them for maintaining roads, it is found that retrospective effect has been given to give the benefit of exemption for the service providers who are taking up the management and maintenance of roads. Accordingly, the confirmed demand of Rs.14,53,536/- is set aside.
Service tax on Excavator rent - HELD THAT:- The Appellant is not contesting and accordingly, these amounts are payable along with interest.
Interest - HELD THAT:- In respect of interest of Rs.8,42,830/-, the Appellant is not contesting and is required to pay interest immediately.
Penalty - HELD THAT:- Since almost the entire demand amount stands set aside on various counts, there are no justification for imposing penalty on the Appellant company. Accordingly, all the penalties imposed are set aside - In respect of penalty imposed on the second Appellant, it is found that he is only acting as an employee of the company. As major portion of the demand has also been set aside. Hence, there are no justification in imposing any penalty on the employee.
Appeal allowed in part.
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2024 (9) TMI 1025
Dismissal of appeal on the ground that Appellant has failed to comply with the provisions of Section 35F of Central Excise Act without going into its merits - HELD THAT:- The provisions towards Pre-deposit under Section 35F were amended w.e.f. 06.08.2014. Learned Counsel submits that as per this, the Appellant is required to pay total 10% of the litigated amount when the matter is taken up for Hearing before the Tribunal. This condition has been fulfilled by them since they have made payment of Rs.4,13,960/- by way of challan - this amount is sufficient Pre-deposit for Hearing the case by the Commissioner (Appeals).
Similar issue was before the Ahmedabad Bench of this Tribunal in the case of ACCRA PAC INDIA PVT LTD VERSUS C.C.E. & S.T. -DAMAN [2023 (9) TMI 1552 - CESTAT AHMEDABAD], wherein it was held that 'We find that though at the time of passing the said order by the Commissioner (Appeals) the amended provision of Section 35 F was not in force. However, in the matters coming before the Tribunal related to pre-deposit after the amendment of Section 35 F, this Tribunal taking a lenient view allowing the admission of the appeal on pre-deposit of 10% as prescribed under amended Section 35 F. Therefore, we are also of the view that since the appellant have already deposited 10% of the duty amount, the same is sufficient to hear the appeal on merit.'
The matter remanded back to the Commissioner (Appeals) to take up the Appeal on record and decide the issue on merits.
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2024 (9) TMI 1024
CENVAT Credit - input services - accumulated credit on account of export of goods made during the relevant quarters under Rule 5 of CENVAT Credit Rules, 2004 - HELD THAT:- Since the input services in various decisions are held to be admissible to credit, therefore, denial of cash refund of accumulated CENVAT credit on export of services by the appellant during the relevant period cannot be denied.
Reliance placed in GOLFLINKS SOFTWARE PARK PVT LTD VERSUS C.C.E & C.S.T. -BANGALORE [2018 (8) TMI 331 - CESTAT BANGALORE] and OMEGA HEALTHCARE MANAGEMENT SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU EAST [2021 (8) TMI 875 - CESTAT BANGALORE].
Appeals are allowed.
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