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Service Tax - Case Laws
Showing 281 to 300 of 30972 Records
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2025 (1) TMI 1444
Service or not - reimbursement of fixed costs by the appellant to refrain from utilizing their plant and machinery for other parties - levy of service tax - HELD THAT:- Learned Commissioner (Appeal) while adjudicating the matter has not considered various legal pronouncements on this issue.
The matter is no longer res-integra, as the matter has already been decided by this Tribunal in case of the appellant in case of Commissioner of Central Excise & Service Tax, Anand Vs. Standard Pesticides Pvt. Limited [2024 (3) TMI 1043 - CESTAT AHMEDABAD] where it was held that 'The fact that appellant (earlier known as PMSL) was charging two components towards job-charges separated as fixed cost and variable cost cannot alter this situation so long as goods were manufactured. In a situation where goods were not manufactured but charges were collected under the fixed component it could have been considered as a service. While working out cost of any manufactured product costing is done by splitting cost elements into fixed cost and variable cost and that cannot change the nature of the activity. What could have changed the nature of the activity is a situation where no manufacturing activity took place and still the appellant collected their charges.'
There is no merit in the impugned order-in-appeal - Appeal allowed.
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2025 (1) TMI 1443
Addition of TDS on the gross amount to arrive at the taxable value - Service Tax demand on exempted services - denial of Abatement under N/N.1/2006 - liability of sub-contractors to pay service tax.
Addition of TDS on the gross amount to arrive at the taxable value - HELD THAT:- It is found from Annexure-II attached to the show cause notice that in order to arrive at the taxable value, TDS amount is added to the Gross amount of the contract value, whereas in the Form 16A enclosed with the appeal, it is found that the TDS amount is deducted from the amount paid to the appellant and hence, the amount paid is itself the gross amount. Therefore, adding TDS amount once again has resulted in arriving at the inflated taxable value. TDS is always deducted from the amount payable and it is not any other consideration. Therefore, the demand on this score cannot sustain and hence, the impugned order to this extent is set aside.
Service Tax demand on exempted services - denial of Abatement under N/N.1/2006 - HELD THAT:- Construction of (a) Toilets at TNEB office (b) Construction of Security Protection wall (i) in and around LMHEP Barrage unit (ii) right side of Dam Power House, (iii) in and around of central stores and raising of compound wall of the central stores are exempt in terms of Letter F. No. B2/8/2004 TRU dt.10.09.2004 - Similarly, Laying of underground power cable at Lower Mettur Hydro Electric Projects at Chekkanur Barrage, Nerinjipettai Barrage, and Kuthiraikkalmedu Barrage are exempt from tax in terms of Board’s Clarification in C. No. 123/5/2010-TRU dt. 24.05.2010 (F. No. 332/5/2010 - TRU) and Circular No. 62/11/2003 – ST - dated 21.8.2003 (F. No. B3/7/2003-TRU) - Wiring and rewiring at quarters/town quarters and LMHEP quarters at Kuthiraikkalmedu is also exempt from service tax vide Board’s Circular No. 62/11/2003-S.T., dated 21-8-2003 F. No. B3/7/2003-TRU - Providing WBM and Black topping over existing path in Thokkanampatti camp area and inside barrage -II at Nerinjipettai is exempt from service tax as per Section 65(25b) of the Finance Act, 1994, in terms of Para 2(i) of Board’s Circular No.123/5/2010 TRU dated 24.05.2010 in F.No.332/5/2010-TRU.
The demand made in the impugned order on this score also cannot sustain and hence, the impugned order to this extent stands set aside.
Liability of sub-contractors to pay service tax - HELD THAT:- The Larger Bench in the case of COMMR. OF S.T., NEW DELHI vs MELANGE DEVELOPERS PRIVATE LIMITED [2019 (6) TMI 518 - CESTAT NEW DELHI-LB] held that 'in the scheme of Service Tax, the concept of Cenvat credit enables every service provider in a supply chain to take input credit of the tax paid by him which can be utilized for the purpose of discharge of taxes on his output service. The conditions for allowing Cenvat credit have been provided for in Rule 4. The mechanism under the Cenvat Credit Rules also ensures that there is no scope for double taxation‘.'
Suppression of facts - penalty - HELD THAT:- The suppression cannot be alleged and hence, consequent penalty is not imposable.
Conclusion - i) The demand of service tax confirmed in the impugned order except sub-contractors, are set aside. ii) The demand of service tax on sub-contractors is sustained only for normal period and the other demand confirmed in the OIO by invoking extended period is set-aside. iii) The matter is remanded for the limited purpose of determining of tax liability for the normal period, along with applicable interest, but however, there shall be no penalty on such determination of tax and interest.
Appeal allowed by way of remand.
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2025 (1) TMI 1442
Refund of amount which the appellant had deposited in compliance to the Stay Order dated 11.11.2013 by the Tribunal - rejection of refund claim on the ground of time limitation - non-submission of the re-conciliation statement of the service tax paid on “Renting of Immovable Property Services”.
Whether the amount of Rs.16,14,167/- deposited by the appellant on 19.12.2013 has to be treated towards the service tax liability or as pre-deposit in terms of Section 35F? - HELD THAT:- The Tribunal has granted waiver of pre-deposit and stayed the proceedings in terms of the impugned order, subject to the condition that the appellant shall remit the requisite amount along with interest within a period of 6 weeks. The order passed is simple and clear that the appellant was required to make the pre-deposit for consideration or appeal and also to avail the benefit of the Stay Order as otherwise, they would have suffered the dismissal of appeal. The amount in the form of pre-deposit is also towards the liability of tax to avail the remedy of statutory appeal. Learned counsel for the appellant submitted that Section 35F before substitution by the Act 25 of 2014 (w.e.f. 06.08.2014) required the assessee to deposit the duty demanded or the penalty levied for challenging the impugned order and the appellant was required to make an application for dispensing with the pre-deposit of duty demanded or penalty levied.
The appeal under the provisions of Section 35F is a statutory appeal and it is a settled principle of law that a statutory appeal is maintainable subject to the compliance of the conditions laid down in the statue providing the remedy of appeal. Section 35F, in unequivocal terms says person desirous of appealing the order demanding the duty is required to deposit the duty/ penalty demanded, pending the appeal. in terms thereof, the Tribunal directed the appellant to deposit part of the duty amount involved and appellant paid the same in compliance thereof.
The interest on delayed refund has been held to be payable to the assessee from the date of deposit in the case of Executive Engineer (Workshop) M. P. Power Transmission Co. Ltd., vs. Commissioner (Appeals) Central Excise Customs & CGST [2025 (1) TMI 1254 - CESTAT NEW DELHI] till the date of its refund. In similar circumstances where refund was directed to be paid to the assessee, we had also granted interest @ 12% per annum.
Conclusion - i) The amount deposited by the appellant was a pre-deposit under Section 35F and not a service tax liability. ii) Section 11B's limitation period does not apply to refunds of pre-deposits made under Section 35F. iii) The appellant is entitled to a refund of the pre-deposit amount along with interest at 12% per annum from the date of deposit.
The impugned order is unsustainable and is hereby set aside - Appeal allowed.
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2025 (1) TMI 1441
Recovery of service tax with interest and penalty - it is alleged that for the period 2011-2012, it had shown less income, thereby, made short payment of service tax - invocation of extended period of limitation.
Invocation of Extended period of limitation - HELD THAT:- It would be seen from a perusal of sub-section (1) of section 73 of the Finance Act that where any service tax has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice.
The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word “one year”, the word “five years” has been substituted - the demand for the period from April, 2011 to September, 2011 is hit by limitation as it is even beyond the period of five years.
Whether the extended period of limitation could have been invoked in the facts and circumstances of the case for the period from October, 2011 to March, 2012? - HELD THAT:- It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be “wilful‟ since “wilful‟ precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression “wilful” before “suppression of facts” under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be “wilful‟ and there should also be an intent to evade payment of service tax.
In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT], the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since “suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty.
The extended period of limitation could have been invoked only if there was suppression of facts with intent to evade payment of service tax.
Conclusion - The service tax demand for the period from April, 2011 to September, 2011 is beyond the period of five years and the service tax demand from October, 2011 to March, 2012 could not have been confirmed and the extended period of limitation could not have been invoked.
Appeal allowed.
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2025 (1) TMI 1440
Failure to discharge proper service tax - Storage and Warehousing Services (SWS) - Goods Transport Agency service (GTA) - Renting of Immovable Property Service (RIS) - whether in the facts of the case, the demand levied on the appellant under section 73 under different categories viz., SWS, GTA and RIS as also under section 73A are sustainable or otherwise?
Storage and Warehousing Services (SWS) - HELD THAT:- The rates have been prescribed for various activities covered within the ambit of rake handling contract and it was agreed that the appellant will pay wharfage and demurrage charges, if any, in time to Railways and inform the company for reimbursement. Therefore, the perusal of these documents, which clearly show that it was agreed upon that initially the appellants would pay to railways the wharfage and demurrage charges and thereafter, claim the same on actual basis from cement companies. These documents support the submission of the appellant that they were merely paying on behalf of the cement companies and it was on reimbursement basis. The Adjudicating Authority has denied the exclusion of these charges primarily on the grounds that there is no evidence to suggest that this was being reimbursed on actual basis by the cement companies to the appellant, which, however, is not correct, in view of the representative documents submitted by the appellant. In any case, the department’s stand is that in terms of Rule 5 of the Service Tax (Determination of Value) Rules, 2006, any amount received as reimbursement needs to be included in the gross value. However, in view of the judgment of Hon’ble High Court of Delhi, subsequently, upheld by Hon’ble Supreme Court, in the case of Intercontinental Consultants & Technocrats Pvt Ltd [2018 (3) TMI 357 - SUPREME COURT], Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 was held ultravires. It was only after amendment in Section 67 by the Finance Act, 2015, the reimbursement expenditure or costs were required to be included for determination of gross value. Therefore, in view of this decision, any amount proposed to be included in the gross value on SWS, which has been received on reimbursement basis would not sustain and on this ground also, demand to the extent of non-inclusion of income on account of reimbursable wharfage and demurrage charges would not sustain.
Goods Transport Agency service (GTA) - HELD THAT:- In the facts of the case, the Service Tax liability has to be made good by the cement companies on RCM basis and not by them, whereas, the department is also admitting that this amount of transportation charges from the railway station to their godown is not taken into account for the purpose of calculating gross value and short payment and only ex-godown has been taken into consideration. The other issue is whether department has relied on the income shown as local transportation charges, which has been subsequently reimbursed at agreed rate, as also any other charges, which could be on account of their having paid initially for transportation of goods from railway station or godown directly to the distributor premises and later recovered by them. Since these aspects are not clear from the facts of the case, this needs to be ascertained.
Applicaility of Section 73A - HELD THAT:- There is enough evidence to suggest that certain amount collected has already been paid and therefore, entire amount cannot be considered as recoverable. There is some dispute about actual amount of Service Tax paid from the amount collected, which has to be corroborated with the evidence. Therefore, this also needs to be ascertained.
Imposition of penalty on RIS - HELD THAT:- The penalty under Section 76, 77 & 78 would not survive if the payment including interest has already been made prior to 2012 itself. This also needs to be re-ascertained and reconciled before imposing penalty for balance amount of Service Tax collected but not paid before 2012.
Time limitation - HELD THAT:- The demand is based on P&L account and ST3 returns and it is an admitted position that this P&L account breakup and other things were not reflected in ST3 returns and in fact, they have taken various grounds in defence of denying leviability of Service Tax on income reflected in P&L account including their being pure agent, etc. In the facts of the case, we find that ground of limitation has been rightly invoked. However, it is subject to demand getting sustained on merit itself in the denovo proceedings.
Conclusion - i) The demand for including wharfage and demurrage charges in the gross value for SWS is unsustainable, and this portion of the demand is set aside. ii) The issue of GTA service liability is remanded for determination of who is liable to pay the Service Tax and whether the cement companies have discharged the liability. iii) The amount of Service Tax collected and paid under Section 73A needs to be redetermined, and penalties should be reassessed accordingly. iv) Penalties under Sections 76 and 78 cannot be imposed simultaneously, and reassessment is required based on the sustainable demand. v) The issue of the correct penalty rate under Section 76 is remanded for determination based on the actual cut-off date and statutory provisions.
Appeal allowed in part by way of remand.
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2025 (1) TMI 1378
Declaration under the Voluntary Compliance Encouragement Scheme (VCES) - declaration was "substantially false" or not - Department is of the view that the appellant has not made a true and truthful declaration under VCES scheme and basic premises on which the declaration of the appellant was rejected - Classification under Works Contract Service or Commercial Construction Service - HELD THAT:- The Adjudicating Authority has not considered the work invoices issued by the appellant. While deciding the matter, the Adjudicating Authority has not decided whether the activity undertaken by the appellant falls under the category of “Works Contract Service” or under “Construction Service”. It is also opined that the Adjudicating Authority while holding the subject activity falls under commercial construction service, he has also not provided the facility of the abatement of the value as provided under N/N. 13/2012-ST dated 28.06.2012 while confirming the demand of service tax. The fact is noted that while the appellant has been claiming that activity undertaken by them falls under category of “Works Contract Service” while the department has considered the same is “Commercial Construction Service”.
The Circular No.170/05/2013-ST dated 08.08.2013 clearly provides that the Commissioner would “in overall facts of the case take into account the reasons he has to believe, take a judicious view as to whether a declaration is “substantially false”, it is not feasible to define the term “substantially false” in precise terms, the proceedings under Section 111 would be initiated in accordance with the principles of the Natural Justice.” In view of the Board’s circular, the Adjudicating Authority has to categorically determine as to how a declaration made under VCES scheme is “substantially false”. In this case the Adjudicating Authority has not determined whether the activity undertaken by the appellant qualified to fall under “Works Contract Service” as claimed by the appellant on the basis of work orders and invoices.
Conclusion - The determination of whether a declaration under VCES is "substantially false" must be made in accordance with the principles of natural justice and relevant legal precedents. The classification of the appellant's services as "Works Contract Service" or "Commercial Construction Service" is crucial for determining the correct tax liability and entitlement to abatements.
Appeal allowed by way of remand.
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2025 (1) TMI 1377
Extended period of limitation - whether the demand for the period on 1 April 2010 to 30 September 2010 is barred by limitation for not? - HELD THAT:- From the provisions of Section 73 the 'relevant date' in the case of the appellant has to be computed calculating one year from the date of issue of show cause notice. The appellant was required to file service tax returns for the period April 2010 to September 2010 by October 25, 2010 and for the period October 2010 to March 2011 by April 25, 2011, therefore, the relevant date for computing the normal period in the case of service tax liability for the period April 2010 to September 2010 is 25.10.2010 and hence the show cause notice was required to be issued by 24.10.2011. The show cause notice dated 17.10.2011, therefore, falls within the period of one year and the demand for the period April 2010 to September 2010, therefore, falls within the normal period.
There are no error in the service tax liability confirmed by the authorities below on the appellant for the period involved. The calculation arrived at by the learned counsel for the appellant in the submissions placed during the course of hearing calculating the demand of Rs. 1,07,718/- for the period from 01.04.2010 to 30.09.2010 being barred by limitation is not correct.
There are no reason to interfere with the impugned order and hence the appeal is dismissed.
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2025 (1) TMI 1376
Classification and tax liability of services - whether there is any liability to pay Service Tax by the appellant for the period prior to 01.07.2010 as well after or not and if they are liable to pay Service Tax, then under which category their services would fall? - HELD THAT:- The appellant have canvassed that the matter regarding non-leviability of Service Tax on CRCS or for that under WCS prior to 01.07.2010 is no longer res integra as it has been held in catena of judgments passed by the Tribunals that Service Tax is not leviable. Insofar as the issue of the activity being in the nature of WCS, which is not covered by the scope of the circular, he further submits that in terms of settled law now irrespective of whether the nature of construction service is simpliciter or in the nature of WCS, no Service Tax is leviable on them for the period prior to 01.07.2010. Therefore, the dropping of demand by the Adjudicating Authority for the period prior to 01.07.2010 is correct. For the period beyond 01.07.2010, their main argument is that since the Adjudicating Authority himself has confirmed the demand under different heading than what was proposed in the SCN, the demand itself is not tenable on this ground alone.
While the appellant is mainly adducing that demand is not sustainable on the ground that Adjudicating Authority has not confirmed the demand under proposed classification and on this sole ground, the demand is liable to be set aside. It is found that in the facts of the case, it is not tenable as Commissioner has classified in the impugned order as CRCS, considering it as part of WCS and by holding that this is more specific and at no point of time he has held that there is no element of WCS in the said CRCS. In other words, he has not held, in the case of appellant, that it was CRCS simpliciter rather he has held that it is CRCS, which is very much in the nature of WCS. There is some merit in the departmental appeal as well as appellant’s claim. However, the best way would be to remand the matter to the Commissioner to decide the matter afresh for the demand for the period beyond 01.07.2010. While doing so, he shall go by the admitted facts and evidence on record to decide whether there is any exclusion or exemption available for the said service (WCS/CRCS) in the given set of facts and evidence on record to arrive at the demand for the period beyond 01.07.2010.
Conclusion - The classification of services post 01.07.2010 requires reevaluation by the Adjudicating Authority to determine the correct category and applicable tax liability.
The Adjudicating Authority, in the remand proceedings, should examine proper classification i.e., WCS or CRCS, in the facts of the case and whether any exemption or exclusion exist for not demanding Service Tax for the period beyond 01.07.2010. This appeal is allowed by way of remand.
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2025 (1) TMI 1375
Time limitation - whether the Revenue was justified in invoking the extended period of limitation in fastening the service tax liability under BAS on the appellant? - HELD THAT:- It is not the case of the Revenue that in every case where the early payment incentive is received, the end--customers had in fact made payments in advance or at an early date. But there is no cross verification as to the payments made in advance by the appellant vis--à--vis the payments made by the end customers.
The period of dispute is from 01.04.2007 to 31.03.2011, for which the show cause notice dated 19.10.2012 came to be issued, by invoking the larger period of limitation, for which the finding given in the OIO is that the receipt of incentive was noticed only on the scrutiny of annual financial records of the appellant. The same was therefore held to have been knowingly suppressed, to justify the issuance of the show cause notice under Section 73(1) of the Finance Act, 1994 - There is also no specific logical finding that the early payment incentive received by the appellant was liable to service tax other than mentioning that the same was liable to service tax under BAS. Hence, the Revenue has failed to make out a case for invoking the larger period of limitation and that too, to demand service tax which the appellant was not established to be liable to pay.
There are no merit in the demand based against the appellant which came to be upheld in the order and hence, the impugned order deserves to be set aside - appeal allowed.
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2025 (1) TMI 1374
Liability to pay service tax under the category of "Commercial Coaching and Training" for the period from 2006-07 to 2009-10 - benefit of exemption under N/N. 10/2003-ST dated 20.06.2003 - Extended period of limitation - suppression of facts or not - HELD THAT:- As regards the findings on merit returned by the learned Commissioner (Appeals) supported with relevant notification and the case-laws, there are no infirmity in the same; but as regards the invocation of extended period of limitation, it is found that the demand has been confirmed by invoking the extended period of limitation and the learned Commissioner (Appeals) has recorded a finding that though there was no intention to evade the payment of service tax, still suppression on their part satisfies one of the ingredients of Section 73 of the Act. The finding of the learned Commissioner (Appeals) is self-contradictory because the “suppression” and for that matter other ingredients in Section 73 of the Act are qualified by the phrase “with intent to evade payment of tax”, therefore, if there is no intention to evade payment of tax, then the charge of suppression is not sustainable in law.
The issue involved in the present case was purely of interpretation of the exemption notification and therefore, “suppression” cannot be alleged. Further, when the extended period of limitation cannot be involved, then the demand for period, which is within the limitation, cannot be confirmed.
The impugned demand is entirely barred by limitation; accordingly, on merit the demand is upheld, but on limitation, the demand is set aside - Appeal allowed.
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2025 (1) TMI 1373
CENVAT Credit - whether the inputs like angles, channels, beams etc,, used to erect tower and prefabricated buildings/shelters which are used for housing / storage of generator set / equipments and hoisting the antenna etc., in respect of which the credit has been denied by the Department, would be eligible for taking credit when used for setting up of mobile towers and pre-fabricated structures etc., by treating them as immovable goods? - HELD THAT:- This matter has been dealt with in detail by the Hon’ble Supreme Court in the Bharti Airtel [2024 (11) TMI 1042 - SUPREME COURT], where they have gone through various judgements including that of Mumbai High Court in the case of Bharti Airtel as well as Delhi High Court in Vodafone [2018 (11) TMI 713 - DELHI HIGH COURT] and finally observed and held that mobile towers are not in the nature of immovable goods.
Hon’ble Supreme Court also examined and decided on the issue, as to whether the credit would be admissible as an input or capital goods. Relevant observation by Hon’ble Supreme Court, it was, interalia, held that since tower is to be considered as capital goods and therefore all components, spares and accessories would also fall within the category of capital goods.
Conclusion - The denial of credit in respect of Angles, Channels, Beams etc., used to erect towers as also on PFB etc., falling under Chapter 94 used for housing /storage of generating sets and other equipments/components, is not sustainable.
Appeal allowed.
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2025 (1) TMI 1323
Levy of service tax - Commercial Training and Coaching Centers services - appellants are facilitating the conduct of classes and award of degree by IIM, XLRI etc - principles of natural justice - HELD THAT:- On going through the Clauses/ Articles of different Agreements, it is clear that the appellants are providing and maintaining infrastructure like classrooms, uninterrupted communication and are marketing the programs; they provide and maintain the facilities under an Agreement with the institutions; the coaching methodology (Pedagogy) is decided by the institutions themselves; the institutions conduct examinations and award certificates; the appellants are also associated with the conduct of the examinations inasmuch as providing invigilators their own or hired; there is a revenue sharing between the appellant and the institutions.
Undisputedly, the appellants are involved in providing the infrastructure required for conduct of classes and examinations; they are associated in the activity of the imparting education and award of degrees with the institutions like IIM/ XLRI. At the same time, it cannot be said that the appellants are imparting education and it also cannot be said that they are a commercial coaching or training institute - in a typical Commercial Coaching or Training Center, the Centre has no connection with those who conduct the examination; the respective authorities like universities/ colleges/ institutes/ professional bodies conduct the examinations and the coaching centers trained students/ candidates for the examinations. In the instant case, the services rendered by the appellants are not at all akin to those rendered by the coaching centers.
In view of the findings of the learned Commissioner, the appellants are providing support services to the institutions who are engaged in providing education service. This being so, it cannot be held that the appellants have a joint venture with the institutions and are providing the services of a Commercial Training and Coaching Center. Understandably, the institutions referred are not preparing the students for any examination conducted by any other university or authority. The institutions design their own courses and use their own pedagogy and conduct the courses. The role of the appellants is limited to providing the necessary infrastructure and to help the institutions in marketing the courses - there is a contradiction in the findings of the learned Commissioner. It is not the case of the Department that the courses conducted by the institutions do not result in award of a recognized degree/ diploma. Therefore, the appellants are not providing services akin to that of Commercial Training and Coaching Centers. Therefore, the appellants can be held to be providing auxiliary or support services in relation to education. Thus, the services rendered by the appellants should necessarily fall under the exempted services.
The learned Commissioner (Appeals) clearly observed that the issue whether the appellants were providing services under Commercial Training and Coaching Centers was not the subject matter of the appeal as neither the appellants nor the adjudicating authority have raised the issue and the impugned order therein has rejected the refund claim of the appellant on the grounds that the appellants have not borne the incidence of tax in terms of Section 11D. On going through the Order-in-Original dated 19.04.2006, it is found that the original authority has rejected the refund claim filed by the appellants mainly on the ground of unjust enrichment.
Conclusion - It is established that providing infrastructure and support services to educational institutions does not constitute a commercial training and coaching center liable for service tax.
Appeal allowed.
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2025 (1) TMI 1322
Valuation of service tax - Inclusion of waiver from payment of telephone charges, given by the appellants to their employees, referred to as CFA is to be included for the purpose of calculating the service tax payable by the appellants - HELD THAT:- The telephone service providers are required to pay service tax on the consideration received by them, the consideration being the gross amount charged; in this case, the gross amount charged by the appellant is the amount they collected from their employees and not the discount given to the employees in the form of CFA.
The appellants relies on a number of cases, including that of M/S BHAYANA BUILDERS (P) LTD. & OTHERS VERSUS CST, DELHI & OTHERS. [2013 (9) TMI 294 - CESTAT NEW DELHI-LB] wherein the principle of law was settled to state that the value of goods or material supplied free of cost would not be included in the gross amount charged under Section 67. This particular submission is not relevant to the facts of the case as there is no goods or material supplied free of cost by the service receivers to the service provider i.e the appellant. What is to be seen in the present case is whether the discount or free allowance extended by the appellants to their employees is includable in the assessable value. In the scheme of the service tax taxation, includability of any amount in the gross amount charged for service requires to be the consideration flowing from the service receiver to the service provider.
In the instant case, it is the service recipient that is getting benefitted monetarily in the form of free allowance or discount and there is no flow of consideration from the service recipients to the service provider.
For the purpose of valuation of service tax, the goodwill cannot be taken into consideration. It is found that learned Commissioner did not arrive at the value of the goodwill for the purpose of taxation, even if goodwill is considered to be an additional consideration. It is incorrect to take the entire free allowance given to the employees as monetary value of goodwill.
Conclusion - (i) Service tax cannot be levied when there is no consideration received. Free allowance given to the employees by the appellant is in the nature of discount/ concession and as the same has not accrued to the service provider-appellant, the same cannot form part of the consideration for the purpose of levy of service tax. (ii) Under the facts and circumstances of the case, Department has not made out any strong argument in favour of best judgment method. (iii) Computation of service tax cannot be on the basis of assumptions and presumptions. (iv) The Show Cause Notice is vague and does not specify the service which is rendered by the appellant; moreover, the benefit of discounts/ free allowance is accruing to the employees rather than the appellant who is the service provider. Consideration flowing towards the service recipient cannot be included for the purpose of taxing the service provided by the appellant.
Appeal allowed.
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2025 (1) TMI 1321
Levy of service tax - Erection, Commissioning and Installation service - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- Though the appellant contends that it had made submissions verbally/orally in response to the letter, however, it is not proposed to accept the same for want of any supporting evidence. But in any case, the fact remains that the above intimation was followed by reminders of various dates and hence, there is no dispute as to the starting point, which is 21.02.2007. The Show Cause Notice issued on 22.10.2012 is undoubtedly beyond the normal period, rather extending the larger period of limitation and hence, it was incumbent on the Revenue to prove that the appellant had suppressed facts with an intent to evade payment of tax. From a reading of SCN, the allegation against the appellant is that there was no voluntary compliance on its part despite several reminders and that the non-payment of service tax would have gone un-noticed but for the detection at the time of conducting audit by the departmental officers.
Conclusion - The allegations ipso facto would not suffice the invoking of larger period of limitation and nor would the same in anyway amounts to suppression or fraud or even misstatement and hence, the demand of service tax by invoking the extended period of limitation itself stands disproved.
Appeal allowed.
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2025 (1) TMI 1320
Recovery of service tax with interest and penalty - Insurance Commission - Finance Payouts - Incentive received from MUL - Handling & Logistic Charges - Repairing, reconditioning, restoration service - Reimbursement of Expenses from MUL - Reverse Charge Mechanism on entire expenses appearing in the audited Profit & Loss Account - violation of principles of natural justice - HELD THAT:- In the case of M/S ANAND MOTERS AGENCIES LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, LUCKNOW [2024 (12) TMI 1524 - CESTAT ALLAHABAD] it is considered the Hon’ble High Court in remanding the matter, and the present appeal have to be considered in terms of the order passed in that appeal.
Since demands in this response have been admitted and paid by the Appellant the Tribunal should have in the first stage itself confirmed the demand and appropriated the said demand against the confirmed demand which has not been done in the earlier round which we do now in the remand proceeding as per the directions of the Hon’ble High Court.
As the amount due have been paid even prior to the issuance of Show Cause Notice, the penalties could not have been imposed in respect of these demands which are confirmed as per para 4.5. Thus it is not required to interfere with the earlier order, to the extent of setting aside the entire penalties as on all other demand, the earlier order of this Bench in these appeals setting aside the demand and penalties, agreed upon.
Conclusion - The amount due have been paid even prior to the issuance of Show Cause Notice, the penalties could not have been imposed in respect of these demands.
Appeal disposed off.
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2025 (1) TMI 1263
Challenge to action of the designated committee formed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) by issuing Form No. SVLDRS-3 dated 04.12.2019 - petitioner's case falls under the "arrears" category or the "litigation" category under SVLDRS - recovery of service tax with interest - non-payment of service tax under ‘Construction Service in respect of Commercial and Industrial Building and Civil Structure’ during the period from April 2014 to June 2017.
HELD THAT:- Considering the provisions of the SVLDRS, it is apparent and crystal clear that the case of the petitioner would fall in the category of “amount in arrears” as admittedly the petitioner has not preferred any appeal before 30.06.2019 challenging the Order-in-original and the demand raised in the Order-in-original amounting to Rs. 32,27,856/-has achieved finality so far as the petitioner is concerned and accordingly, the petitioner would be entitled to the benefit of the SVLDRS which has a basic feature of reducing the disputes and create an atmosphere of trust between the assessee and the respondent-department.
However, in the facts of the case it appears that, the designated committee, contrary to the provision of the SVLDRS and with total non-application of mind has issued Form SVLDRS-2 and without taking into consideration reply of the petitioner 29.11.2019 has issued Form SVLDRS-3 in a mechanical manner. The petitioner has been vigilant to challenge such SVLDRS-3 immediately by preferring this petition and this Court has directed the petitioner to deposit 60% of the tax arrears amounting to Rs. 31,32,551.60 which petitioner has already deposited.
Therefore, in the facts of the case, when there was no appeal pending filed by the petitioner, the amount of demand raised in the Order-in-original would become the tax dues being the amount in arrears as per clause (e) of section 123 of SVLDRS and accordingly, the petitioner is entitled to get the benefit of the provision of section 124 of the SVLDRS by paying 60% of the amount in arrears as tax dues which the petitioner has already deposited.
Conclusion - i) The petitioner's case is categorized under "amount in arrears" as per Section 121(c) and Section 123(e) of the SVLDRS. ii) The petitioner is entitled to the relief of paying 60% of the tax dues, having already deposited the amount. iii) The designated committee's issuance of Form SVLDRS-3 demanding a higher amount was incorrect and is set aside.
Petition allowed.
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2025 (1) TMI 1262
Levy of service tax - Business Support Service - cost sharing among the group Companies - Demand of service tax on the differential value of Profit & Loss Account and ST-3 returns - Recovery of ineligible CENVAT Credit - Extended period of limitation.
Levy of service tax - Business Support Service - cost sharing among the group Companies - HELD THAT:- The appellant incurred expenditure on behalf of the group companies and such expenditure has been shared among the group Companies at the ratio agreed in the agreement dated 01-04-2008. It is observed that there is no service element involved in this case. Thus, we find that in these circumstances, the demand of service tax under the category of 'Business Support Service' is not sustainable. We find that the issue is no more res integra as the demand of Service Tax on cost sharing is settled by the decision of the Hon’ble Supreme Court in M/S GUJARAT STATE FERTILIZERS & CHEMICALS LTD. & ANOTHER VERSUS COMMISSIONER OF CENTRAL EXCISE [2016 (12) TMI 103 - SUPREME COURT], wherein, it has been held that demand of Service Tax on cost sharing is not sustainable - the demand confirmed in the impugned order under the category of 'Business Support Service' is not sustainable.
Demand of service tax on the differential value of Profit & Loss Account and ST-3 returns - HELD THAT:- The ld. adjudicating authority has not given any finding regarding the liability of service tax on the differential value. It is the settled position of law that demand of Service Tax cannot be confirmed merely on the ground that there is a difference in the value of Profit & Loss Account and ST-3 returns. This issue is covered by the decision of Tribunal, Kolkata in the case of M/S BALAJEE MACHINERY VERSUS COMMISSIONER OF CGST & EXCISE, PATNA II [2022 (8) TMI 704 - CESTAT KOLKATA] where it was held that 'Since the records have been duly audited, the demand cannot be raised for the same period on account of change in the opinion. Further, we find that the Appellant had duly submitted the VAT Returns which have been recorded by the Ld. Commissioner in the impugned order.' - the demand of service tax of Rs.88,051/-, confirmed merely on the basis of the differential value between the Profit & Loss Account and ST-3 returns is not sustainable.
Recovery of ineligible CENVAT Credit - Extended period of limitation - HELD THAT:- There is no allegation of suppression, wilful misstatement or fraud in the impugned notice. In the impugned order also, the ld. adjudicating authority has not given any finding regarding suppression of facts or wilful misstatement for invocation of the larger period of limitation. Thus, the demand confirmed by invoking the extended period of limitation is not sustainable - the demand of irregular credit confirmed in the impugned order is not sustainable.
Conclusion - i) Service Tax cannot be levied on cost-sharing arrangements lacking a service element. ii) Demand confirmed merely on the basis of the differential value between the Profit & Loss Account and ST-3 returns is not sustainable. iii) As entire demand is time barred, the demand of irregular credit confirmed in the impugned order is not sustainable.
The impugned order set aside - appeal allowed.
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2025 (1) TMI 1261
Entitlement to interest on the refund of Rs.12,00,00,000/- from the date of deposit until the date of refund - Rate at which the interest is to be computed - Adjustment of the amount Rs.64,73,631/- from the total refund sanctioned to the appellant.
Entitlement of interest on the amount of Rs.12,00,00,000/- from the date of deposit till the date of refund - HELD THAT:- This issue is no more res integra as the same has been decided by the Hon’ble Apex Court in the case of Sandvik Asia Limited vs. Commissioner of Income Tax [2006 (1) TMI 55 - SUPREME COURT], which has been followed by the jurisdictional High Court of Punjab & Haryana in the case of COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS RIBA TEXTILES LTD. [2022 (5) TMI 1531 - PUNJAB AND HARYANA HIGH COURT], wherein the Hon'ble High Court has upheld the order of the Tribunal granting interest on refund to the assessee computable from the date of payment till the date of refund @12% per annum. It is pertinent to note that the review application filed by the Revenue against this judgment has also been rejected by the Hon'ble Punjab & Haryana High Court - the Hon'ble Punjab & Haryana High Court in the case of Sunrise Immigration Consultants Private Limited vs. Union of India [2023 (4) TMI 504 - CESTAT CHANDIGARH], after relying upon the decision in the case of Riba Textiles Limited, has re-affirmed that the petitioner was entitled to refund of the amount deposited during investigation along with interest @12% computable from the date of deposit of the amount till the date of refund.
Rate at which the interest is to be computed - HELD THAT:- The Tribunal as well as various Courts in catena of decisions have consistently held that interest is payable from the date of deposit till the date of refund @12% per annum. In this regard, we may refer to the decision of the Tribunal in the case of Indore Treasure Market City Pvt. Ltd. [2024 (5) TMI 367 - MADHYA PRADESH HIGH COURT] wherein the Tribunal after considering the various decisions of the Courts, has held that the assessee is entitled for interest on the amount of refund sanctioned @12% to be calculated from the date of payment till the date of disbursement - the appellant is entitled to receive interest on the amount deposited during investigation from the date of deposit of the amount till the date of its refund at the rate of 12% per annum.
Adjustment of the amount Rs.64,73,631/- from the total refund sanctioned to the appellant - HELD THAT:- The Adjudicating Authority has committed an error because the said demand was not confirmed by the Appellate Authority rather the said demand was set aside by the Appellate Authority in the case of Bharti Infratel Ltd. [2022 (9) TMI 1339 - CESTAT NEW DELHI]. It is also found that in the case of Kisan Irrigations & Infrastructure Ltd. [2016 (7) TMI 429 - CESTAT NEW DELHI], the Tribunal has held that adjustment of refund against a confirmed demand during the pendency of an appeal amounts to coercive recovery and is not permissible under the law. Further, adjustment of demand confirmed by the Bharti OIO against the refund due to the appellant could not have been made prior to the Bharti OIO attaining finality. Further, the demand confirmed against Bharti Infratel Ltd was subsequently dropped vide Bharti OIA dated 13.03.2023; copy of the same has also been placed in the appeal paper-book - the amount adjusted from the total refund sanctioned to the appellant is refundable to the appellant at the rate of 12% per annum computed from the date of deposit till the date of its refund.
Conclusion - i) The appellant is entitled to interest on the full refund amount from the date of deposit until the date of refund at a rate of 12% per annum. ii) The amount adjusted from the total refund sanctioned to the appellant is refundable to the appellant at the rate of 12% per annum computed from the date of deposit till the date of its refund.
Appeal allowed.
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2025 (1) TMI 1260
Levy of service tax on the appellant, Velur Town Panchayat - Renting of Immovable Property service - exemption of service tax for performing sovereign functions - local authority - extended period of limitation - HELD THAT:- In similar circumstances, this Tribunal had in the Appellants own case for the previous period in M/S. VELUR TOWN PANCHAYAT VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, SALEM COMMISSIONERATE AND M/S. MOHANUR TOWN PANCHAYAT VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, SALEM COMMISSIONERATE [2024 (6) TMI 1182 - CESTAT CHENNAI] had remanded the matter to the Adjudicating Authority by taking note of the judgement passed by the jurisdictional High Court in the case of CUDDALORE MUNICIPALITY VERSUS THE JOINT COMMISSIONER OF GST & CENTRAL EXCISE, THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX AND VIRUDHACHALAM MUNICIPALITY VERSUS THE ASSISTANT COMMISSIONER, OFFICE OF THE ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, CUDDALORE [2021 (4) TMI 500 - MADRAS HIGH COURT], and the subsequent decision in the case of ST. THOMAS MOUNT CUM PALLAVARAM CANTONMENT BOARD VERSUS ADDITIONAL COMMISSIONER, COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI [2023 (4) TMI 1024 - MADRAS HIGH COURT].
Conclusion - It is required to take a detailed examination of whether the services in question fall within the scope of sovereign functions.
Appeal allowed by way of remand.
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2025 (1) TMI 1259
Refund of service tax paid on Government work during the period from April 2015 to December 2015 - time limitation - rejection of refund for the reason that it had been filed beyond the period of six months prescribed under section 102 of the Finance Act - HELD THAT:- Once the time limit of six months has been provided, it cannot be contended that merely because the character of the tax deposit would continue to be in the nature of the tax collected without authority of law and, therefore, no limitation can be prescribed for filing the refund application. The learned Member failed to take into consideration the terms of sub-section (3) of the section 102 while arriving at such a conclusion.
The appellant also placed reliance of the judgment of the Karnataka High Court in KVR Construction [2012 (7) TMI 22 - KARNATAKA HIGH COURT]. The provisions of the section 102 of the Finance Act were not under consideration in this judgment. All that was considered was if service tax has been paid under a mistake, then the time limit provided under section 11B of the Central Excise Act would not be applicable.
Conclusion - The statutory time limits must be adhered to, and neither the Tribunal nor the revenue authorities have the power to extend or ignore such limits. The refund claim was rightly rejected as time-barred.
Appeal dismissed.
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