|
Advanced Search Options
Service Tax - Case Laws
Showing 381 to 400 of 31004 Records
-
2025 (1) TMI 680
Invocation of extended period of limitation - demand confirmed for the Financial Year 2013-14 is beyond the period of 5 years so as to be time barred or not - extended period of limitation upto five years beyond the normal period of thirty months could have been invoked.
Whether the demand confirmed for the Financial Year 2013-14 is beyond the period of 5 years so as to be time barred? - HELD THAT:- It needs to be noted that out of the total confirmed demand of Rs. 2,40,96,546/-, the demand of Rs. 2,24,43,944/- is with respect to the Financial Year 2013-14. For the respective half yearly periods for the Financial Year 2013-14, the period of five years would expire on 25.10.2018 and 25.04.2019. The show cause notice that was issued on 11.10.2019 was clearly beyond the period of five years - The service tax demand of Rs. 2,24,43,944/- is clearly barred by limitation and, therefore, could not have been confirmed - the demand of interest and penalty for the amount of service tax confirmed for the Financial Year 2013-14 is beyond the period of limitation.
Whether the extended period of limitation upto five years beyond the normal period of thirty months could have been invoked in the facts and circumstances of the case? - HELD THAT:- It is noticed that after excluding the service tax liability confirmed for the period 2013-14, only the service tax liability for the periods 2016-17 and 2017-18 would be within the normal period of limitation. - There has to be a deliberate attempt to evade payment of excise duty. The show cause notice must specifically deal with this aspect and the adjudicating authority is also obliged to examine this aspect in the light of the facts stated by the assessee in reply to the show cause notice.
In Easland Combines, Coimbatore vs. Collector of Central Excise, Coimbatore [2003 (1) TMI 107 - SUPREME COURT] the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation.
In the present case, the show cause notice merely alleges that as the appellant did not disclose proper value of taxable services in the ST-3 returns, payment of service tax amounting to Rs. 2,40,96,546/- escaped assessment resulting in contravention of various provision of the Finance Act and the Rules with intention to evade payment of service tax. Mere suppression of facts is not enough to invoke the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act. The suppression has to be with an intent to evade payment of service tax and for this purpose the show cause notice must specifically allege why the assessee has suppressed facts with intent to evade payment of service tax - The extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act, therefore, could not have been invoked in the facts and circumstances of the case.
The demand for service tax on legal services of Rs. 3,105/- was upheld, while other demands were set aside.
Conclusion - Mere suppression of facts is not enough to invoke the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act - The extended limitation period requires evidence of intent to evade tax; corporate guarantees without consideration are not taxable.
Appeal allowed in part.
-
2025 (1) TMI 679
Levy of penalties under Sections 76, 77 and 78 of the Finance Act, 1994 - service tax liability for services received from outside India applies for the period prior to the insertion of Section 66A of the Finance Act, 1994, i.e., before 18.04.2006 - HELD THAT:- During the relevant period, the applicability of Section 66A was not clear as to whether service tax is to be paid on the services received from out-side India. The said controversy was set at rest by the Hon’ble Bombay High Court in the case of INDIAN NATIONAL SHIPOWNERS' ASSOCIATION VERSUS UNION OF INDIA [2009 (3) TMI 29 - BOMBAY HIGH COURT]. By relying upon the said decision of Hon’ble Bombay High Court, the learned Commissioner has also given the benefit and confirmed the demand only for the period from 18.04.2006 to 31.12.2006 which the appellant has already paid alongwith the interest.
It has been held by the Hon’ble Punjab & Haryana High Court in the case of M/S CITY CABLE, BATHINDA VERSUS COMMISSIONER OF CENTRAL EXCISE, LUDHIANA [2016 (2) TMI 961 - PUNJAB AND HARYANA HIGH COURT] that simultaneous penalty under Sections 76 and 78 is not warranted.
Conclusion - There was no intention to evade the service tax, therefore, imposition of penalties is not warranted.
Appeal allowed.
-
2025 (1) TMI 678
Classification of services - Works Contract Service or Erection, Commissioning & Installation Service? - suppression of facts or not - invocation of extended period of limitation.
HELD THAT:- In the present case, it is admitted fact that the contracts awarded to the appellant are composite in nature because the department has itself extended the benefit of abatement @67% in terms of Notification No. 1/2006-ST dated 01.03.2006. We also find that this issue is no more res integra and the Tribunal in various decisions has consistently held that once the alleged service falls under the category of ‘Works Contract Service’, the same cannot be taxed under ‘Erection, Commissioning & Installation Service’. In this regard, we may refer to the decision of this Tribunal in the case of BAJRANG LAL GUPTA VERSUS CCE- GURGAON [2023 (6) TMI 246 - CESTAT CHANDIGARH], wherein the identical issue was involved and the Tribunal after considering the submissions and ratios of the various decisions, has held 'even for the period after 01.006.2007, various decisions of the Tribunal have consistently held that the composite contract or works contract service even after 01.06.2007 cannot be taxed under Construction of Complex Service under Section 65 (105) (zzh) read with Section 65 (30a) of the Finance Act, 1994.' - thus, rendering of service in respect of roads is also not exigible to service tax being specifically excluded from the definition of ‘Works Contract Service’.
Invocation of Extended period of limitation - HELD THAT:- The invocation of extended period in the present case is also not warranted because the appellant had a bona fide belief that no service tax was liable on him as he was providing the services to various government departments and the services were not being used for the purpose of business or commerce.
Conclusion - i) Composite contracts should be classified under 'Works Contract Service' post-01.06.2007, and services related to roads are excluded from service tax. ii) Extended period of limitation is not invoked.
Appeal allowed.
-
2025 (1) TMI 677
CENVAT Credit of service tax paid to Deposit Insurance And Credit Guarantee Corporation for insuring deposits - HELD THAT:- The Larger Bench in M/S STATE BANK OF PATIALA VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, CHANDIGARH-II [2024 (11) TMI 1410 - CESTAT CHANDIGARH (LB)] has observed 'The insurance service provided by the Deposit Insurance Corporation to the banks is an “input service” and CENVAT credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering “output services”.'
Appeal allowed.
-
2025 (1) TMI 676
CENVAT Credit - inputs - mining services - demand for reversal of Cenvat credit on dumpers and tippers was correct - HELD THAT:- There is no dispute about the fact that the earthmoving equipments such as dumpers and tippers are being used by the respondent to provide the output services of mining. The demand has been dropped considering these dumpers and tippers to be covered under the definition of inputs given under 2(k) of the Cenvat Credit Rules, 2004 to mean there is no dispute about the fact that earth moving equipments such as dumpers are being used by the respondent to provide output service. The dumpers even if classifiable under Chapter 87, can be considered within the definition of inputs, as per Rule 2(k) of the Cenvat Credit Rules, 2004.
Exclusion clause of this definition applies to light diesel oil, high speed diesel oil, motor spirit and motor vehicles. It is observed that despite this definition, the dumpers and tippers are held to not to be considered as motor vehicle by Hon’ble Apex Court in the case of Belani Ores Ltd. Etc. Vs. State of Orissa Etc. [1974 (9) TMI 115 - SUPREME COURT] wherein it has been observed 'The mere fact that there is no fence or barbed wire around the leasehold premises in not conclusive. There is evidence to show that the public are not allowed to go inside without prior permission, there are gates and a check on ingress andegress is kept by guards who also ensure that no authorised persons have access to the mining area.'
Hon’ble Apex Court in the case of Boving Fouress Ltd. Vs. Commissioner of Central Excise, Chennai [2006 (8) TMI 189 - SUPREME COURT] has held that the principle laid down by Tribunal in one case if accepted by the department, the department is not entitled to raise the same point in other cases. It cannot pick and choose the issues. The demand was ordered to be set aside by Hon’ble Apex Court in the said case on this sole ground.
Conclusion - The dumpers and tippers used exclusively in mining operations qualify as inputs under Rule 2(k) of the Cenvat Credit Rules, 2004, allowing for Cenvat credit eligibility.
There are no reason to differ with the findings in the impugned order considering the dumpers and tippers used by the respondent while rendering the Mining Services, as inputs. For which the Cenvat credit is held to have rightly been availed - appeal of Revenue dismissed.
-
2025 (1) TMI 633
Refund of service tax - contrary to the Provisions of Section 11B of Central Excise Act, 1944 or not - principles of unjust enrichment - classification of service under “Commercial and Industrial Construction Service” and later under “works Contract Service”.
Whether the services rendered by the respondent/assessee is liable for payment of service tax? - HELD THAT:- It is not disputed by the revenue that the Kerala Water Authority is not a wing of the Government or a Government of Kerala Enterprise. The allegation in the show cause notice was that the assessee did not produce supporting documents for exemption of service tax. The reply given by the assessee ought to have been accepted by the adjudicating authority as the assessee, in no uncertain terms, stated that the question of claiming exemption does not arise since the service involved does not fall within the scope and ambit of taxable service - The Circular dated 15th September 2009 was issued on a reference being received by the Board with regard to the issues as to what would be the correct meaning of the commercial or industrial construction services as per Section 65 (25b) of the Finance Act, 1994. It was clarified by the Board that the essence of the definition is that the commercial or industrial construction service is chargeable to service tax if it is used, occupied or engaged either wholly or primarily for the furtherance of commerce or industry. As the canal system built by the Government or under Government project is not falling under commercial activity, the canal system built by the Government will not be chargeable to service tax. This Circular was taken note of by the Tribunal in yet another Circular dated 24.5.2010.
When the factual position is not in dispute namely, that the assessee has performed the work for the Kerala Water Authority, which is undoubtedly a Government/Government undertaking and the project was aimed at providing civic amenities to the public at large, it can never be termed to be a commercial or an industrial project. Furthermore, the revenue does not dispute the fact that the Kerala Water Authority is the State Government authority under the Public Health and Engineering Department of Kerala State Government and the project was aimed to provide civic amenities to the public at large, namely the citizens of Thiruvananthapuram city and if that be the admitted factual situation, the Water Supply Board cannot be said to be a project for the purpose of profit - The learned Tribunal holding that the service, which was rendered by the assessee to the Kerala Water Authority, will not be a taxable service under Works Contract Services.
Whether the other issues regarding the applicability of provisions of Section 11B of the Central Excise Act, 1944, is a case of unjust enrichment? - HELD THAT:- Admittedly, the amount which was paid by the assessee on a mistaken impression that the activity undertaken by them would attract service tax was not a payment under the Act and therefore, the question of Section 11B getting attracted would not arise. Identical issues arose for consideration before the High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [2012 (7) TMI 22 - KARNATAKA HIGH COURT]. The Hon’ble Division Bench after noting several decisions held 'When once there was no compulsion or duty cast to pay this service tax, the amount of Rs. 1,23,96,948/- paid by petitioner under mistaken notion, would not be a duty or “service tax” payable in law. Therefore, once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act.' - the question of Section 11B of the Central Excise Act, 1944 would not stand attracted to the facts and circumstances of the case.
Principles of unjust enrichment - HELD THAT:- It was never the case of the department that the assessee had opposed on the tax liability. In any event, when tax was not payable under the Act and when Section 11B of the Act would not apply, the theory of unjust enrichment would not stand attracted.
Conclusion - The taxes paid by mistake are not subject to Section 11B and that unjust enrichment does not apply when the tax was not legally owed.
The learned Tribunal was right in allowing the assessee’s appeal and setting aside the order passed by the adjudicating authority as well as the first Appellate Authority - Appeal dismissed.
-
2025 (1) TMI 632
CENVAT Credit - failure to consider the fact that the respondent had never taken registration under Rule 3 of Service Tax (Registration of Special Category of persons), 2005 and as such disputed its own observation that the respondent is an Input service distributor - non-consideration of fact that the respondent have taken credit on the basis of internal statements which is not a valid document for taking credit under Rule 9 (I) of the Cenvat Credit Rules, 2004 - levy of penalty u/s 78 of FA.
HELD THAT:- The adjudicating authority found that there is no need to dispute input service credit and therefore, there cannot be any requirement to take registration as “Input Service Distributor”. More importantly, the Tribunal noted that the bank is a nationalized bank and a Government of India Undertaking and therefore, there cannot be any malafide intention to evade payment of duty. Moreover, the respondent bank is registered with the Service tax Department and is paying service tax on the various services provided by them. They have always paid the taxes as and when applicable on time and all the returns have been filed on time and all the activities are known to the department and in the draft show cause notice it is no where mentioned that the assessee has ever defaulted in the past or is a regular defaulter in respect of the payment of service tax on the services provided by them. Furthermore, the Tribunal found that the Superintendent, Service Tax having jurisdiction over the respondent/assessee has categorically stated that since the credit is availed by the Braches and Regional offices based on invoices provided by service provider, there is no irregular availment of CENVAT credit. Furthermore, the Tribunal noted that there were audit conducted in the past and the audit team scrutinized the records of the bank and the department was fully aware of the bank’s activities.
Levy of penalty u/s 78 of FA - HELD THAT:- The Tribunal found that there was no allegation of any non-levy or non-payment or short-levy or short-payment and/or erroneous refund of service tax and none of the activities of the respondent/assessee is hit by any of the clauses (a) to (e) of Section 78 of the Act. Thus, on facts the Tribunal was satisfied that the finding rendered by the adjudicating authority was categorical and the same does not call for interference.
Conclusion - The procedural requirements like registration should not impede the substantive rights of entities to claim Cenvat credit when there is no evidence of malafide intent or procedural non-compliance.
Appeal dismissed.
-
2025 (1) TMI 631
Short payment of service tax - Cargo Handling Service - Manpower Recruitment and Supply Agency Service - Time limitation - HELD THAT:- The SCN is categorical in stating that during 2003-04 to 2006-07, the appellants surrendered Cargo Handling Service to M/s PACL, Naya Nangal and rendered the service of Manpower Recruitment and Supply Agency during the period 2007-08, it was incorrect on the part of the learned Commissioner to confirm the demand on “Manpower Recruitment and Supply Agency Service” for the period 2003-04 to 2006-07.
Extended period of limitation - HELD THAT:- Nothing has been brought forth as evidence to show that the appellants have indulged in suppression of facts etc. with intent to evade payment of duty so as to necessitate the invocation of the extended period. It is also the case of the Revenue that the appellants were registered with them and were paying service tax and therefore, there was short payment of service tax; in the light of the fact that the appellants have been paying service tax and were filing the Returns and in the absence of any evidence to allege suppression etc., the Revenue has not made any case for invocation of extended period.
Conclusion - i) The demand for "Manpower Recruitment and Supply Agency Service" for 2003-04 to 2006-07 was set aside. ii) Revenue has not made any case for invocation of extended period.
Appeal allowed.
-
2025 (1) TMI 630
Liability of service tax - CENVAT Credit of service tax paid by ART on the services which it had rendered to PJL - time limitation.
Whether PJL had rendered taxable services to Shrawan and hence was liable to pay service tax as required? - HELD THAT:- PJL was registered as a cement manufacturer and had been filing excise returns but it had not disclosed to the Department the fact that it was providing mining services nor did it obtain the service tax registration. Scrutiny of returns by the excise officers or by the excise audit teams naturally will be confined the excise part of its work. When PJL had not even intimated the department about the services which it was rendering nor had it taken any registration nor paid service tax nor filed the service tax returns, PJL had clearly suppressed all facts related to rendering of mining services to Shrawan and not paying service tax on them.
The services were rendered by PJL to Shrawan whose final product was limestone which was an exempted good. Shrawan was not rendering any service. Thus, the service tax which PJL had to pay would have had to be borne by PJL or Shrawan. Shrawan could not have availed credit of the service tax, if it was paid, because its final product- limestone- is an exempted good - the demand of service tax from PJL along with interest and penalties need to be sustained.
Whether CENVAT credit is available of service tax paid by ART on the services which it had rendered to PJL, treating them as input services for manufacture of cement? - input services - HELD THAT:- While dealing with the service tax issues in this order, nobody can quarry or mine except under a licence given under the MMD Act. In case of minor minerals, including limestone, the licence can be granted by the State Government. Government of Madhya Pradesh granted the mining lease to Shrawan stipulating that it cannot be transferred without consent of the Government. We have already found that it was not transferred and the lease continued to be with Shrawan. Therefore, Shrawan alone was authorized to mine limestone, which he could do by himself or using contractor - The cement manufactured by PJL is an excisable product and PJL is entitled to take CENVAT credit of inputs and input services used in or in relation to manufacture of cement. The services rendered by ART to PJL were in relation to the services which PJL had rendered to Shrawan and the exempted goods limestone produced by Shrawan. The services rendered by ART clearly had no correlation to the manufacture of cement. Therefore, the finding in the impugned order that CENVAT credit was wrongly availed by PJL on the services rendered by ART treating it as input service for manufacture of cement is correct and needs to be sustained.
Time limitation - HELD THAT:- CENVAT credit irregularly taken can be recovered under Rule 14 of CCR and the provisions of section 11Aof the Excise Act apply mutatis mutandis to such recovery. Therefore, the time limits prescribed under section 11A of Excise Act also apply to recovery of irregularly availed CENVAT credit under Rule 14 of CCR. It provides for invoking extended period of limitation of five years if duty was not levied or not paid or short levied or short paid or erroneously recovered by reason of fraud or collusion or wilful misstatement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of duty. To recover irregularly availed CENVAT credit by invoking extended period of limitation under Rule 14 of CCR, one of these aggravating factors must be established.
There is also no obligation to disclose to the department the details of the invoices or services on which credit was taken. It was open to the officer who is mandated to receive the ER1 return to call for further information and details and if he had sought and PJL had concealed the details, it would have been a different case. Nothing in the records suggests that the officer scrutinizing the Returns had sought any information which was not given. Therefore, PJL had no obligation to disclose the details which it is said to have not disclosed. This cannot be termed suppression of facts to invoke extended period of limitation.
Penalty under Section 11AC read with Rule 15 of CCR - HELD THAT:- The legal requirement to impose penalty under section 11ACof Excise Act is the same as the requirement to invoke extended period of limitation, i.e., the wrong availment of CENVAT credit is because of fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with intent to evade payment of duty. Since it is found that extended period of limitation was wrongly invoked, we also set aside the penalty imposed under Section 11AC of the Excise Act read with Rule 15 of CCR.
There is no dispute that ART had provided services to PJL, issued tax invoices and paid service tax on such services. Therefore, there was nothing improper, let alone illegal or irregular in ART issuing such invoices to PJL. In fact, it was required to pay service tax and issue invoices. The fact that PJL used such invoices to take CENVAT credit wrongly treating it as an input service for manufacture of cement is an altogether different matter. Neither the issue of invoices by ART was incorrect nor can Pradeep, Manish and Ashish be accused of abetting issue of such an invoice. Clearly, the penalties imposed on them under Rule 26(2)(ii) of Excise Rules cannot be sustained and need to be set aside.
Conclusion - i) Shrawan was and continued to be the lease holder of Ramasthan mines and this lease was neither consented to be transferred by the Government of MP, nor was it actually transferred to PJL. ii) The sale of the limestone for each consignment took place when PJL issued purchase orders and Shrawan supplied the limestone at the crushing site of the PJL. iii) PJL neither paid service tax on the services which it had rendered to Shrawan nor filed any return nor had it taken registration under service tax. It thus, suppressed these facts with an intent to evade paying service tax. iii) The demand of service tax , interest and penalties on PJL must be sustained. Considering the role played by Pradeep, Manish, Ashish and Shrawan, the penalties imposed on them under sections 77 and 78Aof the Finance Act must be upheld. iv) The services rendered by ART to PJL were not in or in relation to the manufacture of cement by PJL. Therefore, no CENVAT credit of the service tax paid by ART is admissible as 'input service' to manufacture of cement by PJL. v) The irregularly availed CENVAT credit must be recovered but only within the normal period of limitation as the ingredients to invoke extended period of limitation are not present. vi) Penalties imposed on Pradeep, Ashish and Manish under Rule 26(2)(ii) of the Excise Rules, 2002 cannot be sustained and need to be set aside.
Appeal disposed off.
-
2025 (1) TMI 629
Liability of appellants, as individual co-owners of a jointly owned immovable property to pay service tax - rent received from leasing the property - benefit of the threshold exemption limit under Notification No. 6/2005-S.T., dated 1-3-2005 - HELD THAT:- Though, learned Authorized Representative submits that the impugned case is different from the cases decided by the Tribunal inasmuch as both the appellants are Kartas in the same HUF - It is found that this fact will not alter the position of the appellants being joint owners and receiving rent separately. This Bench has decided the issue in the case of RAMESH KUMAR CHAUDHARY, SANTOSH CHAUDHARY, SANJAY CHAUDHARY, VIJAY CHAUDHARY VERSUS COMMISSIONER OF SERVICE TAX, DELHI-IV [2024 (12) TMI 1025 - CESTAT CHANDIGARH] where it was held that 'service tax cannot be recovered from the appellants in a combined fashion. If considered individually, the appellants are eligible for the benefit of exemption contained under Notification. No. 06/2005-S.T dated 01.03.2005.'
Conclusion - i) The appellants are eligible for the service tax exemption individually; they are not an association of persons. ii) Co-owners receiving rent individually are entitled to separate threshold exemptions.
Appeal allowed.
-
2025 (1) TMI 628
Recovery of wrongfully availed CENVAT Credit with interest and penalty - input service or not - Commissions/Brokerage paid to Commission Agents on sale of flats - violation of Rule 2(1) and 3 of the Cenvat Credit Rules, 2004 - invocation of Extended period of limitation - HELD THAT:- The issue is no longer res integra and has been decided in series of decisions by this Tribunal. One of such decision is in favour of the asessee itself in the case titled as CGST, C & CE, Alwar Vs. Krish Icon [2018 (7) TMI 97 - CESTAT NEW DELHI]. In the said case, the learned Member considered the earlier decision of the Tribunal in the case of Essar Steel India Ltd. Vs. Commissioner of Central Excise & ST, Surat-I [2016 (4) TMI 232 - CESTAT AHMEDABAD], which was passed holding that Explanation to Rule 2(l) of the Rules inserted vide Notification No.2/2016-CX (NT) dated 03.02.2016) is declaratory in nature and retrospectively effective.
Revenue also placed on record the latest decision of this Tribunal in The Commissioner, Central Goods & Service Tax, Jaipur Vs. M/s.Bharti Hexacom India Ltd. [2023 (5) TMI 520 - CESTAT NEW DELHI], where also the Department’s appeal was rejected observing that the assessee is entitled to avail the cenvat credit of service tax discharged on the Commission paid by the respondent to the Collection Agents for collection of dues of post-paid plans from the subscribers, relying on the provisions of Explanation inserted to Rule 2 (l) on 03.02.2016.
Conclusion - The respondent is entitled to avail the cenvat credit on service tax paid as Commission Agents on sale of flats.
Appeal dismissed.
-
2025 (1) TMI 627
Valuation of service tax - addition of certain reimbursable expenses in the value of taxable services provided by the appellant - HELD THAT:- The issue with regard to the addition of such reimbursable expenses in the value of the taxable services provided for the period prior to 2015 has been considered by Hon’ble Delhi High Court and then by Hon’ble Supreme Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT]. By the said decision Hon’ble Supreme Court have quashed the provisions of Rule 5 provided for addition of such reimbursable expenses in value of taxable services is beyond the power conferred under Section 67.
Conclusion - The reimbursable expenses should not be included in the taxable value unless explicitly provided by statute.
Appeal allowed.
-
2025 (1) TMI 626
Invocation of extended period of limitation under the proviso to section 73(1) of the Finance Act, 1994 for demanding service tax for the periods April 2008 to March 2012 and April 2012 to March 2013 - willful suppression of facts or not - HELD THAT:- Mere suppression of facts is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked. Thus, mere non disclosure of the receipts in the service tax return would not mean that there was an intent to evade payment of service tax.
In THE COMMISSIONER, CENTRAL EXCISE AND CUSTOMS AND ANOTHER VERSUS M/S RELIANCE INDUSTRIES LTD. AND COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S RELIANCE INDUSTRIES LTD. [2023 (7) TMI 196 - SUPREME COURT], the Supreme Court held that if an assessee bonafide believes that it was correctly discharging duty, then merely because the belief is ultimately found to be wrong by a judgment would not render such a belief of the assessee to be malafide. If a dispute relates to interpretation of legal provisions, it would be totally unjustified to invoke the extended period of limitation. The Supreme Court further held that in any scheme of self-assessment, it is the responsibility of the assessee to determine the liability correctly and this determination is required to be made on the basis of his own judgment and in a bona-fide manner.
An assessee may genuinely believe that duty is not leviable, while the department may believe that duty is leviable. The assessee may, therefore, not pay duty in the self-assessment carried out by the assessee, but this would not mean that the assessee has wilfully suppressed facts. To invoke the extended period of limitation, atleast one of the five necessary elements must be established and their existence cannot be presumed merely because the assessee is operating under self assessment - merely because facts came to light only during the audit does not prove that there is an intent on the part of the assessee to evade payment of duty.
There is, therefore, no reason as to why the show cause notice should have been issued beyond the normal period of limitation for the period from April 2008 to March 2012, nor there is any justification for issuing the show cause notice dated 22.10.2014 for the subsequent period from April 2012 to March 2013. It is, therefore, clearly a case where the facts were in the knowledge of the department and the department cannot allege that facts had been suppressed. In any case, even if it is assumed that facts were suppressed by the appellant then too no reason has been assigned in the orders passed by the Joint Commissioner or the Commissioner (Appeals) that such suppression was with an intent to evade payment of service tax.
Conclusion - The extended period of limitation contemplated under the proviso to section 73 (1) of the Finance Act could not have been invoked in the facts and circumstances of the case.
Appeal allowed.
-
2025 (1) TMI 606
Levy of service tax - Supply of Tangible Goods Service - whether the rights of possession and effective control of the packaging material in this case vest in Volvo or in the Appellant? - HELD THAT:- There is nothing on the record which regulates the manner in which the Appellant may use the packaging material once it has been delivered to the Appellant. By means of the operative data system, it is true that Volvo has information in its position as to the status of the packaging material. However, this information does not appear to rise to the level of conferring upon Volvo either control or possession over the packaging material. Once the packaging material is delivered to the Appellant, the Appellant is free to use such packaging material in such manner as it thinks fit for packing such goods as it thinks fit and for transporting such goods from such places as it thinks fit. It would also appear that there is nothing that saves the Appellant from liability in respect of any damage that occurs to the packaging material when such material is in the use of the Appellant. Therefore, it cannot be said that the Appellant merely has custody over the goods. It has both possession and control over them in addition to the right of use.
It is found that a similar view has been taken by a coordinate bench of this Tribunal in comparable facts in the case of CARAVEL LOGISTICS PVT. LTD. VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI. [2024 (7) TMI 1582 - CESTAT CHENNAI] where the five-fold test formulated by the Hon’ble Supreme Court in Bharath Sanchar Nigam Ltd. (BSNL) Vs. Union of India [2006 (3) TMI 1 - SUPREME COURT] was applied, to hold that the supplier of the containers in that case had transferred possession and control to the recipient thereof.
Conclusion - The transactions in question do not constitute the service of the “Supply of Tangible Goods” as defined in Section 65(105)(zzzzj) of the Finance Act, 1994.
Appeal allowed.
-
2025 (1) TMI 548
Challenge to SCN - SCN has been issued without authority and jurisdiction in violation of Section 73 (1) and Section 83 (A) of the Finance Act, 1994 - SCN raising a demand of service tax issued to the Petitioner is not preceded by a pre-consultation notice - HELD THAT:- Whether pre-consultation as contemplated under the aforesaid Master Circular is mandatory or otherwise, has fallen for consideration of various High Courts. What is important atleast for us at this stage, is a decision of the High Court of Delhi in the case of Amadeus India Pvt. Ltd. Versus Principal Commissioner, Central Excise, Service Tax and Central Tax Commissionerate [2019 (5) TMI 669 - DELHI HIGH COURT]. The Delhi High Court, by this decision, interalia held that pre-consultation is mandatory before issuance of the Show Cause Notice. Since in the facts of the case before the Delhi High Court, a pre-consultation notice was not issued, the impugned Show Cause Notice was set aside and the Court relegated by the parties to the stage prior to the issuance of the impugned show cause notice.
In the present case, the issue raised is only with reference as to whether pre-consultation is mandatory or otherwise, and if so, what would be its effect. Since this issue is pending in several other Writ Petitions pending in this Court, coupled with the fact that the decision of the Hon’ble High Court is pending consideration before the Hon’ble Supreme Court, it is found that an arguable question is raised in the present Petition. Accordingly, Rule is issued. It is clarified that Rule is issued only on the limited aspect whether pre-consultation is mandatory or otherwise, and if it is held so, whether the Department can be allowed to proceed on the basis of the current show cause notice or whether they would have to issue a fresh show cause notice. Rule made returnable on 4th February 2025.
List the above Writ Petition along with Writ Petition No.822 of 2021 and other connected matters.
-
2025 (1) TMI 547
Disallowance of ineligible CENVAT credit - recovery with interest and penalty - whether SCN issued to the petitioner is valid in light of the Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019? - HELD THAT:- It appears that petitioner had attempted to settle the dispute and had filed a declaration in Form SVLDRS – 1 stating that the petitioner was in arrears of tax for a sum of Rs. 64,32,402/-. The declaration filed by the petitioner in SVLDRS – 1 was also acknowledged. Later the respondent issued Form SVLDRS – 3 dated 28.02.2020. It appears that after the receipt of the SVLDRS – 3 dated 28.02.2020, the petitioner has also paid the tax amount pursuant to which SVLDRS – 4 has been issued to the petitioner which is a final Discharge Certificate as is contemplated under Section 127 of the Finance Act No.2 Act, 2019 read with Rule 9 of the Saba Viswas (Legacy Dispute Resolution) Scheme, 2019.
After the Discharge Certificate was issued, the Department had issued a Notice dated 07.02.2022 bearing Reference C.No.V/15/05/2020 – Adj.Ch.Outer, wherein, a reference is made to the impugned Show Cause Notice dated 06.02.2020. Therefore, issuance of Form SVLDRS – 3 and the question of unsettling the case settled under the provisions of the Chapter V of the Finance Act 2 of 2019, the contentions that Sabka Viswas (Legacy and Dispute Resolution) Scheme, 2019 cannot be countenanced.
Petition allowed.
-
2025 (1) TMI 546
Classification of service received by the appellant from an overseas supplier - Consulting Engineer Services or Supply of Tangible Goods Services? - invocation of extended period of limitation - HELD THAT:- The impugned order notes that the services received by NIKO includes operating the rig with the personnel of HAES, providing project management, providing campsite, man-power planning etc., The ‘Production Sharing Contract' entered with the Government by NIKO is to explore the presence of Hydrocarbons and exploration of oil and natural gas. The impugned order does not find that the service is one of hiring of rigs, ruling out the possibility of classification of the service as ‘supply of tangible goods’. Instead, it was held to be more akin to technical assistance in the pursuit of finding Hydrocarbon. The activity was felt to be in the nature of advice, consultancy or technical assistance and found to satisfy the definition of ‘consulting engineer’ service as per section 65(31) which was a taxable for providing service as defined under section 65(105) [(g) of the Finance Act 1994.
In CIT Vs Bharti Cellular Ltd. [2008 (10) TMI 321 - DELHI HIGH COURT], the Hon’ble High Court of Delhi has observed that the word "consultant" is a derivative of the word "consult" which entails deliberations, consideration, conferring with someone, conferring about or upon a matter. Hence it is seen that what is envisaged from a consultant is merely the provision of advisory services and not the actual performance of the operation function. The 28 personnel provided by HAES for the Project include Rig/ Project Manager, Rig Superintendent, Night Tour Pusher, Driller, Assistant Driller, Chief Mechanic, Chief Electrician, Safety Officer, Medic, welder, Electrician helper, Mechanic helper, Roustabout, Crew bus Driver, Fork lift operator and Crane operator. They are hardly the type of persons who can be expected to advice or provide consultancy or technical assistance.
In Basti Sugar Mills Co. Ltd. vs. CCE Allahabad [2007 (4) TMI 25 - CESTAT,NEW DELHI] the Tribunal held that the role of a consultant is to render advice, consultancy and technical assistance in the matters in which he possesses expertise. However, the decision of acceptance or otherwise of the advice is left to the management and the consultant is not authorized to impose the advice rendered. This is not the case as gleaned from the agreement. Hence while the agreement involves a host of services, the dominant intention of the contract is for providing operational services i.e. providing Drilling Rig along with personnel and related services to NIKO for its exploration activities of Cauvery Block in India and not for the services of ‘consulting engineers’. This being so revenue has failed to prove its allegation that the classification of the service is that of ‘consulting engineer’ service as per section 65(31) of the Finance Act, 1994.
Conclusion - i) The services were incorrectly classified as 'Consulting Engineer Services' and should be under 'Supply of Tangible Goods Services'. ii) Reimbursements for expenses are not subject to service tax. The burden of proof lies with the revenue to justify tax claims and penalties.
Appeal disposed off.
-
2025 (1) TMI 545
Refund of service tax paid on educational course imparted - refund rejected on the ground that course curriculum for obtaining qualification was not recognized by the Open University for the relevant period as they entered into an agreement only on 30.03.2015 after which certificates were issued but dues were already collected from the students - doctrine of unjust adjustment - time limitation.
HELD THAT:- This refund application pertains to a period for which there was no formal recognition granted to the assessee by the open university (YCMOU) prior to 31.03.2015 and the letter dated 20.06.2016 tried to provide a post facto approval to the prior period which is not in conformity to sub section 143 of 66D of the Finance Act for the reason that sample copy of certain mark sheets and certificates issued in 2015 by the Registrar, YCMOU as filed at page 57-58 of the appeal paper book would go to show that the batch was enrolled in 2014, though certificates were issued in 2016 which is admittedly after the grant of recognition.
Going by the strict interpretation of clause (l)(ii) of section 66D, if services were provided as part of curriculum for obtaining qualification recognized by law, appellant would be entitled to avail the benefit of negative list and if the services that covered both pre and post recognition were offered after receipt of necessary recognition from the Open University, it would have been entitled to receive refund of the tax paid on providing educational services as part of curriculum only when the appellant had not collected any Service Tax from its students for that period - having regard to the fact that certificates to those students for batch of July 2014 were all issued in 2016 in the month of June, it is opined that while the entire curriculum was being imparted, appellant had not received any recognition from any university to cover itself under exemption under clause (l)(ii) of the section 66D from the Finance Act, let alone its other dispute concerning filing of refund application after the period limitation.
Conclusion - The rejection of the refund claim confirmed, holding that the courses were not exempt from service tax for the relevant period, the refund claim was barred by limitation, and the appellant failed to prove non-passing of tax incidence.
Appeal dismissed.
-
2025 (1) TMI 544
Levy pf service tax on payment made to commission agents on export of goods for period September 2013 to September 2014 under reverse charge - Revenue Neutrality - invocation of Extended period of limitation - service tax on intermediary service provided by commission agents located outside India - denial of CENVAT Credit - levy of interest and penalty.
Invocation of Extended period of limitation - HELD THAT:- The impugned order has held that as the appellant did not inform the department regarding commission paid to the foreign agent and had audit not been conducted, the said fact would not have been revealed. The appellant had suppressed material fact with an intent to evade payment of service tax. Such a finding recorded that suppression of facts is enough to invoke the extended period of limitation under the proviso to section 73 (1) of the Finance Act and there is no necessity of any intent to evade payment of service tax, is against the well settled principles. Suppression of facts has to be primarily examined whether it was wilful and with an intent to evade payment of service tax.
Hon’ble Supreme Court has held that suppression of facts has to be “wilful‟ and there should also be an intent to evade payment of service tax. The Hon’ble Supreme Court in Pushpam Pharmaceuticals Company, examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The Hon’ble Court observed that the proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since “suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty.
It is settled law that mere failure to declare does not amount to wilful suppression. There must be some positive act from the side of the assessee to find wilful suppression. In the instant case, it is an admitted fact that all the transactions were declared in the financial records and the objection arose on scrutiny of such financial documents by the audit team. The Department has not been able to establish any positive act of the appellant with an intent to evade. As that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in proviso to Section 11A of the Act.
Conclusion - The extended period of limitation cannot be invoked without evidence of wilful suppression or intent to evade tax.
Appeal allowed.
-
2025 (1) TMI 543
Invocation of Extended period of limitation - suppression of facts or not - Classification of service - works contract service or not - Elgibility for the benefits of Works Contract composition scheme and also for cum tax benefit - HELD THAT:- It is observed that the period of dispute is 2010-11 to 2011-12 and the show cause notice is dated 29.01.2016. Hence, the entire period of demand is beyond the normal period of limitation.
The proviso to Section (1) of Section 11A and 11AC of Central Excise Act which are pari-materia to Section 73(1) and Section 78 of the Finance Act, 1994 use the expressions “by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of this act or of the rules made thereunder with intent to evade the payment of duty” as the conditions that would extend the normal period of one year to five years and as would also attract the imposition of penalty. The adjudicating authority below has justified the invocation of extended period holding that there is a suppression of facts on part of the appellant.
Conscious and deliberate withholding of the information by manufacturer is necessary for invoking the extended period. If the department had full knowledge or the manufacturer had reasonable belief that he is not requested to give a particular information, only normal period of limitation i.e. 1 year is applicable.
Conclusion - The extended period has wrongly been invoked while issuing the impugned show cause notice. The show cause notice is held barred by time. Any confirmation of demand also gets hit by the technicality of limitation.
Appeal allowed.
............
|
9911796707
