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Service Tax - Case Laws
Showing 361 to 380 of 30277 Records
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2024 (8) TMI 1405
Liability of appellant to pay service tax - reverse charge mechanism - recovery of service tax twice - eligibility of CENVAT Credit - HELD THAT:- As per the facts, even though the appellant is liable to pay service tax but the same service tax was discharged by the service provider. This has been accepted by the revenue and on that basis the original authority has dropped the proceeding. In this fact, even though any activity liable to service tax but the service tax has been discharged even though by different person other the person liable to pay the recovery of service tax again will amount to recovery of service tax twice of the same Tax which is not permissible under any circumstances.
This very issue has been considered by this Tribunal in the case of Dhariwal Industries Limited [2023 (10) TMI 595 - CESTAT AHMEDABAD] wherein considering the various judgments the Tribunal has held that 'once the payment of service tax was made by the transport agency which has not been altered by taking any action by the department, the cenvat credit of the said amount is also rightly available to the appellant.'
Thus, it has been settled that once the service provider discharged the service tax where the service recipient is liable to pay the service tax, demand of service tax on the same service from the service recipient shall not sustain on the ground that the particular service which already suffered the service tax cannot be suffer the service tax twice on the same service. Accordingly, the service tax paid by the transport agency in the facts of the present case is the payment of service tax and not deposit. Therefore, no demand can be raised from the appellant, for the same reason once the amount paid by the transport agency being service tax amount, the appellant is eligible for cenvat credit.
In the present case also the demand is not sustainable - the impugned order is set aside - appeal allowed.
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2024 (8) TMI 1404
Classification of service - Cargo handling service or construction service - Cargo handling service or manpower supply service? - Demand of service tax construction services rendered by the assessee - Penalties under Sections 77(1)(a), 77(1)(b) and 77(1)(c) of the Finance Act, 1994 as well as Rule 7C of the Service Tax Rules, 1994 - assessee have failed to take registration and not filed returns in respect of the services rendered.
Cargo handling service or construction service - HELD THAT:- The entire demand has been raised only on ‘cargo handling service’ and there is no separate demand raised for ‘construction service’. It is a settled law that no service tax liability can be fastened on unidentified service. It is observed that the Notice in this case was issued without specifying the nature of activity carried out by the appellant-assessee and without classifying the service under any particular category of taxable service.
The entire demand has been raised in the Notice on the basis of comparison of the figures as reflected in their Balance Sheet, profit and loss account and S.T.-3 Returns, for the period from 2008-09 to 2012-13. The demand of Service Tax by comparing the turnover found in the Profit & Loss Accounts/Balance Sheets/Bank Statements with that of the ST-3 Returns, without proper inquiry/investigation carried out by the Revenue and without any admissible evidence, is not sustainable - the submission of the appellant-assessee agreed upon that the demands confirmed in the impugned order without quantifying the service tax liability under each category of taxable service is not sustainable.
Demand of Service Tax under the category of ‘cargo handling service’ - Cargo handling service or manpower supply service? - appellant-assessee contended that they have only supplied manpower for the purpose of loading of cement in the trucks and wagons - HELD THAT:- A similar issue, in their own case for the earlier period, has already been decided by this Tribunal in M/S. SEN BROTHERS VERSUS COMMR. OF CGST & CENTRAL EXCISE, BOLPUR [2023 (12) TMI 1345 - CESTAT KOLKATA] wherein this Tribunal held that the activity of supply of manpower for loading of cement would not be classifiable under the category of 'Cargo Handling Service' - the activity of supply of manpower for loading of cement in trucks and wagons is not liable to be classified under the category of ‘cargo handling service’ - the demand of Service Tax under the 'category of cargo handling service is not sustainable.
Demand of service tax construction services rendered by the assessee - HELD THAT:- The ld. adjudicating authority has excluded the value of construction services rendered to IIT - Kharagpur, NIT- Durgapur and M/s. BIT, Mesra also. The ld. adjudicating authority has arrived at the balance Service Tax payable by the appellant-assessee as Rs.2,46,75,336/-. However, the ld. adjudicating authority has not mentioned under which category the appellant-assessee is liable to pay Service tax. It is already observed that the demand of Service Tax confirmed in the impugned order is not sustainable, without specifying the category under which Service Tax is liable to be paid. In view of the above the demand of service tax under the category of 'Construction service' is not sustainable. Since the demand of Service Tax itself is not sustainable, the question of demanding interest and imposing penalty on this demand does not arise.
Penalties under Sections 77(1)(a), 77(1)(b) and 77(1)(c) of the Finance Act, 1994 as well as Rule 7C of the Service Tax Rules, 1994 - assessee have failed to take registration and not filed returns in respect of the services rendered - HELD THAT:- As the services rendered by the assessee have been held to be not liable to Service Tax under the category of ‘cargo handling service’, we hold that no penalty is imposable under Sections 77(1)(a), 77(1)(b) and 77(1)(c) and Rule 7C ibid.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 1340
Jurisdiction to issue order - Recovery of service tax with interest and penalty - Challenge to assessment order - execution of works contracts as a sub-contractor to the main contractor - petitioner having declared income from sub-contracts, and paid income-tax, failed to pay the service tax by duly filing the ST-3 returns - HELD THAT:- As against the order-in-original statutory appeal lies to the Commissioner (Appeals). However, without availing the said remedy the petitioner has approached this Court stating that the order of the 3rd respondent is without jurisdiction, in as much as the services rendered by it to the main contractor are exempt from payment of service tax in terms of the Notification No. 25/2012-Service Tax, dated 20.06.2012.
On the basis of the material before it, the 3rd respondent has passed the order in original. If the petitioner is really aggrieved by the said order remedy is to file an appeal before the appellate authority before which the petitioner can in a better manner, if he has some material to support his contention, establish his case of sub-contract.
It could not be argued by learned counsel for the petitioner as to how the order is without jurisdiction. The issue of the work in question was done as contractor or sub-contractor is one of fact on which finding has been recorded by the 1st authority against the petitioner.
No justifiable ground has been pointed out by the petitioner seeking indulgence of this court under Article 226 of Constitution of India - the writ petition cannot be entertained - Writ Petition is dismissed on the ground of availability of alternative remedy to the petitioner.
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2024 (8) TMI 1339
Invocation of extended period of limitation - SCN issued on the third party data - Recovery of service tax - levy of penalty - HELD THAT:- The show cause notice dated 06.09.2018 seeks to cover the period 2012-13 onwards as submitted by the learned Counsel for the appellant; the period before 01.10.2012 is clearly beyond even the extended period; for this reason, the demand confirmed cannot be sustained and confirmation of demand, if any, has to be for the period 01.10.2012 to 31.03.2013 only. In addition, learned Counsel for the appellant submits that as the appellant has rendered only one service, abatement @60% in terms of Rule (2C) of the Service Tax (Determination of Value) Rules, 2006 should be allowed to them. The argument of learned AR that the appellant has not obtained registration and not filed returns should not come in the way of the benefit i.e. legally due to the appellant.
On going through the facts and circumstances of the case, this Bench finds that there are no reasons to disbelieve the learned Counsel for the appellant. This Bench appreciates the fairness of the learned Counsel in accepting the liability even when extended period cannot be invoked. This Bench finds its appropriate to confirm the duty for the period 01.10.2012 to 31.03.2013 along with interest. This Bench is of the considered opinion that no penalty is imposable on the appellant.
The appeal is partially allowed by confirming the demand of Rs.42,013/- for the period 01.10.2012 to 31.03.2013 along with interest.
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2024 (8) TMI 1338
Refund of service tax paid on the services availed in course of export by whatever name the said services are availed under N/N. 41/2007- ST dated 06.10.2007 - procedural violation - HELD THAT:- The Tribunal in the case of M/S. DURGA MARBLE & MINERALS VERSUS C.C.E. JAIPUR-II [2016 (12) TMI 993 - CESTAT NEW DELHI] has held that 'Since, export of goods in question has not been disputed by the Department, service tax paid on the taxable services used for ultimte exportation of goods, in our opinion, should merit consideration for refund in terms of the Notification dated 6- 10-2007.'
The appellants are eligible to avail refund on GTA Services; however, as submitted by the learned Authorized Representative, the refund shall be limited to the GTA Services availed from the ICD to the Port of export; for this purpose, the matter has to travel back to the Original Authority for verification of the claim of the appellants. Also, in the case of Inspection and Testing Charges, as per their own averment, the appellants did not submit the copies of agreements before the Original Authority; the appeals as far as these charges are concerned also require to be verified by the Original Authority only to the extent of verification of concerned agreements - the credit of service tax paid for C & F Services shall be admissible only w.e.f. 07.12.2008.
The appeals are partly allowed by way of remand to the Original Authority.
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2024 (8) TMI 1337
Classification of service provided by PwC - Chartered Accountant Services or not - Classification of service - Market Research Agency’s Services or not - Export of service - Time Limitation - Interest and penalty.
Classification of service - Chartered Accountant Services or not - HELD THAT:- The appellant, which is a Private Limited Company i.e. an Incorporated Company, is not engaged in the practice of Chartered Accountancy and does not function as statutorily required for Practicing Chartered Accountants and the appellant is not permitted to practice as a firm of chartered accountants by the Institute of Chartered Accountants of India. Therefore, the services rendered by the appellant cannot be classified under ‘CA Services’ by any stretch of imagination.
Classification of service - Market Research Agency’s Services or not - HELD THAT:- The nature of services rendered by the appellant includes providing consultancy or advice, assistance in mergers & acquisition of companies, conducting due diligence under specific situations/transactions, conducting health check or diagnostic reviews, evaluation financial viability of a transaction amongst others. Rather, the nature of services rendered by the appellant, it can be rightly classified under the category of Management or Business Consultants Services. The word management signifies ways and means for managing the organization, by any means i.e. by directions or by regulations or by administration. The word ‘direction’ indicates framing of policy and the word ‘regulation or administration’ indicates the standard operating procedure to be followed for achievement of the policy.
The demand of Rs.1,27,90,193/- has been confirmed considering that the services are to be classified under the practicing Chartered Accountant Services and the Market Research Agency’s Services; but it has not been quantified in the impugned order as to how much is the demand under each category; therefore, the impugned order is bad classifying the services rendered by the appellant under the category of Chartered Accountant Services and the Market Research Agency’s Services.
Export of service - HELD THAT:- The appellant has entered into contract/agreement with PwC Overseas Network Firms and not with the clients of PwC Overseas Network Firms under which the appellant provides services, which can either be provided from the premises of the appellant or any other place as agreed with PwC Overseas Network Firms. The privity of contract arises between the appellant and PwC Overseas Network Firms and not between the appellant and the clients of PwC Overseas Network Firms, because the PwC Overseas Network Firms have separate agreement with its clients.
The issue whether the services provided by the appellant to the Foreign Network Firms and other Foreign Companies for a consideration collected in convertible foreign exchange would be qualified for export services under Export of Services Rules, 2005 or otherwise is no more res integra and has been settled by the Hyderabad Bench of the Tribunal in the appellant’s own case CCCE&ST, HYDERABAD-II VERSUS PRICE WATERHOUSE (VICE-VERSA) [2018 (11) TMI 32 - CESTAT HYDERABAD] where it was held that 'It is undisputed that the appellant herein rendered services to their overseas network entities as well as to their clients located outside India and the consideration for such services was collected inconvertible foreign currency. The findings of the adjudicating authority is that the services rendered by the appellant are in the form of auditing and accounting of various entities situated in India but had only forwarded the certificate to the foreign entities which is not service rendered outside India; it is also finding that the services are rendered to foreign clients, but performed wholly within India.'
Time Limitation - HELD THAT:- The dispute in this case involves interpretation of classification of service and eligibility for export of service and it has been held by the Hon’ble Apex Court in the case of PADMINI PRODUCTS VERSUS COLLECTOR OF C. EX. [1989 (8) TMI 80 - SUPREME COURT] that when the matter involves interpretation of statutory provisions, extended period of limitation cannot be invoked. Further, the extended period cannot be invoked in the present case as there is no evidence on record to show that there is any fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of law or rules made thereunder with intent to evade payment of tax.
Interest and penalty - HELD THAT:- When the demand of service tax itself is not sustainable, therefore, the question of interest and penalty does not arise.
The impugned order is not sustainable in law and is set aside - appeal allowed.
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2024 (8) TMI 1336
Classification of service - Construction of complex service or Works Contract service - scope of SCN - Time limitation - HELD THAT:- While the SCN demanded the Service Tax under the category of ‘Works Contract service’ for the period 01.06.2007 to 31.03.2011, the Adjudicating Authority has confirmed the demand under the different category i.e., under the category of ‘Construction of Residential Complex service’ and has also given some justification to come to this conclusion. This would amount to traversing beyond the scope of SCN. This will also amount to non-following of principles of natural justice. The Appellant was never put to notice that the demand is going to be confirmed under the category of ‘Construction of complex service’. They were issued notice seeking as to why the demand should not be confirmed under the category of ‘Works Contract service’. Therefore, they are defending the demand made under the category of Works Contract, without taking any defence on account of Construction of Complex service.
The confirmed demand is not legally sustainable since the demand was confirmed under the category of ‘Construction of Residential Complex service’ while the SCN was issued under the category of ‘Works Contract service’. The Tribunals have also been holding that no Service Tax is payable till 01.07.2010 irrespective of the category under which the service may fall - Appeal allowed.
Time limitation - HELD THAT:- First of all, the Appellant was properly registered with the Department and they have been filing their Returns regularly. Their ST3 Returns are one of the relied upon documents while issuing the SCN. Further, the VAT Returns have been referred to in the SCN, which shows that they have filed their VAT Returns regularly. Thus, all the data with regard to their turnover was very much being shown in the Returns. Further, in order to clarify the issue as to whether ‘Construction of Residential Complex service’ would be taxable or not, CBIC had issued various circulars between the period 2006 and 2012 - Hence, it can also be said to be as an issue of interpretation. In such circumstances, the Appellant cannot be fastened with the allegation of suppression - Accordingly, the confirmed demand for the extended period set aside on account of time bar also.
Appeal disposed off.
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2024 (8) TMI 1335
Classification of services - Management, Maintenance & Repair Service or Works Contract Service (WCS) - appellant were providing services and were also using their own goods - short payment of service tax - denial of Cenvat Credit - GTA Services - penalties.
Classification of services - Management, Maintenance & Repair Service or Works Contract Service (WCS) - appellant were providing services and were also using their own goods - HELD THAT:- There are force in the Appellant’s argument that no Service Tax was payable for the period till 31.05.2007 as held in catena of decisions. The Adjudicating Authority is required to verify the documentary evidence to the effect that the services would fall under the category of Works Contract service and once he is satisfied, the demands till 31.05.2007 should be dropped. In case of MMRS, the Appellant has also pleaded that even under this category, they would be eligible for tax exemption if the service is provided to Government. The Adjudicating Authority should give opportunity to the Appellant to make their submissions on this count also.
Short payment of service tax - HELD THAT:- The Appellant submits that Rs.24,26,857/- along with interest of Rs.9,34,164/- has already been paid by them and appropriated by the Adjudicating Authority while passing the impugned order. In respect of the balance Rs.6,36,381/-, their pleading towards services being provided under Works Contract service for the period till 31.05.2007 is to be verified by the Adjudicating Authority and if it is found so, the demand has to be dropped.
Denial of Cenvat Credit - HELD THAT:- The Adjudicating Authority should consider all the documents together and pass his Order accordingly. In respect of denial of Cenvat Credit of Rs.39,47,390/-, the Appellant has admitted that they are not in a position to provide any documentary evidence, whatsoever, for an amount of Rs.9,16,391/-. Therefore, the Appellant is directed to pay this amount along with interest thereon. The Appellant is directed to produce photo copies of the invoices in respect of the balance Cenvat Credit along with other corroborative evidence in the form of ledgers for having received the stocks and using the same for provision of taxable services. The Adjudicating Authority to pass considered decision after going through the documentary evidence placed before him.
GTA Services - HELD THAT:- The Appellant’s pleading is that out of demand of Rs.9,77,011/-, they have already paid Rs.8,06,767/-. The Appellant is required to pay interest on this amount and also provide evidence as to why the balance amount is not payable. The Adjudicating Authority to consider these facts and if any further amount is required to be paid for which the Appellant has not provided proper evidence, the balance amount towards GTA services should be recovered from the Appellant along with interest.
Penalties - HELD THAT:- To a great extent, the Appellant has been able to prove that if the service happens to be falling under Works Contract service; that too prior to 31.05.2007, no Service Tax is required to be paid. Further, in many cases they have paid the Service Tax with or without interest. The Adjudicating Authority to consider the factual details and impose the penalty as per the statutory provisions.
Appeal disposed off.
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2024 (8) TMI 1334
Miscellaneous application seeking change of name of the Respondent - Scope of SCN - it is submitted that in the SCN in the present case there was no allegation for proposing demand on the appellant for services provided to HPCL under the head site formation and clearance, excavation and earthmoving and demolition' - Violation of principles of natural justice - HELD THAT:- The SCN was issued to the appellant proposes to classify the demand under ‘Commercial or Industrial Construction Service’ under Section 65(105)(zzq) of the Act, whereas in the impugned order the demand has been confirmed by changing the classification under the head ‘Site Formation and clearance, excavation and Earthmoving and Demolition’ which cannot be done and hence the impugned order is bad in law.
Secondly, it is undisputed that the services rendered by the appellant is classifiable under ‘Works Contract Service’ as provide under Section 65(105)(zzzza) of the Finance Act, 1994 as it involves both supply of goods as well as service; once, it is not disputed, it is the works contract service then demand of service tax under ‘site formation and clearance, excavation and earthmoving and demolition’ is not sustainable in law.
The impugned orders are not sustainable in law and the same are set aside by allowing the appeals of the appellant with consequential relief - Appeal allowed.
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2024 (8) TMI 1333
Classification of service - appellant had performed service in India and delivered clinical study report to their foreign client through E-mail, Courier or website - case of the department is that since the performance of service is in India and the clinical study was carried out on the goods supplied by the service recipient, therefore, the service of the appellant does not fall under the category of Export of Service in terms of Rule 4 of Place of Provision of Service Rules, 2012 - HELD THAT:- The appellant have carried out the clinical study on the drugs supplied by the foreign based service recipient. After carrying out the clinical study on the goods supplied by the service recipient the technical report thereof was supplied to the service recipient. The service recipient is located outside India.
On the identical facts and the activity involved in the present case, various judgments have been passed - reliance can be placed in COMMISSIONER OF CENTRAL EXCISE PUNE-I VERSUS SAI LIFE SCIENCES LTD. [2016 (2) TMI 724 - CESTAT MUMBAI] where it was held that 'it can be safely said that the Research & Development Service performed by the Appellant is export of service in terms of Rule 3 of Rules, 2012. Earlier also for the period July, 2012 to September, 2012, October, 2012 to December, 2012 and January, 2013 to March 2013, the said services were treated as export of services by the department and no relevant material has been placed on record to treat the same differently for the period in dispute. Therefore the Scientific and Technical Consultancy Services provided by the Appellant to DITC is to be treated as export of service.'
In the case of M/S FERTIN PHARMA RESEARCH & DEVELOPMENT INDIA PVT. LTD. VERSUS COMMISSIONER OF CGST, NAVI MUMBAI [2018 (10) TMI 1373 - CESTAT MUMBAI] the tribunal observed 'the appellants are eligible to cash refund of the accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004, except in relation to credit availed input services denied by the Learned Commissioner (Appeals) observing that necessary evidences in relation to Building maintenance charges were not produced to establish the nexus with the output service and secondly the rent-a-cab service since placed under the exclusion clause of the definition of input service after amendment to Rule 2(l) of the Cenvat Credit Rules, 2004 with effect from 1-4-2011.'
Thus, the activity of clinical trial on the drugs supplied by the foreign service recipient to the appellant amounts to export of service, hence, same is not liable to service tax - the impugned order is set aside - appeal allowed.
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2024 (8) TMI 1332
Denial of abatement as per N/N. 32/2004-ST dated 03.12.2004 - benefit denied on the grounds that the invoices issued by the GTA operators did not carry an endorsement to the effect that CENVAT credit has not been availed - HELD THAT:- It is found that the condition laid down in the N/N. 32/2004 is understandably for the GTA Service providers, who pay service tax themselves. It is not applicable to the appellant who pays the service tax on GTA Services received on Reverse Charge basis. Therefore, the Department is reading beyond the scope of the Notification.
Hon’ble Apex Court in the case of M/S. SANDUR MICRO CIRCUITS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BELGAUM [2008 (8) TMI 3 - SUPREME COURT] held that 'The issue relating to effectiveness of a Circular contrary to a Notification statutorily issued has been examined by this Court in several cases. A Circular cannot take away the effect of Notifications statutorily issued. In fact, in certain cases, it has been held that the Circular cannot whittle down the Exemption Notification and restrict the scope of the Exemption Notification or hit it down. In other words, it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed. The principle is applicable to the instant cases also, though the controversy is of different nature.'
The issue is no longer res integra being covered by a catena of judgments. Therefore, the impugned order cannot be sustained - the issue of limitation etc. not gone into as the appellants succeed squarely on merits.
Appeal allowed.
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2024 (8) TMI 1331
Applicability of Sr. No. 45 as as inserted on 01.04.2015 in the Mega Exemption N/N. 25/2012-ST dated 20.06.2012 - amount collected on account of vintage classic car collection w.e.f. 01.04.2015 - Department alleged that the appellant does not fall under the said entry for the reason that the space in the appellants’ premises for keeping the vintage car cannot be called as ‘Museum’ covered under the said entry.
Whether, after 01.04.2015 also, the appellant was still liable to pay service tax on the entry fee as the display of vintage car collection in appellant’s hotel cannot be called as ‘museum’?
HELD THAT:- It is the settled principle of statute interpretation that the terms which have not been defined in a statute are to be understood in their ordinary or popular sense instead of being defined in technical sense. The adjudicating authorities below have relied upon the technical definition of ‘Museum’ given by ICOM statutes adopted by 22nd General Assembly in Vienna, Austria on 24.08.2007.
Support drawn from the decision of Hon’ble Apex Court in the case of MSCO PVT. LTD. VERSUS UNION OF INDIA AND OTHERS [1984 (10) TMI 44 - SUPREME COURT] wherein it has been held that while construing a word in a statute or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or the statutory instrument understand it. The Hon’ble Apex Court clarified that it is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject.
The said decision of Hon’ble Supreme Court is sufficient to hold that the Adjudicating Authorities have committed an error while relying upon ICOM for the definition of word ‘Museum’ as a building in which objects of historical etc., interest are stored or a place having an archive of objects. It is undisputed fact that the appellants were displaying historical/vintage cars in a specific earmarked area in their hotel - the amount collected as entry fee is towards ‘admission to museum’ as is covered under Sr. No. 45 of the exemption notification number.
The amount of entry fee is the fee collected for providing service as that of admission to the vintage car museum in the appellant’s premises, hence, is clearly exempted unless entry no. 45 of the exemption notification. Hence, the demand with respect to the amount of service tax confirmed in this appeal vis-à-vis entry fee to vintage car museum, the demand is held liable to be set-aside. To that extent, the findings in the order under challenge are liable to be set-aside.
The order under challenge of M/s Lake Palace Hotels and Motels Private Limited set aside - appeal allowed.
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2024 (8) TMI 1330
Levy of service tax - appellant’s activity of charging market fee for using licenses to traders/agents/factory etc. - Jurisdiction of officials of the DGGSTI - HELD THAT:- This issue is no more res-integra. The Hon’ble Supreme Court in the case of Krishi Upaj Mandi Samiti vs. Commissioner of Central Excise & Service Tax [2022 (2) TMI 1113 - SUPREME COURT] and held 'The fact that, on and after 1-7-2012, such activity by the Market Committees is put in the Negative List, it can safely be said that under the 2006 circular, the Market Committees were not exempted from payment of service tax on such activities. At this stage, it is required to be noted that it is not the case on behalf of the Market Committees that the activity of rent/lease on shop/land/platform as such cannot be said to be service. However, their only submission is that the Market Committees are exempted from levy of service tax on such service/activity as provided under the 2006 circular, which as observed hereinabove has no substance.'
The adjudication is a quasi-judicial function of the departmental officers of the Central Board of Indirect Taxes and Customs. It is mandatory that a Show Cause Notice (SCN) is issued if the department contemplates any action prejudicial to the assessee. The SCN would detail the provisions of law allegedly violated and ask the noticee to show cause why action should not be initiated against him under the relevant provisions of the Act/Rules. Thus, an SCN gives the noticee an opportunity to present his case. It is noted that the SCN in the present case was issued by the Central Excise officer on 19.06.2014, which is well before the introduction of GST in India. Thereafter, the impugned order was passed in 2018, which was after the introduction of GST - Section 174 of the CGST Act 2017, unequivocally saved all rights, obligations, privileges and liabilities that were available under the old laws, which would continue in the new regime - Section 174 of the CGST Act 2017, unequivocally saved all rights, obligations, privileges and liabilities that were available under the old laws, which would continue in the new regime.
It is noted that in the impugned order, the Commissioner (Appeals) has already upheld the demand for the normal period only. Therefore, this argument of the Counsel does not hold.
The impugned order upheld - appeal dismissed.
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2024 (8) TMI 1278
Exemption from service tax - construction of road for use by the general public - construction of railway siding - Demand of Service Tax amounting to Rs.7,68,021/- - GTA Service - Extended period of limitation.
Exemption from service tax - construction of road for use by the general public - HELD THAT:- The appellant has rendered service in relation to construction of road between NH2 and Aerotropolis Township for M/s. Bengal Aerotropolis Limited. The appellant has pointed out that this road has been certified by the Andal Gram Panchayat as a road meant for ‘public use’. It is observed that construction of road is exempted in terms of Sl. No. 13(a) of Notification No. 25/2012-S.T. dated 20.06.2012 - it is clear that construction of road for use by the general public is exempted. The local authority, namely, Andal Gram Panchayat, has certified that the road constructed is meant for use by ‘general public’. Therefore, the demand confirmed in the impugned order on this count is not sustainable.
Exemption from service tax - construction of railway siding - HELD THAT:- The appellant has also rendered service to RITS in connection with the construction of railway siding. They had also rendered the service of supplying and laying of blanketing material for the project construction of railway, formation of major and minor bridges, laying of railway track including supply of p. way fittings, etc., in connection with new railway siding for Sonepur Bazari Project of Eastern Coalfields Limited, near Pandabeswar, West Bengal to M/s. Bridge & Roof Company (India) Ltd. It is observed that the above said services were rendered by the appellant to the Railways. It is observed that the issue of liability of Service Tax on railway sidings is no more res integra as the same has already been decided in favour of the appellant by the Tribunal, West Zonal Bench, Mumbai in the case of KONKAN RAILWAY CORPORATION LTD VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE [2023 (2) TMI 1175 - CESTAT MUMBAI] holding that any service in relation to railway siding constructed and erected are not liable to Service Tax, which has been affirmed by the Hon’ble Supreme Court in COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS KONKAN RAILWAY CORPORATION LTD. [2023 (8) TMI 128 - SC ORDER].
The demand of Service Tax confirmed in the impugned order for the services rendered in connection with construction of railway sidings and the services rendered to M/s. Bridge & Roof Company (India) Ltd. are not liable to Service Tax.
Demand of Service Tax amounting to Rs.7,68,021/- - Extended period of limitation - HELD THAT:- The said demand pertains to the period 2013-14. The impugned Show Cause Notice was issued on 19.12.2016 on the basis of the differential value of ITR, 26AS and S.T.-3 Returns. There is no finding in the impugned order that the appellant has suppressed any information from the Department. Thus, it is observed that suppression of facts with the intention to evade payment of tax has not been established in this case and hence, the extended period of limitation is not invokable. Accordingly, the demand of Rs.7,68,021/- confirmed in the impugned order for the period 2013-14 by invoking the extended period of limitation is not sustainable.
GTA Service - extended period of limitation - HELD THAT:- The suppression of facts with the intention to evade payment of tax on the part of the appellant has not been established in this case and therefore, the extended period of limitation is not invokable. Therefore, the demand confirmed under the category of GTA Service by invoking the extended period of limitation is not sustainable.
Appeal disposed off.
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2024 (8) TMI 1277
Classification of services as Works Contract Services (WCS) or Erection, Commissioning, or Installation Services (ECIS) - whether the works carried out by the Appellant fall under the definition of 'Original Works' or not? - exemption N/N. 25/2012-ST dated 20.06.2012 - Management, Maintenance & Repair service.
Classification of services as Works Contract Services (WCS) or Erection, Commissioning, or Installation Services (ECIS) - whether the works carried out by the Appellant fall under the definition of 'Original Works' or not? - exemption N/N. 25/2012-ST dated 20.06.2012 - HELD THAT:- A perusal of the SCN indicates that the department had gathered intelligence that the appellant was executing contracts with different Government agencies and providing taxable services, but not discharging his service tax liability. During investigations, the appellant was asked to submit requisite documents/details for verification such as ST-2, ST-3 returns, copies of contract/work orders executed in respect of maintenance & repair services, Erection & Commissioning Services & Works Contract Services, Balance Sheets, ITR, and other details for the financial years 2007-08 to 2011-12 - the department concluded their investigations purely on the basis of the documents submitted by the appellant. The argument of the Ld Counsel does not carry much weight in the light of repeated instances of non-cooperative attitude displayed by the appellant. This submission of the Ld. counsel cannot be accepted.
A perusal of the said notice makes it clear that the department has sought to classify the activity as Erection & Commissioning and/or Works Contract. This factual issue would have been clear had the appellant shared the details of the contracts and work orders with the department - as per section 65(105)(zzzza), Works Contract means a contract wherein, there is transfer of property in goods involved which is leviable to VAT, and such contract includes, inter alia, erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or construction of a new residential complex or a part thereof; or completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or turnkey projects including engineering, procurement and construction commissioning (EPC) projects etc.
The taxable service provided by the appellant prior to 01.07.2012 will be exempted under clause (b) of the definition of works contract service - the demand for the period 1.07.2012 to 31.03.2013 is liable to be dropped as the same is squarely covered by the exemption contained in Notification no. 25/2012-ST dated 20.06.2012.
Management, Maintenance & Repair service - HELD THAT:- The firefighting equipment installation is exempted from service tax, in view of the fact that the same was undertaken in Government buildings which are non-commercial, hence it is agreed with the submissions of the ld counsel that maintenance services provided to government buildings is covered by the retrospective amendment provided by Section 98 from 16.6.2005 till 28.05.2012. Consequently, the demand for its maintenance is also exempted.
The appellant was not liable to service tax on the provision of services to PWD/CPWD. Accordingly, the impugned order is set aside - Appeal allowed.
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2024 (8) TMI 1276
Service tax on Construction and sale of Complex/Houses/Flats constructed by the appellant - Service tax on certain receipts under taxable category of Real Estate Agent service - Liability to pay service tax under Reverse Charge Mechanism on legal charges, manpower supply and works contract services - extended period of limitation.
Service tax on Construction and sale of Complex/Houses/Flats constructed by the appellant - HELD THAT:- This issue has been decided against the Revenue by the judgment of Hon’ble Orissa High Court in the case of LARSEN & TOUBRO LIMITED VERSUS STATE OF ORISSA AND OTHERS [2007 (10) TMI 579 - ORISSA HIGH COURT], wherein the Hon’ble High Court has held that Circulars or other instructions could not provide the machinery provisions for levy of tax. The charging provisions as well as the machinery for its computation must be provided in the Statute or the Rules framed under the Statute - the service tax is not leviable on ‘Construction of Complex Services’.
Service tax on certain receipts under taxable category of Real Estate Agent service - HELD THAT:- The appellant is not acting as a real estate agent and therefore, the service tax is not chargeable on the amounts/fees received by it in the course of performing of statutory duties - It has been consistently held by the Tribunal that charges collected by the builder for authorizing transfer of allotment of property before sale or as part of the sale agreement is on principle to principle basis and no service is provided to any person in relation to sale, purchase, leasing, renting of any real estate and therefore, such charges are not covered under the head of ‘Real Estate Agent Services’ - none of the receipts/income of the appellant fall under the scope of services defined under Section 65(105)(b) of the Finance Act, 1994; hence, this issue is also decided in favour of the appellant.
Liability to pay service tax under Reverse Charge Mechanism on legal charges, manpower supply and works contract services - HELD THAT:- The appellant is not liable to pay service tax on legal charges/fees, on supply of manpower and on execution of work contract, because the appellant is not a business entity. The appellant is admittedly a body corporate but it does not qualify for the criteria of ‘business entity’ nor is it registered as such. Therefore, it cannot be held that the appellant Haryana Housing Board is liable for payment of service tax on reverse charge basis in respect of the services - the demand of service tax under ‘Reverse Charge Mechanism’ is not sustainable.
Extended period of limitation - HELD THAT:- The appellant, which is a governmental authority constituted under the Housing Board Act, 1971, has provided all the information as required by the department. Moreover, being a statutory authority, the appellant is required to maintain proper accounts, which are duly audited by the office of the Accountant General and the audited accounts accompanied by audit report have been forwarded to the State Government as required by the Act. Further, all the figures have been taken from balance sheets. Therefore, in view of this, there is no suppression or fraud with intent to evade the payment of tax - Hon’ble Supreme Court in various cases and it has been consistently held that no suppression or fraud with intent to evade the service tax could be attributed to a government authority as there is no vested interest of the government authority to evade tax - in the present case, the department has failed to establish any of the ingredients which are required to prove in order to invoke extended period of limitation; therefore, the entire demand is barred by limitation.
The impugned orders are not sustainable in law, accordingly, set aside - appeal allowed.
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2024 (8) TMI 1214
CENVAT Credit of Central Excise Duty utilized by the assessee - barred by time limitation - HELD THAT:- It is not in dispute that the respondent Company had availed ineligible CENVAT Credit which was not permissible in terms of the provisions of CENVAT Credit Rules, 2004. It is also not in dispute that the total amount of ineligible CENVAT Credit which includes Service Tax, Education Cess, Secondary & Higher Education Cess comes to Rs. 1,30,84,835/-.
As per Section 73 of the Service Tax (Finance Act, 1994), where any service tax is not levied or paid, short-levied or short-paid or erroneously refunded, a show-cause notice is required to be served upon the person chargeable with the Service Tax within a period of 18(eighteen) months from the relevant date. However, where any Service Tax has not been levied or paid or has been short-levied or short paid or erroneously refunded by reason of fraud or collusion or willful misstatement or suppression of facts or contravention of any of the provisions of Chapter 5 of the Finance Act or of the Rules made thereunder with the intent to evade payment of Service Tax, then the limitation for serving notice upon the person chargeable with the Service Tax is extended upto 5 (five) years from the relevant date.
Whether the respondent Company, in its ST Return, had disclosed all the relevant information regarding availment of CENVAT Credit while submitting ST-3 Returns? - HELD THAT:- On looking into the show-cause notice, it is clear that the respondent Company had provided every details regarding availment of CENVAT Credit in the ST-3 Returns. In the show-cause notice, the details provided by the respondent in ST-3 Return, had been taken into consideration by the Commissioner, Central Excise & Service Tax. It is also to be noticed that in the said show-cause notice, it is nowhere mentioned that the respondent had misstated any fact with intent to evade the payment of Service Tax - The findings recorded by the Commissioner, Central Excise & Service Tax to the effect that there was an element of misstatement and contravention of Service Tax Rules with the intent to evade payment of Service Tax is perverse, as the said finding is not based on any material available before it.
The Hon’ble Supreme Court in various pronouncements has categorically held that the fact of willful misstatement or suppression should specifically be mentioned in the show-cause notice. In M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [2007 (8) TMI 11 - SUPREME COURT] the Hon’ble Supreme Court has defined the expression “suppression” and it was held that 'When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct.'
The respondent Company had disclosed all the details about availment of the CENVAT Credit in ST -3 Returns and there is no allegation by the Revenue of willful suppression and misstatement with intent to evade Service Tax in the show-cause notice, there are no illegality in the impugned order dated 04.12.2019 passed by the CESTAT. Hence, the substantial question, so framed in this appeal, is answered in the affirmative.
The instant excise appeal stands dismissed.
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2024 (8) TMI 1213
Classification of services - maintenance and repair services or not - warranty income - Liability to pay service tax on the warranty income - Compliance with Accounting Standards (AS) 29 in making provisions for warranty services - time limitation - HELD THAT:- The appellant is providing warranty services to the customers who have purchased the machines directly from HIl Germany. The appellant receives commission for such sale. The appellant has discharged service tax on the commission received and there is no dispute. From the amount received as commission they have made provision in their books of account to incur expenses that is required to provide warranty services. It is very much clear from the SCN itself that the appellant has not received any specific or separate consideration for providing repair and maintenance during the warranty services. The provisions made in their books of account as “warranty income” has been construed by the department as a consideration received by them for providing repair and maintenance during the warranty services.
Even after remand, the department has not been able to establish that any separate consideration is received by appellant over and above the commission income - From the SCN, it can be seen that the demand has been raised on the basis of entries made in the books of account of the appellant - AS 29 provides for making Provisions, Contingent Liabilities, Contingent Assets. As per 10.1 of this Accounting Standards, a provision is a liability which can be measured only by using a substantial degree of estimation.
On the provision made in the balance sheet as per Accounting Standards to meet future expenses that may be incurred for carrying out the obligation of warranty services the demand of service tax has been raised. The appellant has made such provision from the commission received from the parent company. They have already discharged service tax on the commission. Demand of service tax cannot be raised on mere book entries assuming such figures as consideration - the appellant has not received any separate consideration for providing maintenance and repair services during the warranty period.
The demand therefore cannot sustain and requires to be set aside - the impugned order is set aside - Appeal allowed.
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2024 (8) TMI 1212
Classification of services - Technical Inspection and Certification Services or Business Auxiliary Services - export of services under ‘Export of Service Rules, 2005’ or not - suppression of facts - invocation of extended period of limitation - penalty.
Whether the services rendered by the appellant fall ‘Technical Inspection and Certification Services’ or as ‘Business Auxiliary Services’? - HELD THAT:- Admittedly, the services rendered by the appellant are undertaken on behalf of the parent company and therefore, rightly classifiable under Business Auxiliary Service as claimed by the appellant. Moreover, Technical Inspection and Certification Service is complete only when the certificate is issued and in the instant case, admittedly, the certificate is issued by the parent company. Therefore, the question of classifying the same under ‘Technical Inspection and Certification Service’ is ruled out.
Whether irrespective of classification these services can be considered as export of services under ‘Export of Service Rules, 2005’? - HELD THAT:- As per Export of Service Rules, 2005 under Rule 3 (1)(ii) proviso, it clearly reads as ‘Provided that where such taxable service is partly performed outside India, it shall be treated as performed outside India;’ therefore, in the instant case, a service is partly performed outside India and it has to be treated as performed outside India. Hence, as rightly claimed by the appellant, the services are to be treated as Export of Service. Similarly, in the case of COMMISSIONER OF SERVICE TAX, MUMBAI-III VERSUS M/S. SGS INDIA PVT. LTD. [2014 (5) TMI 105 - BOMBAY HIGH COURT] the Hon’ble High Court observed 'the Tribunal takes a view that if services were rendered to such foreign clients located abroad, then, the act can be termed as ‘export of service’. Such an act does not invite a Service Tax liability.'
Whether facts were misrepresented/suppressed so as to invoke extended period and impose penalty under various Sections of the Finance Act, 1994? - HELD THAT:- It is a fact that the appellant has been filing Service Tax returns regularly and has paid Service Tax on various services rendered within India; therefore, there being no mis-representation of facts, the said services being partly undertaken in India and partly abroad, the question of paying tax on export of services did not arise. Therefore, when there is no liability itself, the question of suppression of facts does not arise.
The impugned order is set aside and the appeal is allowed.
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2024 (8) TMI 1211
Time and manner of payment of service tax - construction of residential complexes - accrual basis or receipt basis - Service tax on Preferential Location Charges
Time and manner of payment of service tax - construction of residential complexes - HELD THAT:- From the impugned order it is evident that appellants are paying service tax on receipt basis and revenue has issued notice and confirmed the demand against the appellant demanding the tax on accrual basis relying on the provisions of Point of Taxation Rules, 2011. Indeed the scheme of levy of taxation of services was changed with the introduction of Point of Taxation Rules, 2011 and the service tax which was till then being paid on the basis of receipt basis was changed to accrual basis. Undisputedly, in India the accounts of the companies are based on the accrual basis and the Financial Statements are also prepared on the accrual basis.
There are no merits in the submissions made by the appellant to the extent that Rule 3 of the Point of Taxation Rules shall not apply and service tax should be paid by them on the receipt basis - the impugned order, recognizes the fact that appellant’s claim with regards to payment of service tax on the receipt basis and remands the matter back to the original authority for reconciliation of the payment of the service tax made by the appellant on receipt basis with the payment of service tax on accrual basis as per Rule 3.
There are no infirmity in the direction given for the reason that Point of Taxation Rules, only determine the time when the service tax becomes due for the payment and do not create additional liability to tax. In case by following the receipt basis or any other basis if the entire tax liability has been discharged then there can be no demand for the same. However in view of specific stipulation as per the said Rules, if the tax is paid later than the due date then there interest has to be paid for the period of delay.
Service tax on Preferential Location Charges - HELD THAT:- In case of Maharashtra Chamber Of Housing Industry [2012 (1) TMI 98 - BOMBAY HIGH COURT] Hon’ble Bombay High Court has held 'if no separate charge is levied, the liability to pay service tax does not arise and it is only where a particular service is separately charged for that the liability to pay service tax arises. The fact that the service is rendered in the context of a location, does not make it a tax on land within the meaning of Entry 49 of List II. The tax continues to be a tax on the rendering of a service by the builder to the buyer. There is no vagueness and uncertainty. The legislative prescription is clear. Hence, there is no excessive delegation.' - there are no merits in the submission made in respect of Preferential Location Charges.
There are no merits in this appeal - appeal dismissed.
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