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Service Tax - Case Laws
Showing 381 to 400 of 30277 Records
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2024 (8) TMI 1210
Jurisdiction of the Department of Revenue to issue SCN - SCN did not establish that the appellant was providing any service to anybody which was leviable to service tax - time limitation - HELD THAT:- The SCN did not establish that the appellant was providing any service. It is also noted that the SCN was sent to some address in Navi Mumbai whereas the appellant is conducting his business at Dombivli, Thane which is a place different than Vashi, Navi Mumbai and, therefore, the appellant neither received the show cause notice nor the order-in-original till such time the appellant made a request to provide the same somewhere in November 2022. The activity carried out by the appellant was sale of fruits which is covered by entry (e) under Section 66D of Finance Act, 1994 which deals with negative list.
During the relevant period, Department of Revenue did not have any jurisdiction to issue any show cause notice demanding service tax from the appellant.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 1151
Refund of the amount deposited twice as service tax - relevant date for time limitation - whether one year period would be determined mechanically or from the date of knowledge of mistake of wrong deposit? - HELD THAT:- Section 11B of the Act, 1944 was made applicable to service tax by Section 83 of the Finance Act, 1994.
In the present case, service tax has been paid twice and the service provider has claimed the said amount from the appellant company which cannot be passed on since the appellant company itself has deposited the amount with the state exchequers. It is a case of dual payment. The other party namely TDS Management has not moved any application for refund. In the circumstances, the refund of the appellant-company cannot be denied solely on account of delay which has actually not occurred as it is from the date of knowledge.
The respondents are directed to refund the amount of Rs. 4,46,187/- deposited by the appellant-company along with interest. The refund shall be released within six months from today - appeal allowed.
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2024 (8) TMI 1150
Refund of an amount along with interest paid for the period from April 2007 to September 2008 on the ground that it was paid by him under mistake of law - time limitation - principles of unjust enrichment.
Time limitation - HELD THAT:- It is observed that the second refund application was filed by the appellant after five years from the date of CESTAT order and therefore show cause notice rightly been issued; not submitted any proof that they approached the department to adjudicate the matter in 5.5 years; Further, CESTAT directed to examine availability of common facility within the approval layout, in terms of statutory definition of the work executed the appellant, and therefore, onus of providing the documentary evidence w.r.t. said details was on the claimant within in time limit os Section 11B, which they failed to do. Accordingly, there are no infirmity in the order under challenge when refund claim is held to be barred by time.
Principles of unjust enrichment - HELD THAT:- The appellant failed to submit any evidence which show that constructed house is not part of any apartment/township developed by the Rajasthan Housing Board; the work order was inclusive of service tax and the assessee have not produced any evidence that they have refunded the same to the service receiver. Accordingly, no infirmity found in the order under challenge when refund claim is rejected on the ground of unjust enrichment. In light of discussion the findings that services rendered by appellant are taxable also do not suffer any infirmity. The findings in the Order-in-Appeal are sustainable.
The appellant has deposited the impugned amount considering it to be his service tax liability. Nothing has been produced by the appellant to show that the burden of the amount deposited has not been passed on. Hence there are no infirmity in the findings arrived at by the commissioner (Appeals) on this aspect.
Appeal dismissed.
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2024 (8) TMI 1149
Recovery of service tax - service tax short/not-paid due to non-incorporation of entire amount of income from commission, Brokerage, Processing Fees, Locker Rent, etc. - non-payment of service tax on Finance Leasing/Hire Purchase income.
Rs.4,97,545/- has been confirmed as service tax short/not-paid due to non-incorporation of entire amount of income from commission, Brokerage, Processing Fees, Locker Rent, etc., in the taxable value of service - HELD THAT:- The appellant gave a comparative chart showing the figures as adopted by the auditing officials and confirmed by the Ld. Commissioner, and the figures as per audited statement of accounts of the relevant period. It is observed that the ld. adjudicating authority has not given any finding in the impugned order on the above submissions made by the appellant. Thus, it is found that the issue is to be referred back to the adjudicating authority to examine the claim of excess payment made by the appellant as reflected in the table reproduced. Accordingly, this issue is remanded back to the adjudicating authority to give a clear finding on the claim made by the appellant.
Rs.98,33,759/- has been confirmed towards non-payment of service tax on Finance Leasing/Hire Purchase income - HELD THAT:- This demand has been confirmed under the category of the taxable service 'Finance Leasing/Hire Purchase' u/s.65(12)(a)(i) of the Finance Act, 1994.However, the appellant claimed that this income pertains to ‘Interest on Loan' which is exempted from payment of service tax. It is observed that the contract is for lending of money for acquiring any asset and not for lease of any specific asset, their use and occupation. Terms of payment is calculated to cover the money borrowed and interest thereon and not for to cover full cost of asset together with interest charges as the money borrowed may or may not cover the full cost of asset. The borrower is entitled and becomes owner of the asset immediately on purchase of the asset with the help of borrowed money and he need not wait till the lease period comes to an end.
The borrower purchases the assets with the help of the borrowed money and ownership and title of the asset immediately passes on to the borrower, and also remains with the borrower at all times and it never lies with the lender, and the lender has no control over the said asset, and the borrower has not to wait till payment of last instalment to become the owner of the assets - the contract entered in this case is meant for lending of money and not for leasing or hire purchase - the demand of service tax confirmed in the impugned order on this count is not sustainable and hence the same is set aside.
Disallowance of CENVAT Credit - HELD THAT:- The appellant claims that though CENVAT Credit of Rs.22,60,357/- for the year 2010-11 and of Rs.17,48,644/- for the year 2011-12 were recorded in the books of account, those CENVAT amounts were never availed and utilized by them and as such, the appellant had not shown the same in ST-3 return for the respective period - it is observed that the adjudicating authority has not given any finding in the impugned order on the above submissions made by the appellant. Thus, the issue is to be referred back to the adjudicating authority to examine the factual position. Accordingly, this issue is remanded back to the adjudicating authority to give a clear finding on the claim made by the appellant.
Disallowance of CENVAT credit of Rs.8,21,910/- - HELD THAT:- It is observed that the appellant made some investment along with 60 other member banks in the Consortium for Food Credit under leadership of State Bank of India. For the period from October 2011 to March 2012, State Bank of India charged service tax of Rs.8,21,910/-. During the said period, the appellant had taxable service of Rs.8,27,787/- and service tax liability including Education Cess and Higher Education Cess of Rs.85,263/-, and the appellant utilized Rs.85,263/- out of the aforesaid CENVAT Credit of Rs.8,21,910/- for payment of service tax, Education Cess and Higher Education Cess. Subsequently the appellant came to know that the said CENVAT Credit is not available to them as the interest income from Food Credit Consortium is an exempted service on which no service tax is payable. So, subsequent to return period from October 2011 to March 2012, the appellant stopped to claim and avail CENVAT Credit for the said service and also not carried forward the unutilized CENVAT Credit for the period from October 2011 to March 2012 to the next return period.
The service tax liability, including Education Cess and Higher Education Cess, of Rs.85,263/-, has been paid by the appellant by utilizing the aforesaid CENVAT Credit of Rs.8,21,910/-. The appellant claimed that they have not carried forward the balance credit. This fact also needs to be verified. Thus, the issue is to be referred back to the adjudicating authority to examine the factual position. Accordingly, this issue is remanded back to the adjudicating authority to give a clear finding on the claim made by the appellant. However, the appellant is liable to pay back credit of Rs.85,263/- which has been wrongly utilized by them.
Penalty - HELD THAT:- It is observed that they have regularly paid their service tax liability as per books of accounts and as per the Provisions of Finance Act, 1994, as amended. None of the conditions precedent for imposing penalty under section 78 of the Finance Act, 1994 read with Rule 15 of CENVAT Credit Rules, 2004 as amended, are applicable in the case of the appellant. Accordingly, no penalty is imposable on the appellant. Hence, we set aside the penalty of Rs.1,51,50,155/- imposed on the appellant in the impugned order.
Appeal disposed off.
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2024 (8) TMI 1107
Demand of service tax - Invocation of extra ordinary jurisdiction of this Court under Article 226 of the Constitution inspite of the statutory remedy available - SCN reply not submitted - health issues of the petitioner - HELD THAT:- From the decision in the case of PHR INVENT EDUCATIONAL SOCIETY VERSUS UCO BANK AND OTHERS [2024 (4) TMI 466 - SUPREME COURT (LB)], it is seen that the Supreme Court had observed that the High Court ought not to ordinarily entertain a writ petition under Article 226 of the Constitution, if an effective remedy is available to the aggrieved person and such a principle should be applied with great rigour in matters involving recovery of taxes, cess, fees and other types of public money.
Merely because of the fact that the petitioner could not submit the reply to the show cause notice on the ground that he was incapacitated on account of his health problems cannot be a ground to involve the writ remedy more so, when the documents enclosed to the writ petition do not show the petitioner was infact incapacitated from filing the reply to the show cause notice at that relevant part of time. Therefore the question of violation of the principles of natural justice as claimed by the petitioner do not arise. Under such circumstances, this Court finds no ground to entertain the instant writ petition, taking into account that there is an alternative and an efficacious remedy available to the petitioner for which the instant writ petition stands dismissed.
This Court is of the opinion that the interest of justice would be met, if further 30 (thirty) days time is granted from today to the petitioner to file an Appeal before the Appellate Authority as mentioned in the impugned order dated 26.03.2024 itself. Accordingly, this Court observes and directs that if the petitioner herein files an appeal within 30 (thirty) days from the date of the instant order, the Commissioner (Appeals) shall decide the appeal on merits without going into the question of limitation.
Petition disposed off.
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2024 (8) TMI 1106
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - non-filing of ST-3 returns - Circular No. 1074/07/2019-CX dated 12th December 2019 - HELD THAT:- From the impugned order dated 19th June 2023 it appears that respondent no. 3 has admitted in paragraph 14 that petitioner has discharged its liability for Financial Year 2016-2017 and 2017-2018 as per the declaration filed under the SVLDR Scheme - notwithstanding the outcome of Financial Year 2015-2016, in our view, petitioner certainly be entitled for issuance of Form-4 for Financial Year 2016-2017 and 2017-2018. Therefore, respondent no. 3 is directed to issue Form 4 for Financial Year 2016-2017 and 2017-2018 within one week of this order being uploaded.
The show cause notice cum demand notice dated 30th December 2020, which is also impugned in the petition, is quashed and set aside - The time to issue fresh show cause notice, if required for Financial Year 2015-2016 is extended for a period of 30 days after the disposal of petitioner's declaration for Financial Year 2015-2016 - Petition disposed off.
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2024 (8) TMI 1105
Denial of interest claimed u/s. 11BB of the Central Excise Act, on delayed refunds sanctioned under Rule - 5 of the Cenvat Credit Rules, 2004 - HELD THAT:- Consistent decisions are available on the issue of payment of interest on delayed refund of unutilized credit since provision of the Law, supported by judgments of Hon’ble Gujarat High Court in COMMISSIONER OF CENTRAL EXCISE VERSUS RELIANCE INDUSTRIES LTD. [2010 (10) TMI 190 - GUJARAT HIGH COURT] was pronounced favouring such interest payment except the one passed in Gionee India Pvt. Ltd. case, in which its inadmissibility is distinguishable and could never be taken as binding precedent for not having considered the settled position of law in this case, apart from the fact that provision under Rule 11B covers refund of accumulated cenvat credit that is payable on export under Rule-5 of Cenvat Credit Rules, which is put in the category of refund of duty and section 11BB grants interest to such refund sanctioned three months beyond receipt of the refund application, which is consistently held to be counted from the date of filing of first refund application.
The appellant is entitled to get interest on refund sanctioned to it from three months after expiry of the date of filing of its first refund application for respective appeals - appeal allowed.
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2024 (8) TMI 1104
Levy of service tax - Commission/brokerage received from Shipping Lines - Cargo handling services - Difference on ocean freight collected and paid to shipping lines - Director Sitting fees - GTA services.
Director Sitting fees - HELD THAT:- The Appellant has accepted the demand of service tax of Rs.2,96,020/- confirmed in the impugned order on the ‘Director Sitting Fees’ and contested the remaining demands. Regarding the demand of Rs.2,96,020/- confirmed on the Director Sitting Fees, it is observed that the Appellant has already paid this amount, but not paid the interest. Accordingly, the demand of service tax upheld along with interest confirmed in the impugned order on this count. As there is no suppression of fact with intention to evade the tax established in this case, no penalty is imposable on the Appellant on this demand confirmed and upheld.
Commission/brokerage received from Shipping Lines - HELD THAT:- There is no taxable service rendered by the appellant to the shipping lines and the commission earned is on account of booking of cargo with the shipping lines over the years. This amount is not liable for service tax under the category of business auxiliary service, as there is no agreement of 'commission agent' between the Appellant and shipping lines - This view has been taken by the Larger Bench of the Tribunal in the case of Kafila Hospitality & Travels Pvt. Ltd. [2021 (3) TMI 773 - CESTAT NEW DELHI (LB)], wherein it has been held that the commission earned for selling of space by the shipping lines is not liable to service tax under the category of ‘business auxiliary service’ - the demand confirmed in the impugned order on this count is not sustainable and is set aside.
Cargo handling services - HELD THAT:- It is observed that the demand of service tax has been confirmed by the ld. adjudicating authority on the amounts received by the appellant as 'reimbursable expenses' during the course of provision of CHA services. It is found that the such expenses received by the appellant are related to AD Code Registration charges, Custom Clearance charges, Port charges, EDI Registration charges, AWB fee etc. which were nothing but 'reimbursement' of actual expenses and hence they cannot form part of consideration for levy of service tax - reliance placed on the decision of CESTAT New Delhi in the case of Commissioner of Service Tax, New Delhi v. Karam Freight Movers [2017 (3) TMI 785 - CESTAT NEW DELHI] wherein it has been held that the amounts reimbursed on actual basis are not to be included for Service Tax purpose - the demand confirmed in the impugned order on account of cargo handling service is not sustainable and is set aside.
Difference on ocean freight collected and paid to shipping lines - HELD THAT:- There is no finding in the impugned order to substantiate this allegation. From the records submitted by the Appellant it is found that the amount involved in this regard are the profit earned by the Appellant from ocean freight. Further, it is observed that the issue of taxability of profit earned on ocean freight is no longer res integra as the same issue has already been decided by this Tribunal in the case of Tierra Logistics Pvt. Ltd. [2023 (9) TMI 1141 - CESTAT KOLKATA] - thus, the demand confirmed in the impugned order on this count is not sustainable and the same is set aside.
GTA services - Transportation charges as recipient of services - HELD THAT:- The invoice has been raised on the Appellant for transportation of the goods and it has been categorically mentioned in the said invoice that the Service Tax is to be paid by the Party. Accordingly, in respect of this invoice, the liability of payment of Service Tax on the freight amount of Rs.4,20,000/- is on the Appellant. Therefore, the Appellant is liable to pay Service Tax on this invoice on the freight amount of Rs.4,20,000/- under the category of GTA Service, along with interest.
GTA services - HELD THAT:- The services provided by the various local truck owners are not related to goods transportation service as there was no ‘consignment note’ issued by such persons to the Appellant. The goods were moved on the ‘consignment note’ issued by the Appellant to their customers and on the value of which the customers of the Appellant were liable to pay service tax as recipients of service. Thus, in this regard, it is held that the Appellant is not liable to pay service tax under the category of GTA service - demand set aside.
Appeal disposed off.
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2024 (8) TMI 1103
Extended period of limitation - levy of service tax - GTA services.
Time Limitation - appellants submits that the issue has arisen on the basis of 26AS statement of the appellants supplied by the Income Tax Department and therefore, extended period cannot be invoked - HELD THAT:- It is found that Revenue has issued the Show Cause Notice on the strength of the data supplied by the Income Tax Department; Revenue claims that they have given three opportunities to the appellants by way of letters/ mails/ summonses and as the appellant did not supply data, they have taken recourse to best judgment method. The appellants claim that the summonses/ letters sent by the Department were not received by the appellant as the same were sent to their old address - The Department with all the might at their disposal could have verified the address of the appellants and the records thereof. Learned Authorized Representative submits that a huge demand of Rs.3.5 crore cannot be assessed or finalized on the basis of sample invoices - the demand is huge, the Department should have undertaken appropriate investigation into the matter.
The Show Cause Notice does not bring about any positive act on the part of the appellants with intent to evade payment of duty so as to allege suppression, mis-declaration etc. in order to invoke extended period - Tribunal has been consistently holding that extended period cannot be invoked when the case is made on the basis of 26AS statement, more so, when no ingredients for invocation of extended period are present in the case. Therefore, we are of the considered opinion that no case has been made for invocation of extended period.
In the instant case, the appellant is a GTA service provider wherein the service recipient is liable to pay service tax on Reverse Charge Mechanism. The Department failed to adduce any evidence to the effect that the appellants have rendered taxable service to the category of persons who do not fall under the category liable to pay service tax on RCM basis and this appropriate tax requires to be paid by the appellants themselves. In the absence of the same, the benefit of doubt has to be given to the appellants. It is not proper on the part of the Department to make allegations and show the failure on the part of the appellants to provide records as evidence. It is for the Department who are alleging to adduce evidence.
The extended period cannot be invoked and thus, the appeal succeeds on limitation - appeal is allowed on limitation.
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2024 (8) TMI 1102
Levy of service tax - transportation of goods through pipeline/conduit service - works contract service - period from 01.04.2013 to 31.03.2014.
Advance Received against Transmission Charges from Tea Estate and other consumers - HELD THAT:- The same issue has already been settled by this Tribunal in the appellant’s own case Final Order Nos. 76345-76346 of 2024 dated 25.06.2024 [2024 (8) TMI 396 - CESTAT KOLKATA] where it was held that 'Any interest therefore earned thereon shall not be includible in the gross taxable value for purpose of assessment. The department has woefully failed to establish any nexus with the security deposit to the discharge of the taxable service per se nor has it been borne out of record that such deposit in any way influences the value of the service rendered. It thus cannot form part of the taxable service and demand on this account for the aforesaid amount of Rs.40,77,945/- is required to be set aside.' - thus, the demand of service tax confirmed in the impugned order, on this count is not sustainable.
Amount against cost of Gas Meter and installation charges - HELD THAT:- The amount is collected as 'security deposit' in terms of Section 14 of the PNGRB Act, 2006. Further, this amount is refundable at the time of surrender of the connection. Hence, no taxable service is rendered and the amount is not liable to Service Tax - the demand of service tax confirmed in the impugned order, on this count is not sustainable.
Reconnection charges collected against re-installation - HELD THAT:- Regarding the demand of Rs.1,483/- on the reconnection charges against re-installation, it is observed that the appellant has not contested this demand. Further, in the appellant’s own case, this Tribunal vide Final Order [2024 (8) TMI 396 - CESTAT KOLKATA] has held that the appellant is liable to pay Service Tax on re-connection charges - the appellant is liable to pay service tax along with interest on the reconnection charges received by them. However, there is no suppression of fact with intention to evade the payment of tax exist in this case and hence, no penalty is imposed on this demand.
Penalties - HELD THAT:- All the penalties imposed on the appellant are set aside.
Appeal disposed off.
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2024 (8) TMI 1101
Classification of services - construction of roads services or construction of complex services - works contract services - best judgment assessment resorted to under section 72 of the Finance Act - appellant had already paid service tax, as applicable, even before the SCN was issued - applicability of section 73 (3) of the Finance Act.
The submission is that the appellant was told by some consultant that it need not pay service tax and therefore based on that advice it had not obtained service tax registration and had not paid service tax.
HELD THAT:- It is found that the intent can only be infered from the facts of the case. In this case, the violation of the Act or Rules is evident and it also evident that as a result the appellant had not paid service tax which it had to pay. The plea that it’s consultant had advised it not to pay service tax and, therefore, it had no intent to evade cannot be accepted. If this is accepted as a ground, anybody rendering taxable services and not paying tax can simply take the plea that some consultant had advised him not to pay service tax and not take registration and service tax - in the provisions related to invoking extended period of limitation under section 73 and imposition of penalty under section 78 are identical to the provisions of section 73 (4) - there are no reason to take a different view in this regard to the extended period of limitation or imposition of penalty under section 78.
The rest of the demand of service tax is upheld. The amounts already paid by the appellant as service tax need to be appropriated against the remaining part of the demand.
Interest will be payable as appropriate and any amounts of interest already paid shall be adjusted towards it. Penalty imposed under section 78 of the Finance Act needs to be recomputed accordingly.
Appeal allowed in part.
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2024 (8) TMI 1054
Classification and taxability of services related to patent application provided by various foreign companies all located outside India - Service Tax liability in terms of Notification No.36/2004-ST dated 31.12.2004 issued under Section 68(2) of the Finance Act, 1994, read with Rule 2(l)(d)(iv) of the Service Tax Rules, 1994 and in terms of Section 66A of the Finance Act, 1994 - invocation of extended period of demand and penalties for contraventions of various Sections of Finance Act, 1994.
Classification and taxability of services related to patent application provided by various foreign companies all located outside India - HELD THAT:- As rightly claimed by the Counsel, the services which are purely in the form of professional and patent related services cannot be classified under ‘Business Support Service’ for operational assistance for marketing. Reliance placed by the Commissioner on the amended version also is not applicable since it cannot be retrospectively applied for the period under dispute. The “legal consultancy services” was brought to taxable net with effect from 01.09.2009 by amending the Finance Act under Section 65 (105) (zzzzm) which is defined as “To a business entity, by any other business entity, in relation to advice, consultancy or assistance in any branch of law, in any manner and there is no dispute of the fact that this classification has been accepted by the department from 01.09.2009 - there are no reason to classify the above services under BSS and also taking into consideration the fact that the payment of Service Tax under Legal Consultancy Service for the above services from 1.9.2009 not being disputed, we set aside the impugned order.
Since the services received by the appellant are aptly covered under the Legal Services, the question of classifying them under the Business Support Services does not arise. The learned counsel submission that (successor to Service Tax regime), the ‘Legal services’ specifically includes ‘Legal documentation and certification services concerning patents, copyrights and other intellectual property’ as a separate sub-heading emphasises the point that the impugned services clearly fall under the ambit of legal services.
Service Tax liability in terms of Notification No.36/2004-ST dated 31.12.2004 issued under Section 68(2) of the Finance Act, 1994, read with Rule 2(l)(d)(iv) of the Service Tax Rules, 1994 and in terms of Section 66A of the Finance Act, 1994 - HELD THAT:- The appellant is not liable to service tax during the disputed period under BSS, whether they are liable to pay Service Tax under reverse charge mechanism or not is only academic as there is no denial of the fact that they are liable for payment of Service Tax under Reverse charge mechanism.
Invocation of extended period of demand and penalties for contraventions of various Sections of Finance Act, 1994 - HELD THAT:- The appellant herein has been rendering various services such as ‘Scientific or Technical Consultancy’ Service, Technical Testing and Analysis’ Service, ‘Renting of Immovable Property’ Service, ‘Business Auxiliary Service’ etc; on which service tax is discharged regularly. Appellant has also been filing ST-3 Returns regularly and there is nothing on record to show that there is wilful suppression of misstatement of facts. No grounds have been alleged in the impugned order for invocation of suppression and as rightly claimed by the appellant in view of the Hon’ble Supreme Court’s decision in the case of M/S. UNIWORTH TEXTILES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE. RAIPUR [2013 (1) TMI 616 - SUPREME COURT], the question of invoking suppression without any mala fide intention is proved on the part of the appellant.
The demand is set aside for the period from March 2006 to 31.08.2009 along with interest and all other penalties. The demand of service tax from 01.09.2009 under Legal Consultancy service is upheld - Appeal disposed off.
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2024 (8) TMI 1053
Taxability - revenue-sharing arrangements between theatre owners and distributors - principal contention of the appellant is that the agreements have been misconstrued for contriving a new entity birthed therefrom and that the circular of 2011 has been inappropriately relied upon by disregard of the clear instructions in that of 2009 inasmuch as the former has not disowned the exhortation that each arrangement must be scrutinized for ascertaining the elements of service, as set out in Finance Act, 1994, as prelude to tax.
HELD THAT:- ‘Parallel’ is an expression deployed in context of the film industry but here we find two parallel lines - of constitutional restriction disbarring levy on screening of films and fictional conception of an entity excoriating the flesh and blood of the charging provision - sought to be converged for bringing the ‘box office’, or part thereof, within the tax net of Finance Act, 1994. The implication is that the ‘box office’ manifests the joint venture between the exhibitor and distributor and, though not liable to tax of itself, had incurred costs of procuring ‘service’ from the two collaborators of which provision of ‘support service of business or commerce’, enabling the venture to screen films, was sought to be fastened on the exhibitor -
Once again, and with the additional benefit of subsequent developments in the above dispute, the Tribunal had cause to look at another controversy, and with substitution of the distributor by ‘association of persons’ as recipient, identical to the one now here in M/S. INOX LEISURE LTD. VERSUS COMMISSIONER OF SERVICE TAX-V, MUMBAI [2022 (3) TMI 1256 - CESTAT MUMBAI]. It was noted therein that the earlier decision was applicable even in the changed circumstances of ‘negative list’ and any contrary stand on taxability was doubtlessly unacceptable.
Thus, the demand and penalty in the impugned order have no basis in law and must be set aside - appeal allowed.
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2024 (8) TMI 1052
Benefit of input service tax credit - short payment of Service Tax by arriving at the demand on the net receipt basis - Extended period of limitation - whether there is any infirmity in the Order of the Commissioner (Appeals) who has partly upheld the Order of the Original Authority or otherwise?
Benefit of input service tax credit for the year 2015-16, which was to be adjusted against the demand for the same period - HELD THAT:- It is found that when the Commissioner (Appeals) has allowed the deduction to the extent of Service Tax paid by their vendor from the gross value for working out differential demand, which has not been disputed by the Revenue nor appealed against, the same principle will have to be applied for the remaining years i.e., 2014-15, 2016-17 & 2017-18 (up to June, 2017). Commissioner (Appeals) has only stated that as the Appellant failed to submit any Cenvat Credit account showing that they had taken the credit in their books of accounts, credit cannot be allowed particularly in view of the restriction that Cenvat Credit has to be taken within one year from the date of issue of invoice - Commissioner (Appeals) should have given a detailed speaking order as regards denying the Appellant’s claim for said deductions also. Therefore, this issue needs to be re-determined by the Commissioner (Appeals) where the Appellants will be at liberty to produce all supporting documents for seeking such adjustment/deduction.
Short payment of Service Tax by arriving at the demand on the net receipt basis, without giving them the benefit of cum-tax value - HELD THAT:- The Commissioner (Appeals) has already extended this benefit to the Appellant and recalculated the Service Tax paid as Rs.6,71,569/- (Para 14). Therefore, there is also no reason to interfere with this finding of the Commissioner (Appeals) on this ground.
With regard to Service Tax of Rs.47,683/- confirmed after abatement of 67% as against applicable 60%, the Commissioner (Appeals) has in terms of Rule 2A(ii)(a) of the Service Tax (Determination of Value) Rules, 2006 held that abatement admissible will be 60% and not 67% and therefore, upheld the demand of Rs.47,683/-. However, with regard to Service Tax demand of Rs.77,002/- confirmed on account of short payment of Service Tax for the period 2017-18 (up to June, 2017), since there was no dispute about the short payment nor Appellant has made any specific submission, confirmed demand was upheld as such. Therefore, on this issue also there appears no infirmity in Impugned Order - barring the issue of confirmation of demand of Rs.47,683/- by resorting to Rule 2A(ii)(a) of Service Tax Rules and not allowing certain adjustments against Service Tax paid to vendors/sub-contractors for remaining years, the rest of the Order does not need any interference as there is no ground substantiated by the learned Advocate to suggest that there was any gross error in arriving at such calculation or in denying any legal rights of the Appellant in the facts of the case or evidence on record.
The rules relied upon by the Commissioner (Appeals), was not invoked in the SCN, as admitted by the Adjudicating Authority also and therefore, the same could not become the basis for confirming the demand when the grounds on which demand is proposed to be confirmed was not disclosed in the SCN, in view of settled legal position in this regard - the demand upheld by the Commissioner (Appeals) is not tenable and requires to be set aside. Similarly, the contention of the Appellant regarding eligibility for adjustment for remaining years also needs to be reexamined in view of lack of detailed reasons given for denial.
Extended period of limitation - HELD THAT:- In the facts of the case, it is obvious that the Appellants were following certain method of calculation for discharge of Service Tax which was not proper or in accordance with the applicable laws, Rules, etc. The whole discrepancy was noticed only on detailed verification and plausible submissions made by the Appellants. Some of the submissions like deduction of Service Tax paid to the vendors, though accepted by the Commissioner (Appeals), and not disputed by Revenue, are debatable on the fair reading of applicable legal provisions which require service provider to discharge Service Tax and the service recipient is required to pay the Service Tax. The recipient of service on which service tax has been paid is also entitled to take credit and utilize against his further liability subject to provisions of Cenvat Credit Rules - Since the Commissioner (Appeals) has already given the benefit in this regard and this aspect is not being disputed by the Revenue, this issue is not being examined. However, the fact remains that though the Appellants have claimed bonafide belief of the practice that was being followed by them regarding deductions from the gross value, it could not be said that following wrong practice or inconsistent practice which is not permissible under the law, would tantamount to their disclosure of facts to the Department and in turn prevent the Department from invoking the extended period.
In the facts of the case, the grounds on which the Commissioner (Appeals) has upheld the decision of the Adjudicating Authority for invoking extended period are correct and therefore, there is no need to interfere with the findings of the Commissioner (Appeals) on this issue. In other words, the extended period will be applicable in the facts of the case.
The Order of the Commissioner (Appeals) does not need any interference, except to the extent of its confirming the demand of Rs.47,683/- which cannot be sustained and denial of adjustment for the years 2014-15, 2016-17 & 2017-18 (up to June, 2017) without giving adequate reasons for its denial. This issue therefore requires to be re-determined by the Appellant Authority on the basis of documents submitted including any other relevant documents which Appellants may adduce in support of their claim. Penalty proposed under Section 78 will also has to be re-determined in view of final confirmed demand liable to be paid by the Appellants.
The Appeal is therefore partly allowed by way of setting aside the Order of confirmation of Rs.47,683/- by Commissioner (Appeals) and remanding the issue of eligibility and extent for adjustment against demand for the years 2014-15, 2016-17 & 2017-18 (up to June, 2017).
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2024 (8) TMI 995
CENVAT Credit - input services - Trading activities - N/N. 03/2011-CE dated 01.03.2011 - Rule 6(3A) of the Cenvat Credit Rules, 2004 - period of dispute is from 01.04.2011 to 31.03.2012 - HELD THAT:- In the present case the period of dispute is from 01.04.2011 to 31.03.2012 vide N/N. 03/2011-CE dated 01.03.2011, the definition of exempted service has been amended to cover trading activities. It is also that the appellant has accepted that they are required to reverse the cenvat credit on trading activities; as per the appellant the amount to be reversed comes to Rs. 2,00,455/-, whereas, as per the department, Cenvat credit required to be reversed as per the formula prescribed in rule 6(3A) amount to Rs. 2,70,184/-.
On the basis of the formula as prescribed in Rule 6(3A) of the Cenvat Credit Rules the amount of proportionate credit to be reversed comes to Rs. 2,70,184/-. There are no infirmity in the amount of Cenvat credit to be reversed as held by both the authorities below after applying the formula given in Rule 6(3A) of Cenvat Credit Rules.
It is found that Ahmedabad Bench of the CESTAt in the case of Orion Appliances Ltd. [2010 (5) TMI 85 - CESTAT, AHMEDABAD], it was held that 'Naturally this cannot be done in advance since it may not be possible to forecast what would be the quantum of trading activity and other activity which is liable to service tax. The only obvious solution which would be legally correct appears to be to ensure that once in a quarter or once in a six months, the quantum of input service tax credit attributed to trading activities according to standard accounting principles is deducted and the balance only availed for the purpose of payment of service tax of output service.'
In view of the statutory provisions as prescribed in Rule 6(3A) of the Cenvat Credit Rules and the decision of the Orion Appliances Ltd., it is found that there is no infirmity in the impugned order - the appeal is dismissed.
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2024 (8) TMI 959
Levy of service tax - business auxiliary service - receiving ‘indent commission’ from their overseas holding company - HELD THAT:- After analysing the judgments of the Hon’ble Delhi High Court in VERIZON COMMUNICATION INDIA PVT. LTD. VERSUS ASSISTANT COMMISSIONER, SERVICE TAX, DELHI III, DIVISION-XIV & ANR. [2017 (9) TMI 632 - DELHI HIGH COURT] which approved the view taken by the M/S PAUL MERCHANTS LIMITED & OTHERS VERSUS CCE, CHANDIGARH [2012 (12) TMI 424 - CESTAT, DELHI (LB)] and other judgments on the subject, the Larger Bench observed 'Arcelor India provides the necessary details of the customers in India to the foreign steel mills and, thereafter, the foreign steel mills and the Indian customers execute a contract for supply of the goods. The goods are directly supplied by the foreign steel mills to the Indian customers. Arcelor India also satisfies condition (b) of rule 3(2) as payments for such service have been received in convertible foreign exchange.'
The principle laid down by the Larger Bench in the aforesaid case is squarely applicable to the facts of the present case. Hence, the services rendered by the appellant to their holding company would fall within the scope of Export of Service Rules, 2005. Consequently, the demand cannot be sustained.
The impugned orders are aside - appeals are allowed.
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2024 (8) TMI 909
Jurisdiction to issue SCN - Invocation of Article 226 of the Constitution of India - Reverse Charge - Double taxation - Tax liability was discharged on forward charge basis - scheme of arrangement under Section 391 read with Section 394 of Companies Act, 1956 - allegation is that Petitioner-LTHE, as a legal entity had not paid service tax for the financial year 2013-14 - HELD THAT:- The whole basis of issuing show cause notice is that High Court has approved the scheme of arrangement without considering that the scheme is in contravention to the provisions of the Finance Act, 1954 and the Rules made thereunder. In our view, if Respondents were aggrieved by order dated 20th December 2013 approving the scheme of arrangement then they ought to have challenged the same. However, it is undisputed that the order sanctioning the scheme has not been challenged by any authority and has attained finality. Therefore on this basis itself the show cause notice falls to ground.
This very issue had come up for consideration under the excise law before the Gujarat High Court in the case of this very Petitioner in Special Civil Application No. 11308 of 2019 [2022 (4) TMI 70 - GUJARAT HIGH COURT] and the Gujarat High Court by order and judgment dated 3rd February 2022 (said judgment) entertained the writ and quashed the show cause notice under the excise law. The basis of show cause notice before Gujarat High Court is similar to that which is impugned in the present petition. The Gujarat High Court after considering the scheme approved by this Court under the Companies Act quashed the show cause notice.
Since show cause notice has been issued without jurisdiction discretion under Article 226 of the Constitution of India is exercised and further respectfully agreeing with the decision of the Gujarat High Court in case of this very Petitioners, the impugned show cause notice dated 23rd October 2018 is quashed and set aside.
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2024 (8) TMI 908
Liability to pay service tax under Reverse Charge mechansim - commission paid to foreign commission agents - case of the department is that appellant have made the payment of commission to foreign buyer against service of Commission Agent of foreign based service provider - HELD THAT:- As per the documentary evidence such as invoice, it is clear that appellant has not made any payment directly to any commission agent whereas deduction was provided from the total value of the bill raised to foreign buyer of the goods. In these facts, it is nothing but discount extended by the appellant to the buyer of the goods. Even though some service provider is involved there is no relationship between the appellant and any foreign based service provider as there is no direct transaction made by the appellant with any of the commission agent. It is also a fact that there is no contract between the appellant and the foreign based service provider even if any arrangement of payment is there between the buyer of the goods and so called commission agent in the foreign country. For this reason, the demand of service tax on the commission shown in the invoice raised to the buyer cannot be made.
Reliance placed in the case of Laxmi Exports vs. CCE&ST [2020 (9) TMI 838 - CESTAT AHMEDABAD] where it was held that 'since no service exists, the entire demand would not stand. Accordingly, the impugned orders are set-aside and the appeals are allowed with consequential relief, if any, in accordance with law.'
Reliance placed in the case of Aquamarine Exports [2022 (2) TMI 361 - CESTAT AHMEDABAD], where it was held that 'the commission deducted by the appellant in the present case in the invoice is nothing but a trade discount and same is not subjected to service tax.'
Thus, the issue is no longer res-integra and settled in favour of the assessee. Accordingly the demand of service tax on the commission deducted in the sale invoice of the appellant to their foreign buyer is not chargeable to service tax. Accordingly, the impugned order is set-aside.
Appeal allowed.
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2024 (8) TMI 853
Maintainability of appeal in view of statutory provisions under Section 35 and especially under Section 35B of Central Excise Act as made applicable to Service Tax - Wrongful filing of appeal under service tax under Section 35F of the Central Excise Act - admissibility of refund or transfer of credit.
Whether the appeal filed by the appellant is maintainable before this Tribunal or otherwise? - HELD THAT:- A creation of statute like CESTAT cannot traverse beyond what has been explicitly provided within the governing statute. Thus, in view of explicit statutory provisions, discussed supra, regarding the appeal before CESTAT, the impugned order issued by Superintendent-Registry cannot fall under the purview of CESTAT.
Admissibility of the refund/transfer of credit etc., on merit under Section 140 or 142 - HELD THAT:- It cannot got into merit of the refund claim without first deciding the maintainability of appeal itself before this Tribunal and retrain from expressing any view on the merit of case in so far as it relates to transfer/refund of credit.
Therefore, without getting into the eligibility of refund or transfer under Tran-A or otherwise in the facts of the case, on the short question of maintainability of this appeal before this Tribunal itself, the appeal is liable to be dismissed - Appeal is dismissed being non-maintainable.
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2024 (8) TMI 852
Classification of service - manpower supply service or support services of business treating it as Data Entry Services? - invocation of extended period of limitation.
Classification of service - HELD THAT:- It is not in dispute that the appellants believed that the said service falls under the category of manpower supply services. It is also not in dispute that M/s. BSNL also believe that the said service is manpower supply services. The Chartered Accountant has confirmed that M/s.BSNL has paid the service tax throughout for this transaction. In these circumstances, even if the said service is treated as a service other than manpower supply service, the demand cannot be confirmed in view of the decision in the case of MANDEV TUBES VERSUS COMMISSIONER OF CENTRAL EXCISE, VAPI [2009 (5) TMI 102 - CESTAT, AHMEDABAD].
Ld. Authorised Representative has relied on the decision of Hon’ble Apex Court in the case of Om Sai Fabricators [2023 (7) TMI 1064 - SC ORDER]. It is seen that the said case relates to the liability of service tax payment of sub-contractor vis-à-vis the payment of service tax by the main contractor. It is seen that the facts in the said case was different and the situation is not necessarily revenue neutral like in the instant case. Therefore, the said case is not applicable to the instant situation.
Invocation of extended period of limitation - HELD THAT:- From the facts of the case, it is apparent that the appellant bonafidely believe that the said services fall under the category of manpower supply services and the service tax was being regularly paid by the service recipient. Therefore, invocation of extended period of limitation was also not justified.
Appeal allowed.
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