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Service Tax - Case Laws
Showing 301 to 320 of 30972 Records
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2025 (1) TMI 1258
Levy of service tax - services provided by the Asansol Durgapur Development Authority (ADDA), a government agency - the agency was performing statutory functions - quantification of the service tax demand - time limitation.
HELD THAT:- The ADDA has been created under a specific statute and it performs all acts on behalf of the State Govt of West Bengal. Their accounts, income and expenditure etc. are all controlled by and are answerable to the State Government. Therefore, there are no hesitation to come to a conclusion that ADDA is performing sovereign functions on behalf of the State Government of West Bengal.
The Bangalore Bench of CESTAT in the case of Karnataka Industrial Areas Development Board v. CCT, Bangalore (North), [2020 (6) TMI 227 - CESTAT, BANGALORE], the coordinate Bench of Bangalore has held that 'the appellant is a statutory body discharging the statutory function as per the statute KIAD Act, 1966 and hence are not liable to pay service tax in view of the ratios of the various decisions cited supra.'
Thus, the assessee would be exempted from payment of Service Tax when they are performing sovereign functions. But it is also required to check if all the considerations received by ADDA would be in the course of sovereign function alone are if some of the services are commercial in nature.
In the present case, though it stands established that ADDA is a statutorily created body, also recognized as such by ITAT for Income Tax purposes, and is seen to be performing some sovereign functions like collecting licensing fee and other fee on account the land development [which is required to be verified], the other services provided by them like that of Renting of Immovable property, Renting of Advertisement space, Leasing of Tangible goods like road roller are not eligible for Service Tax exemption - ADDA would be required to pay the Service Tax, since these services are not in any way on account of performing of any sovereign function.
Quantification of the service tax demand - HELD THAT:- The Licensing Fee, Land Development fee would be in the nature of compulsory fee / mandatory fee, being collected as part of sovereign function and hence would be exempted. But no bifurcation has been carried out in the Annexure B to SCN, wherein the quantification is done.
In respect of 2009-10, 2010-11 and 2011-12, even the above perfunctory work has not been undertaken. Simply the value shown in the Balance Sheet / Bank Statement have been taken to quantify the demand. Therefore, there are considerable force in the argument of the appellant that quantification of demand is neither scientific nor is properly backed by any concrete documentary evidence - there are no hesitation in holding that Service Tax demand for the 2009-10, 2010-11 and 2011-12 cannot be legally be sustained - the quantification adopted by the Revenue while issuing the SCN, even the confirmed demand of Rs. 2,95,48,401/- cannot be legally sustained.
Time limitation - HELD THAT:- The ADDA a body created by statute and is undertaking various functions assigned to them by the State Govt. and is also rendering various taxable services. But it is an admitted fact that all their income and expenditure are subject to the control of the State Govt. Hence, it would be difficult to adduce any ulterior motive to ADDA to the effect that they have suppressed the facts with an intent to evade the Service Tax payment. It is also seen that the figures taken for quantification of demand have been derived the Income and Expenditure statement and Balance Sheet of ADDA, which shows that all the details have been disclosed in the records. Further, their reliance on ITAT order, and vehement argument about their being statutory body carrying out sovereign functions, shows that they may have carried bona fide belief that they are not required to the Service Tax. Hence, the SCN issued on 12.10.2012 for the 2007-2008 to 2011-12 is partly time barred. Accordingly, the confirmed duty for the extended period is legally not sustainable.
Conclusion - i) ADDA is performing sovereign functions on behalf of the State Government of West Bengal. ii) The quantification of demand is neither scientific nor is properly backed by any concrete documentary evidence. iii) The proceedings were partly time-barred.
Appeal filed by the appellant [ADDA] is allowed fully on merits. The Appeal filed by the appellant [ADDA] is allowed on time bar in respect of the confirmed demand for the extended period.
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2025 (1) TMI 1213
Classification of services - Works Contract Service or not - service of construction, installation & maintenance of petrol bunks owned by M/s. HPCL and M/s BPCL - recovery of tax not paid/levied u/s 73 (1) of the Finance Act, 1994 - levy of penalty under Sections 76, 77 and 78 of the Finance Act, 1994.
HELD THAT:- A perusal at the order is indicative of an unequivocal fact that after issuance of the SCN, the petitioner has paid the entire amount of Service Tax including the penalty, long before the issuance of SCN in the year 2009 itself. The SCN comes to be issued in the year 2013. The proceedings are instituted after the receipt of the entire amount of arrears and default Service Tax and penalty on the score that the entire penalty or interest is not paid by the petitioner. The order quoted captures the fact that the amount of Rs.3,19,129/- is also appropriated by the authority during the investigation towards the demand. Therefore, there is nothing today to be paid by the petitioner as long before the SCN, an amount of Rs.20,64,849/- had been paid which is recorded by the authority. The order also records that it was the payment of service tax and interest that was paid by the petitioner and later on account of the proceedings, an amount of Rs.3,19,129/- is also appropriated.
The proceedings have gone on only to the satisfaction of the respondents – Department as there was nothing to be paid or recovered from the hands of the petitioner. The proceedings itself were redundant insofar as the principal amount was concerned and the interest is also paid by the petitioner or appropriated by the department from the petitioner. Reference being made to the judgment rendered by the Division Bench of this Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT], in the circumstance becomes opposite and the Division Bench interpreting Sections 73 and 76 of the Finance Act, 1994 has held that 'The assessee has paid both the service tax and interest for delayed payments before issue of show cause notice under the Act. Sub-sec. (3) of Section 73 of the Finance Act, 1994 categorically states, after the payment of service tax and interest is made and the said information is furnished to the authorities, then the authorities shall not serve any notice under sub-sec. (1) in respect of the amount so paid. Therefore, authorities have no authority to initiate proceedings for recovery of penalty under Sec. 76 of the Act.'
Conclusion - i) The classification of the petitioner's services under 'Works Contract Service' confirmed. ii) The impugned orders and notices quashed, acknowledging that the petitioner had settled all dues prior to the show cause notice, rendering further proceedings redundant.
Petition allowed.
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2025 (1) TMI 1212
Eligibility for a rebate on the provision of investment advisory services classified under banking and other financial services as per Section 65(105)(zm) of the Finance Act, 1994 - rebate under N/N. 11/2005-ST dated 19.04.2005 - HELD THAT:- It is noted that sub-rule (2) of Rule 3 of Export of Services Rules has laid down a condition that unless a payment is received in convertible foreign exchange, the service is not treated as export. Further, there is one more condition of provision of export of service and that is specified for various services in various clauses of sub-rule (1) of Rule 3 ibid. For the service provided by the appellant which is classifiable under Section 65(105)(zm), clause (c) of clause (iii) of sub-rule (1) of Rule 3 of Export of Services Rules, 2005 is applicable and according to the said provision, the export of taxable service is on provision of such service to a recipient located outside India. In the present case the invoice is raised on 29.06.2012 which is the date prior to the date on which Notification No. 11/2005-ST was rescinded.
The order passed by the original authority allowing refund was in accordance with law - Appeal allowed.
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2025 (1) TMI 1211
CENVAT Credit - input services used for providing assistance in trading of the goods - applicability of provisions of sub-rule (7) of Rule 4 of Cenvat Credit Rules, 2004 - SCN issued without allocation of mind - extended period of limitation - penalties.
Extended period of limitation - HELD THAT:- The original authority nor the show cause notice indicates as to which information was required by Revenue in accordance with which provision of law that was not filed or submitted by the appellant and how there was wilful misstatement or suppression of fact to invoke extended period of limitation. In the absence of any such finding by the original authority, the present proceedings are hit by limitation and that ground alone is enough for setting aside the impugned order.
Disallowance of CENVAT Credit on the ground that cenvat credit was not admissible since the appellant was engaged in trading of the goods - HELD THAT:- There is no finding that the appellant has not received the input services on the basis of which the appellant has taken the cenvat credit nor there is any finding that the said input services did not suffer service tax. Therefore the appellant had received input services from various input service providers. The provisions of Cenvat Credit Rules do not have any provision wherein the cenvat credit availed lapses. There is no examination as to how the said input services were not eligible for providing output services such as colocation services, hosting services etc. Therefore, the finding of the original authority that cenvat credit of Rs.634.05 crores were not admissible to the appellant has no basis and, therefore, the said finding is set aside.
The appellant had received input services from various input service providers. The provisions of Cenvat Credit Rules do not have any provision wherein the cenvat credit availed lapses. There is no examination as to how the said input services were not eligible for providing output services such as colocation services, hosting services etc. Therefore, the finding of the original authority that cenvat credit of Rs.634.05 crores were not admissible to the appellant has no basis and, therefore, the said finding is set aside.
Demand on the advances received from customers - HELD THAT:- It is noted that by the time the show cause notice was issued, on 04.04.2017 the said amount was paid back. Therefore, it was not available with the appellant as advances from customers as on the date of issue of show cause notice. Therefore, the demand on account of the same amounting to Rs.78.08 crores confirmed by the original authority does not sustain.
Demand of service tax of Rs.583.26 crores under proviso to sub-section (1) of Section 73 of Finance Act, 1994 - HELD THAT:- The issue of valuation and taxability both are involved in the present issue. As can be seen from the record, the current liability which stood as on 31.03.2018 was Rs.3888.40 crores. The operation of Chapter V of Finance Act, 1994 which included charging section for charging of service tax and Section 67 for determination of value for assessment of service tax ceased to exist prospectively with effect from 01.07.2017. Therefore, both the provisions, viz. charging section i.e. Section 66B and Section 67 on valuation of taxable services for charging service tax were not operational for levy and collection of service tax as on 31.03.2018 and, therefore, confirmation of demand of Rs.583.26 is not sustainable.
Recovery of interest on payment of service tax - HELD THAT:- On the basis of Rule 3 of Point of Taxation Rules which provides that point of taxation shall be the date of invoice or the date of payment whichever is earlier, the original authority has ordered for recovery of interest on payment of service tax of Rs.52.45 crores which was paid during the year 2016-17. An adjustment was made in balance of unsecured loans amount availed from M/s. Reliance Infocom Engineering Pvt. Ltd. for receipt of payment in respect of the invoices raised for provision of servie and the said loan was received by the appellant in 2014 and, therefore, learned original authority ordered for recovery of interest from the earlier period - the provisions of Rule 3 of Point of Taxation Rules are not applicable in the present case. Therefore, the order by the original authority for recovery of interest on payment of service tax of Rs.52.45 crores does not sustain.
Interest and penalties - HELD THAT:- Since no part of the order-in-original either disallowing cenvat credit or confirming the demand of service tax sustains the order for recovery of interest on the same and imposition of penalties does not sustain.
Conclusion - CENVAT credit cannot be denied without substantial evidence of misuse or non-compliance with the Cenvat Credit Rules. The advances incorrectly classified due to accounting errors, and subsequently rectified, do not attract service tax Demand of interest and penalties do not sustain. The present proceedings are hit by limitation and that ground alone is enough for setting aside the impugned order.
Appeal allowed.
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2025 (1) TMI 1210
CENVAT Credit - input services - gardening services - excess availment of Cenvat credit on capital goods, in violation of the Cenvat Credit Rules - discrepancies between the credit register and ST-3 returns - availment of credit without any supporting document in violation of Rule 9(5) of the CCR - short-paid Education Cess and Secondary & Higher Education Cess by cross-utilizing available credit - interest on late payment of service tax for September 2011 - Short payment of Service tax during the period from April 2012 to June 2012 - Non-payment of amount under Rule 6(3) of the Credit Rules related to exempted village panchayat telephones - Non-payment of amount under Rule 3(5A)(b) of the Credit Rules on sale of capital goods as scrap - Non-payment of interest due to date of tax liability as per the POT Rules - extended period of limitation.
CENVAT Credit on the basis of the difference noticed in the ST-3 returns and the Cenvat Credit Register - HELD THAT:- The difference between the amount of Cenvat credit availed as reflected in the Cenvat Credit Register than the one recorded in the ST-3 returns is an admitted fact, however, the contention of appellant is that the Cenvat Credit Register shows that 100% credit was taken by the appellant during the period in dispute in their credit register but only 50% thereof as has been utilized is reflected in their ST-3 returns. The difference is due to the balance 50% of the amount which was not utilized and therefore was not shown in the ST-3 returns - The perusal makes it clear abundantly that it was the statutory mandate on the appellant-assessee to utilize only 50% of the Cenvat credit availed on the capital goods. The department has not produced any evidence to falsify the same.
In the case of J.K. TYRE & INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE [2016 (11) TMI 911 - CESTAT BANGALORE - LB], Tribunal Large Bench has come to the conclusion that interest liability would not arise when the assessee had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty.
The noticed difference was statutorily permissible and has been denied to be ground for raising the demand of reversal. The unutilized credit has clearly been held as good as the non availed Cenvat credit. In the light of this discussion, there are no justification when the demand is confirmed based on the noticed difference in ST-3 returns than to the credit register. The demand of excess Cenvat credit of Rs.1,79,11,286/- is therefore set aside.
CENVAT credit - Input services including the security services are not the eligible input services - availment of Cenvat credit on the input services has been denied for the reason that there is no mention of supply of any security services on the invoices based whereupon the Cenvat credit has been availed and no evidence about supply of skilled manpower - HELD THAT:- The difference of supply of unskilled and skilled labour has wrongly been created by the adjudicating authority below as the same is not relevant to decided as to whether the service provided shall qualify for input service or not. It appears to be an admitted fact that manpower was supplied by the service provider to M/s. BSNL for being deployed at various offices of BSNL/appellant. The work power irrespective skilled or unskilled was meant to facilitate M/s. BSNL to render their output telephonic services. The service provided is eligible input service. Hence, denial of availment of Cenvat credit on the eligible input services is wrong. The findings in the order under challenge are liable to be set aside to this extent as well. The demand of Cenvat credit amounting to Rs.59,94,339/- is therefore set aside.
Cenvat credit availed on capital goods was required to be reversed in terms of Rule 3(5A) of Cevat Credit Rules, 2004 - HELD THAT:- The Rule 3(5A) cannot apply in a situation where Cenvat credit has not been availed on capital goods. In the present case, the appellant’s plea is that the scrap material in question pertains to those capital goods on which the appellant had not availed the Cenvat credit, as majority of those capital goods were purchased prior to 2004 i.e. prior the enactment of Cenvat Credit Rules. The details of those capital goods were duly been provided by the appellants. The onus was of the department to prove that the appellant has availed the Cenvat credit on the capital goods which later got cleared as scrap but there is no such evidence produce. Hence, there is no rebuttal to the said contention of the appellant - The sale of capital goods as waste in the impugned show cause notice is with respect to those capital goods on which the appellant had not availed the Cenvat credit. The confirmation of demand is therefore not sustainable.
Extended period of limitation - HELD THAT:- The appellant had been regularly filing its ST-3 returns and its records were being regularly audited by the department. Thus, the entire material was already to the notice of the department. In such circumstances, the appellant cannot be held accountable for not disclosing the activity of making provision made by it, specifically, when the same was not required in the law. It is held that suppression of facts has wrongly been alleged against the appellant - This Tribunal in the case of INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD [2013 (9) TMI 310 - CESTAT AHMEDABAD] held that PSU cannot have mala fide intentions for non-disharge of duty and there cannot be an allegations of intention to evade duty. Hon’ble High Court of Punjab & Haryana in the case of COMMISSIONER VERSUS MARKFED REFINED OIL & ALLIED INDUS [2009 (7) TMI 1204 - PUNJAB AND HARYANA HIGH COURT] held that once the assessee is government organization, it is not easy to infer any evasion of duty much less its intention to do so - The suppression of facts was wrongly alleged, and the extended period for issuing the show cause notice was unjustified.
Conclusion - i) There are no justification when the demand is confirmed based on the noticed difference in ST-3 returns than to the credit register. The demand of excess Cenvat credit of Rs.1,79,11,286/- is therefore set aside. ii) The work power irrespective skilled or unskilled was meant to facilitate M/s. BSNL to render their output telephonic services. The service provided is eligible input service. Hence, denial of availment of Cenvat credit on the eligible input services is wrong. The findings in the order under challenge are liable to be set aside to this extent as well. iii) The sale of capital goods as waste in the impugned show cause notice is with respect to those capital goods on which the appellant had not availed the Cenvat credit. The confirmation of demand is therefore not sustainable. iv) The suppression of facts was wrongly alleged, and the extended period for issuing the show cause notice was unjustified.
Appeal allowed.
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2025 (1) TMI 1209
Recovery of wrongly taken/availed Cenvat credit of Input Services - typographical error in the AG Audit report/SCN vis-à-vis. the challan numbers - HELD THAT:- It is a settled law that the Cenvat credit scheme is a beneficial scheme for the taxpayers and the benefit of this scheme cannot be blocked or taken away from the taxpayers on technical and procedural grounds. The appellate authority failed to appreciate that both Service Tax Payable Registers and Service Tax Credit Registers were signed by authorized representative at the end of each month where summary of the transactions of the month was prepared and tabulated at the month end. It appears that the appellate authority has overlooked the signatures in both the registers in discarding these registers as merely a piece of paper. The objection of the appellate authority that the registers were maintained manually is without any basis. He failed to appreciate that the Government has not mandated that records of Service Tax Payable Register and Service Tax Credit Register should be maintained by the taxpayer or on other electronic device. These records are being maintained by the appellant since beginning and no objection was raised by the Department or by the Audit Team. Hence the objection of the appellate authority to the effect that the registers are maintained manually by the appellant is without any valid basis and the same is not sustainable in the eyes of law.
Disallowance of credit for want of the correct challan - HELD THAT:- The challan number in show cause notice (28067) is nothing but a typographical error. Substantial benefit which is otherwise available to the appellant cannot be denied merely on the basis of the typographical error that too, committed at the end of the department. Similar error has been committed with respect to challan filed with Entry No. 1669 dated 06.07.2017. Only one challan admittedly pertains to the said entry. Appellant has claimed it to be the Challan bearing No. 29935 dated 06.07.2017. For the same reason as above mentioning of 29936 as challan number is held to be nothing but a typographical error.
Conclusion - The procedural or technical errors, such as typographical mistakes, should not hinder the entitlement to Cenvat credit, especially when the appellant provides substantial evidence to support their claim - credit remains allowed.
Appeal allowed.
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2025 (1) TMI 1208
Applicability of Service Tax on the markup charged by the appellant, M/s Balaji Integrated Shipping India Pvt Ltd., on ocean freight services provided to their clients - HELD THAT:- Reliance placed on BIZSOLINDIA SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE - III [2016 (5) TMI 134 - CESTAT MUMBAI], wherein the Tribunal considered that since the appellant has been charging more than the expenditure incurred by him as pure agent, while billing the client, he was liable to Service Tax. This reliance by the Commissioner (Appeals) in the impugned order is misplaced, inasmuch as the issue here is that the appellants were trading in space, whereby, they were buying in bulk and then selling to different clients in due course as per their requirement. While selling, they were charging more than what they have paid to the shipping lines, etc. The appellant never said that they are acting as pure agent for this charge. In so far as the markups are concerned, admittedly there is no separate Service Tax liability on the ocean freight, which has been considered as not chargeable to Service Tax. The markup in respect of the activity, which is not chargeable to Service Tax cannot be fastened to some other activities without having clear evidence that there was some service provided by them in integrated manner.
Therefore, the profit earned on account of trading in space cannot be added to the gross value of other services without bringing sufficient evidence to support that this was a ploy adopted by the appellant to charge towards the CFS charges by suppressing the actual value of CFS. No such specific charges have been made out in the SCN.
Conclusion - The markup on ocean freight constitutes a trading profit, not a service charge, and thus is not subject to Service Tax.
Appeal allowed.
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2025 (1) TMI 1207
Liability of appellant, a property developer, to pay service tax on the amounts received as consideration from Customers towards rendering the said service - Construction of Residential Complex Service - period from April 2009 to June 2010 - levy of penalty.
Whether the Appellant is liable to pay service tax under the construction of residential complex service? - HELD THAT:- The issue is no more res integra as this Tribunal had in respect of the same issue involving the Appellant, for earlier period from 16.06.2005 to 31.03.2009 [2019 (3) TMI 1389 - CESTAT CHENNAI] set aside the demand of service tax on construction of residential complex service.
It is also found that the actual service with regard to construction of flats was rendered by M/s. Golden Homes Pvt. Ltd., a contractor employed by the Appellant for rendering the service on a turnkey basis in terms of the Turnkey Project Contract, in terms of agreement dated 14.04.2004 entered by the Appellant with the said contractor. Therefore, any demand of service tax from the Appellant who is the promoter is not legally proper and sustainable in the eyes of law.
Levy of penalty - HELD THAT:- The penalty imposed is unjustified.
Conclusion - The appellant was not liable for service tax under the "Construction of Residential Complex Service" and that the penalty imposed was unjustified.
Appeal allowed.
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2025 (1) TMI 1206
Benefit of reduced service tax liability in terms of N/N. 30/2012-ST dated 20.03.2012 - appellant is a cooperative society - service tax on amounts received as reimbursements, such as salaries to guards, PF, and ESI - Invocation of Extended period of limitation.
The demand of service tax denying appellant the benefit of N/N. 30/2012 date 20.03.2012 - HELD THAT:- The table given in the notification, Para B thereof, the Entry No. 8 exempts the services provided by way of supply of manpower for any person to the extent of 75% which has to be paid by the service recipient. The appellant admittedly is a co-operative society registered under Rajasthan Co-operative Society Act, 2001. The copy of certificate of registration is also produced by the appellant. There is no evidence to the contrary by the department. In the light of above observations with respect to N/N. 30/2012, the appellant being a co-operative society was very much eligible for the abatement/exemption of 75% of the tax liability. The Order-in-Original has denied the said exemption holding the appellant is not the ‘Association of Person’. The said comparison is not required for the purpose of the impugned notification. It is an admitted fact that 25% of tax liability has been discharged by the appellant. In light of this discussion the confirmation of remaining 75% of the gross value as service tax from appellant is not sustainable.
The demand of service tax on the amount claimed to have been received as pure agent and reimbursable - HELD THAT:- The issue stands already decided by Hon’ble Supreme Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT]. In light of the said decision the demand on the amount received as pure agents or on the amount of reimbursement is also not sustainable. Order to that extent is also liable to be set aside.
Invocation of Extended period of limitation - HELD THAT:- The appellant was not liable to the tax as has been proposed by the impugned show cause notice and has been confirmed by the impugned order. Hence, the question of evasion of tax becomes redundant. Also no question arises with the appellant to have an intent to evade the same. Accordingly, the extended period has wrongly been invoked.
Conclusion - The cooperative societies are entitled to specific tax abatements under N/N. 30/2012-ST and that reimbursements do not constitute taxable service value. The extended period has wrongly been invoked.
Appeal allowed.
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2025 (1) TMI 1205
Classification of services - intermediary services or not - applicability of Rule 9 of Place of Provision of Service Rules, 2012 - denial of benefit of export of service - HELD THAT:- The arrangement between the Respondent and their overseas clients and Indian buyers of the goods are not in dispute. All the facts as stated clearly points out that there is only a by-party agreement with regards to the identification and introduction of prospective buyers for their foreign clients. There are no tripartite agreement.
Mumbai Bench has in case of IDEX INDIA PVT. LTD. VERSUS COMMISSIONER OF CGST, MUMBAI EAST [2023 (2) TMI 482 - CESTAT MUMBAI] has held that 'The supplier of main service may decide to outsource the supply of main service, either fully or partly, to one or more sub-contractors. Such sub-contractor provides the main supply, either fully or a part thereof and does not merely arrange or facilitate the main supply between the principal supplier and his customers and therefore clearly not an intermediary. Who is an 'intermediary' and what is ‘intermediary service’ has been clarified by Central Board of Indirect Taxes and Customs (C.B.I. & C.) vide Guidance Note dated 20-6-2012 and under GST regime also a clarification has been issued by C.B.I. & C. on 20-9-2021 both of which are in line with the discussions made hereinabove about ‘intermediary’. In view of the facts involved herein the appellant cannot be termed as an ‘intermediary.’'
In case of M/S. CUBE HIGHWAYS AND TRANSPORTATION ASSETS ADVISOR PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER CGST DIVISION & ORS. [2023 (8) TMI 980 - DELHI HIGH COURT], Hon’ble Delhi High Court observed that 'implicit in the concept of an ‘Intermediary’ that there are three parties, namely, the supplier of principal service; the recipient of the principal service and an intermediary facilitating or arranging the said supply. Where a party renders advisory or consultancy services on its own account and does not merely arrange it from another supplier or facilitate such supply, there are only two entities, namely, service provider and the service recipient. In such a case, rendering of consultancy services cannot be considered as ‘Intermediary Services’ or services as an ‘Intermediary’.'
Conclusion - An intermediary requires a tripartite arrangement, which was absent in this case. The Respondents provided services directly to their overseas clients, not facilitating a supply between two parties. The services provided on one's own account do not constitute intermediary services.
In absence of any such tripartite agreement there are no merits in the appeal filed by the Revenue - appeal dismissed.
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2025 (1) TMI 1204
Levy of service tax - discount/commission/incentives received from M/s. Vodafone Digilink by way of marketing, selling and distribution of Vodafone products - HELD THAT:- In Chote Lal Radhey Shyam [2015 (11) TMI 979 - CESTAT ALLAHABAD], a Division Bench of this Tribunal while examining this issue, held that 'in this case, BSNL had already paid service tax on the sim cards and recharge coupons sold to the franchisee and again demanding service tax from the franchisee would amount to double taxation which is not permissible in law. Secondly, we find that the appellant is only engaged in purchase and sale of sim cards and recharge coupons and his relationship with BSNL is of principal-to-principal basis. The appellant cannot be termed as an agent of BSNL.'
Conclusion - The appellant was not liable for service tax on the commissions or incentives received from Vodafone.
Appeal allowed.
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2025 (1) TMI 1151
Recovery of service tax along with applicable Cesses, interest and various penalties - classification of services - Management, Maintenance or Repair Service or not - activity of re-treading of used Tyres - applicability of Extended period of Limitation.
Classification of services - HELD THAT:- The appellant is using consumables which were purchased from sales tax registered dealers, which was claimed to have suffered sales tax. This fact has not been found to be false. There is a claim of the appellant on record for extending the benefit of Abatement in terms of N/N. 12/2003 – ST dated 20.06.2003, since the value of materials used and sold by the appellant were exempted from service tax - This is a case where works contract was involved and hence, the Tyre re-treading is a works contract and the goods used in execution of such contract is clearly liable only to sales tax.
Extended period of Limitation - period of dispute is from 2005-06 to 2008-09 for which the SCN was issued on 16.09.2010 by invoking the extended period of limitation - HELD THAT:- The Adjudicating Authority has dropped the demand for the year 2008-09 and hence, the scope of appeal is for the periods 2005-06 to 2007-08, in which event, invoking extended period of limitation stands unjustified. This is because, the AA has only negated the claim of abatement for want of proof/evidence, while accepting the same insofar as 2008-09 is concerned. It could have been different had the sales-tax return was considered requiring the production of supporting documents like the assessment thereon, etc. but in any case, the same cannot amount to suppression or fraud, to invoke the larger period of limitation. There is also no whisper about the acceptance or otherwise, of the sales-tax return by the State authority.
Conclusion - i) This is a case where works contract was involved and hence, the Tyre re-treading is a works contract and the goods used in execution of such contract is clearly liable only to sales tax, not service tax under MMR services. ii) The Revenue failed to justify the extended period of limitation, as there was no evidence of suppression or fraud by the appellant.
Appeal allowed on limitation.
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2025 (1) TMI 1150
Classification of services - Supply of Tangible Goods services - supply of trailers owned - appellant had not paid service tax due to the reason that their clients had paid the service tax in respect of their further supply/ activity - discharge of burden to prove.
Whether M/s Sudhir Road Lines are liable to pay Service Tax under ‘Supply of Tangible Goods’ Service for supplying their trailers to others for being used for Transportation of Goods and when Service Tax stands already paid by the transfree? - HELD THAT:- The effective control and possession with respect to trailers given by the appellant was not with the appellant. The appellant was getting paid a fixed price per trailer from the respective client. Resultantly, the impunged activity was that of giving trailers on ‘Hire’ instead of it being wrongly classified as ‘Supply of Tangible Goods’.
The service tax demand was proposed and has been confirmed based on the allegation that the trucks/trailers were not supplied to GTA. From the above discussion, it is clear that for activity of transfer of vehicles, the nature of transferee is not relevant neither for the activity to fall under ‘Supply of Tangible Goods Service’ not for the activity to be called as ‘Hire’. The relevant criteria for the distinction is whether the right to use is transferred with possession and effective control. In case it is so transferred, the activity will that be of hire else only it shall fall under service of ‘Supply of Tangible Goods’ - the moment the right to use goods is transferred, the activity gets covered under the concept of ‘deemed sale’ and gets out of the scope of service tax net.
In BUILDERS ASSOCIATION OF INDIA AND OTHERS VERSUS UNION OF INDIA AND OTHERS (AND CONNECTED WRIT PETITIONS AND APPEALS) [1989 (3) TMI 356 - SUPREME COURT], the validity of the Constitution (Forty-sixth Amendment) Act was upheld. But the Apex Court ruled that the States’ power to levy tax on the goods involved in a works contract is subject to the restrictions in Article 286.
As per the definition of Goods Transport Agency in Finance Act, 1994, the issuance of consignment note is mandatory criteria for holding any act of transportation to be an act of GTA. Resultantly, the findings arrived at by the adjudicating authorities below are erroneous on the face of the facts itself. The initial burden to prove the allegations was of the department which has not been discharged.
The issue of exemption under Entry No. 22(b) of the Notification No. 25/2012 has wrongly been raised that entry as well as the sub-clause of Section 66D (Negative List of the Finance Act) exempts the transportation of goods by road except it is done by a courier agency or a goods transport agency. The appellant admittedly is not a goods transport agency. His clients have been the GTAs who admittedly have discharged the service tax liability. Resultantly and in view of the above discussion about Article 366 (29A), the activity rendered by the appellant is held to be of transfer by way of hire/rent of his trucks to the others. Since same is out of scope of the service tax net, hence, the finding arrived at by the authorities below are incorrect.
Conclusion - i) The effective control and possession of the trailers were with the transferees, not the appellant. ii) The activity rendered by the appellant is held to be of transfer by way of hire/rent of his trucks to the others. iii) The registration of the appellant under the head Supply of Tangible Goods for use service was insufficient to prove the taxable nature of the activity. iv) The department failed to discharge its burden of proof regarding the retention of control by the appellant. v) The impunged activity was that of giving trailers on ‘Hire’ instead of it being wrongly classified as ‘Supply of Tangible Goods’.
Appeal allowed.
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2025 (1) TMI 1095
Levy of service tax - supply of food and beverages at their counters provided in the cinema halls - whether the supply of food and beverage in the cinema complex falls within the definition of ‘service’ and ‘declared service’ in terms of Section 65B(44) and Section 66 E of the Act? - it was held by CESTAT that 'no service tax can be charged on the sale of food stuff in the PVR complex to the viewers of the movie, the provisions of Service Tax (Determination of Value) Rules, 2006 will not be applicable.'
HELD THAT:- There are no good reason to interfere with the impugned order dated 30.11.2023 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi.
Appeal dismissed.
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2025 (1) TMI 1094
Eligibility for availment of CENVAT credit of tax paid on premium mandatorily required for functioning as banks under the supervision of Reserve Bank of India - HELD THAT:- The decision of the Larger Bench of the Tribunal in M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [2020 (6) TMI 278 - CESTAT BANGALORE - LB] had settled the issue of eligibility by holding that 'The insurance service provided by the Deposit Insurance Corporation to the banks is an “input service” and Cenvat credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering ‘output services’.'
Conclusion - The eligibility for CENVAT credit of tax paid on such premium is beyond any controversy.
Appeal allowed.
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2025 (1) TMI 1093
Levy of interest and penalty - short payment of service tax - time limitation - suppression of facts.
Levy of penalty u/s 78 of Finance Act, 1994 - HELD THAT:- From the record of the appeal that audit party pointed out short payment of service tax only on the basis of contracts entered with M/s. Gujarat Alkalies and Chemicals Limited and all the contracts/ work orders were available with them. The classification of the service in this case is also a subject matter of dispute, however, since the appellant has already deposited the payment of service tax, there are no reason to go into this issue. It is found that element which need to be present for invoking provisions of Section 78 are not present in this particular case and therefore, the impugned order-in-appeal as well as order-in-original are legally not sustainable in so far as invoking of Section 78 of the Finance Act, 1994 is concerned.
Demand of interest under Section 75 of FA - HELD THAT:- The demand of interest under Section 75 vide show cause notice dated 07.08.2014 on the payment made in 2011 and for the demand which pertains to 2005-06 to 2007-08 is much beyond the normal period of limitation and extended time proviso - Hon'ble Gujarat High Court decision in the case of GUJARAT NARMADA FERTILIZERS CO. LTD. VERSUS COMMR. OF C. EX., VADODARA [2010 (7) TMI 857 - CESTAT AHMEDABAD] has held that 'It is settled law that mis-declaration means not declaring something or making an incorrect declaration about something, which he is required to declare under the law and not declaring something which is not required to be declared under the law does not constitute mis-declaration.'
The impugned order-in-appeal is legally not sustainable - appeal allowed.
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2025 (1) TMI 1041
Levy of service tax - Support Services of Business or Commerce - receipt collected from the clients towards ocean freight - eligible documents under Rule 9 of Cenvat Credit Rules, 2004 or not - imposition of consolidated penalties under Section 76, 77 & 78 of the Act - extended period of limitation - it was held by CESTAT that the transactions in question were not liable to service tax and that procedural irregularities should not result in the denial of Cenvat credit.
HELD THAT:- There are no good ground and reason to interfere with the impugned judgment; hence, the present appeals are dismissed.
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2025 (1) TMI 1040
Taxability - services of construction of road by the appellant as a sub-contractor - construction and fixing of tiles in water reservoir by the appellant as a sub-contractor - service tax under reverse charge mechanism on the transportation service received from individual truck owners - interest - penalty.
Services of construction of road by the appellant as a sub-contractor - HELD THAT:- The submission of the appellant that service tax cannot be demanded for the pre-negative list period without classifying the service deserves to be accepted. In fact, the impugned order mentions the service tax as being demanded under construction services/ works contract services. The demand is vague and deserves to be set aside on this ground alone.
Construction and fixing of tiles in water reservoir by the appellant as a sub-contractor - HELD THAT:- There is nothing on record in the show cause notice or in the submissions made by the department to establish that these two services were rendered as services simpliciter. It has been held by the Supreme Court in Larsen & Toubro [2015 (8) TMI 749 - SUPREME COURT] that the charge of service tax under various heads of section 65 (105) other than section 65 (105) (zzzza) is only a charge of services simpliciter. Therefore, there cannot be any demand of service tax under any head other than under works contract services. There is no specific demand under works contract services - This charging section specifically excludes “works contracts in respect of roads” as well as the “works contracts in respect of dams”. Therefore, the demand of service tax either on the construction of roads or on the tiling of the reservoir for dams cannot be sustained.
Demand of service under reverse charge mechanism on GTA service - HELD THAT:- Section 65 (50a) defines goods transport agency as any person who provides service in relation to transportation of goods by road and issues a consignment note, by whatever name called. Section 65 (105)(zzq) defines “goods transport agency service” as a service provided to any person by “goods transport agency” in relation to transport of goods by road in a goods carriage. Unless the service provider is a “goods transport agency”, its services are not taxable either at the hands of the service provider or at the hand of service recipient because such services are out of the purview of the charging section. In order for an organisation to be a goods transport agency it must issue consignment notes. It is a well settled legal position that individual truck owners who do not issue consignment notes are not covered by the definition of goods transport agency and the services rendered by them are not exigible to service tax.
Interest and penalty - The demand of service tax under reverse charge mechanism on roads transport agency services on the services rendered by the individual truck owners also cannot be sustained. Since the demand of service tax cannot be sustained, the demand of interest and penalty also need to be set aside.
Conclusion - The demand of service tax either on the construction of roads or on the tiling of the reservoir for dams cannot be sustained. The demand of service tax under reverse charge mechanism on roads transport agency services on the services rendered by the individual truck owners also cannot be sustained. Since the demand of service tax cannot be sustained, the demand of interest and penalty also need to be set aside.
The impugned order is set aside - appeal allowed.
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2025 (1) TMI 1039
Liability of Ex-Servicemen Resettlement Society to pay service tax - no consideration is retained from the bills raised on the clients - exemption from service tax payment in view of the Notification No.14/2004-ST dated 10.09.2004 till 30.06.2012 - HELD THAT:- It is found from the documentary evidence that the Medical Colleges are required to run hospitals which are for the public welfare as well as provide facility of internship to the Medical College students. Therefore, the view of the Revenue not ascribed that the appellant would be eligible for exemption only if the security service is fully or wholly covered by the college. All the above colleges are eligible for exemption and no service tax is required to be paid when the Security Services are rendered to these colleges.
The appellant is periodically engaged in the welfare activities of the ex-servicemen and is providing job opportunities coordinating with RSB for such placements. For such activities, they do not get any considerations. The amounts received on actual of salary, PF etc., are directly credited to the accounts of such employees.
Conclusion - Services provided to educational institutions, including hospitals, are exempt from service tax. Reimbursements are not subject to service tax. Non-commercial activities of a society aimed at resettlement are not taxable.
The confirmed demand of Service Tax is not legally sustainable - Appeal allowed.
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2025 (1) TMI 1038
Taxability - Banking and Financial Services - bank charges paid to foreign banks under reverse charge for the period from July 2012 to March 2013 - HELD THAT:- The very same issue involving the same Appellant was decided in their favour by this Tribunal in M/S. SKM EGG PRODUCTS EXPORT (INDIA) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, SALEM [2023 (7) TMI 756 - CESTAT CHENNAI] wherein it was held the appellant cannot be treated as service recipient and no service tax can be charged under Section 66A read with Rule 2 (1)(2)(iv) of the Service Tax Rules, 1994.
Conclusion - The appellant cannot be treated as service recipient and no service tax can be charged under Section 66A read with Rule 2 (1)(2)(iv) of the Service Tax Rules, 1994.
Appeal allowed.
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