|
Advanced Search Options
Service Tax - Case Laws
Showing 461 to 480 of 30277 Records
-
2024 (8) TMI 209
Maintainability of writ petition - Levy of service tax - respondent-University being an ‘educational institution’ - taxability of income from affiliation and allied functions.
Respondent-University, ‘educational institution’ or not - HELD THAT:- The income earned by the University on account of specified educational services is not within the tax net because of Negative List. However, the income earned by the University by any other activity like renting out buildings, etc. is within the taxability, unless the same falls in the Exemption Notifications issued by the Central Government u/s. 93 of the Act.
Taxability of income from affiliation and allied functions - HELD THAT:- An activity carried out without any consideration like donations, gifts or free charity ordinarily is outside the ambit of service. The concept ‘activity for a consideration’ involves an element of contractual relationship wherein the person doing the activity does so at the desire of another in exchange for a consideration. There should be something like quid pro quo. An activity done without such a relationship i.e., without the express or implied contractual reciprocity of a consideration would not be an ‘activity for consideration’ even though such an activity may lead to accrual of gains to the person carrying out the activity. Thus, an award received in consideration for contribution over a life time like Nobel Prize, Jnana Peeta, etc., will not be a consideration.
the concept of sovereign function being impertinent, does not factor in the discussion. The function related to affiliation cannot be treated as a ‘bundled service’ under clause (3) of section 66F of the Finance Act, 1994, either. The interests/fines/penalties leviable on account of default also have a thick connect with the fees regularly leviable and therefore, they would partake the character of fees only. In view of all this, the Revenue is not justified in levying Service Tax on the income accruing to the University on account of affiliation during the academic year between 2012-13 and 2016-17. The periodicity of collection of affiliation related fees pales into insignificance.
Income from non-educational activities of educational institutions and service yax liability - HELD THAT:- When an activity figures in the Negative List, the same is not liable to service tax at all. This is one scenario. The other is a case of exemption from tax by virtue of statutory notifications. Former is a case of non-applicability of charging section whereas, the latter is a case of its applicability. There lies a subtle difference between these two, and mistaking one to be other will have implications to Caesar & Citizen. Not recognising this difference, is consequential. Initial taxability of services is one thing and its exemption from tax is another - the question of exemption from tax liability arises when exempted activity/entity does not figure in the Negative List.
The respondent-University answers the definition of educational institution since it provides services that fall into sub-clause (ii) of clause (l) of section 66D of the Finance Act, 1994. In fact, the education catered by the University broadly fits into the definition of auxiliary educational services. He is also right in pointing out that an otherwise interpretation of this Exemption Notification would defeat the very purpose for which it has been issued. The said exemption is continued vide Notification No. 3/2013-ST dated 1.3.2013, as well - No contention is taken up by the Revenue as to why these Notifications should not be taken cognizance of for according benefit claimed by the Assessee thereunder. They are not shown to be contrary to the intent & policy content of the parent statute, either.
Application disposed off.
-
2024 (8) TMI 208
Valuation of service - amount paid to the guards of CISF and expenses incurred towards supply of arms and ammunitions, saftery shoes expenses etc. - includable in the amount of consideration for receiving the Security/Detective Agency Services from CISF in terms of section 67 of Finance Act 1994 read with Rule 5 of Valuation Rules, 2006 - applicability of Rule 5 of Valuation Rules, 2006 - Extended period of limitation.
HELD THAT:- In the present case the value of freebies supplied by the service recipient to the service provider and the amount of reimbursable expenses has been considered as the part of consideration assessable to tax since the demand in question has solely been confirmed by invoking Rule 5 of Valuation Rules. The decision of M/S BHAYANA BUILDERS (P) LTD. & OTHERS VERSUS CST, DELHI & OTHERS. [2013 (9) TMI 294 - CESTAT NEW DELHI-LB] and that of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] is sufficient to hold that demand is liable to be set aside the said demand. The above discussion also clarifies that the amount do not classify to be called as consideration.
The case is no more res integra. It has been consistently held that value of amenities provide to CISF by the service recipient is not required to be included in the value of services. For the period prior to 30 June 2012, the services provided by CISF were covered under forward carge. With effect from 01 July, 2012, the services are covered under RCM vide Notification No.3/2012-ST dated 20.06.2012. For the services involving same facts, involving CIST, there have been judgements to the effect that value of infrastructure made available to CISF is not includible in the value of services.
Extended period of limitation - HELD THAT:- The appellant is wrongly made liable for payment of the impugned amount of demand. There can be no reason with the appellant to not to pay the service tax liability with an intent to evade the duty - it was the incumbent duty of the department to prove the positive act of alleged fraud, suppression or wilful misstatement on part of the appellant. But except that the plea of non-payment of tax as has been considered in the impugned order, there are nothing on record which may amount to an act of suppression on part of the appellant - The allegations that appellant did not disclose the extent of taxable services in the form of ST-3 returns which amounts to concealment, also does not support the department as appellants have sufficiently established that they declared everything and every information of what they believe. As per their belief no value is attributable to the infrastructure/arms/ammunitions made available to CISF. Hence, it was inconceivable for the appellant to make any different disclosure than what they have declared. The extended period based on such allegations is held to have wrongly invoked.
The demand of service tax has wrongly been confirmed upon the appellant. Rule 5 of Valuation Rules has wrongly been invoked. The show cause notice has wrongly invoked the extended period of limitation. The show cause notice itself gets time barred. The findings of original adjudicating authority are therefore not sustainable - appeal allowed.
-
2024 (8) TMI 207
Levy of service tax with interest and penalty - reimbursement cost received from the land of owner (also a registered company) for constructing flats in execution of a ‘Joint Development Agreement’ - proportionate reversal of CENVAT Credit - extended period of limitation.
HELD THAT:- The principle is settled by this Tribunal in 2017 in the case of MORMUGAO PORT TRUST VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, GOA- (VICE-VERSA) [2016 (11) TMI 520 - CESTAT MUMBAI] that was found approval by the Hon'ble Supreme Court by way of dismissal of appeal of Revenue, where it was held that 'The money flow to the Assessee from SWPL, under the nomenclature of Royalty, is not a consideration for rendition of any services but infact represents the Appellant’s share of revenue arising out of the Joint Venture being carried on by the Assessee and SWPL.'
Thus, the reimbursable amount that was paid by one member of the joint venture and subsequently repaid by the other member would not be liable to payment of Service Tax.
Extended period of limitation - HELD THAT:- When Service Tax is held to be not payable, extended period is also not invokable, apart from the fact that in the instant case, as noticed from the relied upon document namely letter dated 27.05.2017 entire factual aspect and modus operandi was known to the Respondent-Department and no proactive action in the nature of investigation, spot visit etc. were initiated by the Respondent-Department till it sought for a detail report from the Appellant on reimbursement expenses by M/s. Bhisma Realty Ltd. through its letter dated 21.02.2022, nearly after 5 years to which Appellant had furnished the figures (₹80,17,30,712/-) as total reimbursement amount received between October, 2016 and June, 2017, on which duty was straight away demanded, that would again take the Appellant out of the purview of wilful suppression since all information were available with it and furnished by it on demand and was also produced during audit.
The order passed by the Principal Commissioner of CGST & CX, Mumbai East Commissionerate is hereby set aside - Appeal allowed.
-
2024 (8) TMI 206
Taxability - discounts/incentives received by the appellant - extended period of limitation - HELD THAT:- The relationship of the appellant, the dealer and M/s. TML is admittedly governed by the dealership agreement executed between them. Based on the scrutiny of those agreements only that the department have formed an opinion that the amount is received by the appellant for doing an act of achieving a target as specified by M/s. TML, hence, is an amount towards the consideration received for doing the said agreed act.
The issue of demand on such discount/incentives is no more res integra. This Tribunal in the case of COMMISSIONER OF SERVICE TAX, MUMBAI-I VERSUS SAI SERVICE STATION LTD [2013 (10) TMI 1155 - CESTAT MUMBAI] has held that the amount received for achieving the targets under target incentive scheme in the form of a trade discount/year end discount. This is an incentive given to encourage the dealer to buy and sell larger number of vehicles. It is not a payment for any service rendered to the manufacturer. In the present case, under the contract of sales, since the specific targets for specific quantum of sale of cars of the manufactures that the dealer is agreed to have received some amount as incentive/discount, such amounts are not towards rendering Business Auxiliary Services but the incentives are only trade discounts which are extended to the appellant for achieving the required targets.
The activity of receiving the incentives/discounts is as good as a part of trading activity and cannot be called as service as is defined under Section 65B(44) of the Finance Act. The findings of the original adjudicating authority since are contrary to the earlier decisions on the same issue, those are liable to be set aside.
Extended period of limitation - HELD THAT:- The show cause notice must contain an averment to that effect pointing out specifically as to which of the various acts or omissions stated in the act have been committed/not committed by the assessee and the adjudicating authority must specifically deal with assessee’s contention in rebuttal thereof. In the present case there is no such finding in the Order-in-Original except assuming that the amount in question is received by the appellant for rendering a taxable service. No such act is discussed which may amount to an act of suppression or concealment. Resultantly, we accept the appellant’s contention that there was no reason with the department to issue the show cause notice after invoking the extended period. The show cause notice is therefore held to be barred by time.
Thus, it is held that there was no service tax liability upon the appellant nor any alleged suppression has been committed by them. The show cause notice which has invoked almost five years period while raising the impugned demand is therefore held to be barred by time. The findings arrived at by original adjudicating authority are therefore hereby set aside - appeal allowed.
-
2024 (8) TMI 205
Short payment of service tax - Business Auxiliary Services - difference in the assessable income as perST-3 returns and comparison thereof with the value from balance sheet - HELD THAT:- For the activity of maintenance/repair by way of rendering it as a Works Contract Service, the service tax is payable on 70% of the total amount charged for Works contract. The outcome of these documents and the observations above sufficiently prove that the appellant is eligible for 70% abatement in terms of Rule 2A of Valuation Rules for providing Works Contract Service (annual maintenance services along with spare parts). The eligibility has been absolutely ignored by the adjudicating authority below.
It is observed that prior filing reply dated 23.03.2021, the appellant had also filed reply to the letter summoning response from the appellant. Vide his letter dated 27.10.2019 it was duly brought to the notice to the department that the appellant has two service tax registration numbers. One is for Business Auxiliary Service and various other services and another is for Survey and Exploration of Mineral Services. The amount in question is towards rendering Repair and Maintenance Services under the registration meant for Survey and Exploration of Mineral Services.
The balance sheet of the appellant are also on record. Perusal thereof shows that the amount in question is towards sale of services to M/s. MECL. The contention of the appellants since beginning is that they had rendered Works Contract Services to said M/s. MECL which is already found duly supported by the documents on record.
It becomes clear that the services of maintenance to be provided were inclusive of supply of spare parts/machine parts i.e. the sale of goods - the order under challenge is hereby set aside - appeal allowed.
-
2024 (8) TMI 204
Levy of service tax - activity of logistic/handling services carried out by the appellant for the customer in lieu of a consideration constituted service as envisaged in clause 44 of Section 65(B) of Finance Act, 1994 - HELD THAT:- Post 01.07.2012, in order to qualify as a ‘service’, the activity has to satisfy three limbs of the definition of service viz., there has to be a service provided by a provider to a recipient, there has to be a monetary consideration and the service has to be provided in the taxable territory of India. Logistics/Handling charges are collected while selling of cars to the customers and not otherwise. Therefore, even if one has to consider the logistics/handling charges to be a consideration for a service, it is imperative to note that this handling activity is coupled with sale of car and would be called as bundled service as defined under section 66F of Finance Act, 1994. In this context as well, we observe that receipt of logistics/handling charges is naturally bundled with sale of cars since majority of similar service providers in the industry would receive the said amounts.
Service tax is not leviable on logistics/handling charges, since sale of cars is covered under the exclusion part of service definition given under section 65B (44) of Finance Act, 1994 i.e. transfer of title in goods. Consequently, they will obviously form part of the value of the goods when they are subsequently sold and consequently sales tax/VAT would apply and not service tax.
CBEC vide its Circular No. 699/15/2003-CX., dated 5-3-2003 clarified that “it is envisaged appears that any activity of sales dealer at the pre-sale stage or at the time of sale will not come under the purview of service tax.” This circular has clearly clarified that such pre-sale charges are not leviable to service tax, and the logistics/handling activities are all pre-sale activities and hence are not leviable to service tax.
The Tribunal in INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA [2015 (1) TMI 456 - CESTAT MUMBAI] held that “whatever expenses have been incurred before transfer of the goods, form part of the sale price of goods”.
The impugned order has observed that the said charges did not form a part of sale value of the vehicle and were collected separately. However, in this context, we note that the said charges are incurred in respect of all cars which are to be sold by the dealer. The expenses incurred in this regard are passed by the original authority to the customer and collected as part of the sale value of the car. The bifurcation of the expenses and its separate accounting in the books of accounts does not amount to provision of service.
The impugned order is liable to be set aside and is accordingly set aside - Appeal allowed.
-
2024 (8) TMI 203
CENVAT Credit - availing credit on the strength of invoices which were not addressed to their registered premises - HELD THAT:- The adjudicating authority in the impugned order has observed that the value taken in the reconciliation chart submitted by the appellant is not in accordance with the values indicated in the show cause notice. It has also been observed that the appellant has not submitted any documentary evidence for verification or in support of the value shown in the reconciliation chart submitted by them. In the absence of any corroborative documentary evidence, the adjudicating authority has confirmed this demand.
It is a fact on record that the appellant submitted a reconciliation chart before the adjudicating authority, but did not submit any corroborative evidence to substantiate their claim, as has been clearly recorded in the impugned order.
It would be appropriate to remand the matter back to the original authority, giving an opportunity to the appellant to submit documentary evidences such as invoices issued during the period, along with copies of bank statement showing the advances received during that period, ledgers of the parties, copies of challans for service tax payment during the period etc. - Appeal allowed by way of remand.
-
2024 (8) TMI 202
Short payment of service tax - dropping of demand - non-imposing commensurate penalty.
Whether the Adjudicating authority had erred in dropping the demand amounting to Rs. 18,95,70,056/- for the period 2007-08 to 2011-12 & Rs. 22,47,16,252/- for the period 2012-13 on account of short payment of service tax on Works Contract Service? - HELD THAT:- The impugned order has gone on to observe that the erstwhile Rule 6 of Service Tax Rules, 1994 did not permit recovery of tax unless the payments were received. We note that the adjudicating authority has relied on the decision of the Tribunal in the case of TURRET INDUSTRIAL SECURITY PVT. LTD. VERSUS COMMR. OF C. EX. & CUS [2007 (10) TMI 148 - CESTAT, KOLKATA], wherein it was held that in terms of Rule 6(1) amount of tax payable by the assessee is to be calculated on the basis of payments received in preceding month, & tax cannot be calculated on the basis of value of services shown on an accrual basis in Profit & Loss account. The impugned order has also relied on the decision of the Tribunal in KANPUR SECURITY SERVICES VERSUS COMMISSIONER OF C. EX., KANPUR [2008 (2) TMI 78 - CESTAT, NEW DELHI], wherein it was held that service tax is leviable only on the amount received by service provider and not on amount still due from parties.
In the instant case, the adjudicating authority has relied on a CA certificate submitted by the appellant which carries a date different from what has been indicated by the department in their review order or what has been submitted by the ld. AR. Further, once the CA certificate has been submitted by the appellant, the onus shifts on the department to negate the certificate to substantiate their allegation.
Thus, unless evidence to the contrary is submitted by the department to disregard the CA Certificate, there are no infirmity with the findings in this regard in the impugned order.
In the instant case, it is on record that the appellant had submitted the required details, but the demand notice had estimated the turnover to be 150% more as compared to the previous year’s turnover. This estimated inflated demand has been rightly rejected by the adjudicating authority.
There are no infirmity in the impugned order - the impugned order is upheld - appeal dismissed.
-
2024 (8) TMI 155
Short payment of service tax - Denial of benefit of Sabka Vishwas (Legal Dispute Resolution) Scheme 2019 (SVLDRS) - denial on the ground that tax dues as per the said scheme was paid on 1st July 2020 which is after due date of 30th June 2020 - whether payment made on 1st July 2020 can be said to have been made as per SVLDR Scheme?
HELD THAT:- The objective of SVLDR Scheme has been culled out by the Co-ordinate Bench of this Court in the case of Capgemini Technology Services India Limited Vs. Union of India [2020 (10) TMI 3 - BOMBAY HIGH COURT] wherein the High Court has observed 'From a reading of the statement of object and reasons, it is quite evident that the scheme conceived as a one time measure, has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. Both are equally important: amicable resolution of tax disputes and interest of revenue. As an incentive, those making the declaration and paying the declared tax verified as determined in terms of the scheme would be entitled to certain benefits in the form waiver of interest, fine, penalty and immunity from prosecution.'
The payment whether made under a challan generated under service tax or under SVLDR Scheme would not make any difference, inasmuch as, admittedly in both the cases, it is only the correct challan which has not been filled, but the payment has admittedly been received in the coffers of Respondents’, i.e., Union of India. It is settled position that procedural irregularities cannot come in the way of substantial justice - Petitioner could not be said to have had any mala fide intention in delaying the payment by one day, since the challan generated stated the expiry date as 1st July 2020. Petitioner was, therefore, under a bona fide belief that he could make the payment on 1st July 2020 which admittedly he has paid on said date.
On the facts of the present case denying the benefit of SVLDR Scheme would not only be contrary to the objective of the Scheme, but also would be injustice to Petitioner declarant who otherwise is eligible.
Petitioner is justified in placing reliance on decisions of Coordinate Bench of this Court in the case of Innovative Antares [2023 (2) TMI 12 - BOMBAY HIGH COURT], Arjun Rampal [2023 (5) TMI 13 - BOMBAY HIGH COURT] and Sitec Labs Ltd. [2024 (6) TMI 585 - BOMBAY HIGH COURT], wherein on similar facts and after considering the decision of Supreme Court in M/s. Yashi Constructions [2022 (3) TMI 110 - SC ORDER] directed revenue to accept SVLDRS declaration when payment could not be made due to technical glitch before 30 June 2020 in contrast to decision of Single Judge of Madhya Pradesh High Court in M/s. Dinesh Kumar Yadav [2022 (11) TMI 343 - MADHYA PRADESH HIGH COURT].
Communications dated 6th September 2021 and 27th September 2021 are quashed and set aside - Respondents are directed to issue Form SVLDRS 4 to Petitioner within a period of four weeks from the date of uploading of the present order.
Petition disposed off.
-
2024 (8) TMI 154
Levy of service tax - income from profession of advocacy - HELD THAT:- The issue decided in the case of MR. PRASHANTH SREEDHAR SHENOI, V. RAGHURAMAN, ADVOCATE, SRI C.V. SUDHINDRA, SRI THURUNAS KRISHNACHARI SURESH, SHRI MANOHAR JEERIGE, SHRI MADHUSUDAN R. BIDI, VERSUS ASSISTANT COMMISSIONER OF CENTRAL TAX, BANGALORE, JOINT COMMISSIONER OF CENTRAL TAX BANGALORE, UNION OF INDIA, THE SUPERINTENDENT OF CENTRAL TAX, DSD-2 BENGALURU, THE PRINCIPAL CHIEF COMMISSIONER OF CENTRAL TAX BENGALURU [2024 (5) TMI 466 - KARNATAKA HIGH COURT] where it was held that 'individual lawyers and Partnership of firm of Advocates, Senior Advocates are exempted from payment of service tax under certain circumstances.'
The impugned order is liable to be set aside - the matter is relegated to the stage of hearing after show cause notice - petition disposed off by way of remand.
-
2024 (8) TMI 98
Non payment of service tax - Banking and other financial services - foreclosure charges - penal charges - insurance administration fees - period from 01.07.2003 to 30.03.2008 - Invocation of extended period of limitation - suppression of facts or not - interest - penalty - the CESTAT set aside the demand and allowd the appeal.
HELD THAT:- There are no reason to interfere with the judgment of the Customs, Excise & Service Tax Appellate Tribunal - appeal dismissed.
-
2024 (8) TMI 97
Gross violation of principles of natural justice - impugned order were not served on the petitioner - liability of service tax - case of the petitioner is that the petitioner is a Civil Contractor, who is not liable to tax as the petitioner has not provided any services to the Government institutions and therefore, the withdrawal of exemption under Mega exemption N/N. 25/2012-ST, dated 20.06.2012 as amended by N/N. 6/2015-ST, dated 01.03.2015 would not apply to the petitioner.
HELD THAT:- Prima facie the petitioner has been in default in complying with the requirements of Chapter V of the Finance Act, 1994, in as much as the petitioner has failed to obtain service tax registration. The fact that the petitioner has been providing civil contract service indicate that the petitioner was indeed liable to pay service tax.
The petitioner cannot blame the department as the petitioner had not given the correct particulars to the department for either issuance of the show cause notice or to the personal hearing notices thereafter or for communication of the impugned order. Prima facie the Court is of the view that the petitioner is indeed liable to pay service tax for the services provided to various private parties. Unless the petitioner is able to establish that the petitioner's turn-over was below the turn-over specified in the notifications exempting a service provided from payment of service tax, the demand cannot be questioned. The demand in the impugned order pertains to the period between 01.04.2016 to 30.06.2017.
The interest will continue to mount on the petitioner on the demands as assessment under the provisions of the Finance Act, 1994 and the Service Tax Rules, 1994 are based on self-assessed returns that were required to be filed under the provisions of the aforesaid Act and Rules.
The impugned order is quashed and the case is remitted back to the file of the 2nd respondent to pass fresh orders on merits and in accordance with law - petition disposed off by way of remand.
-
2024 (8) TMI 96
Construction of a dam or not - services of site formation and clearance, excavation and earthmoving and demolition - exemption under N/N.17/2005-ST dated 07.06.2005 - whether the services rendered by the respondents are in relation to the construction of a dam and thus, the respondents are eligible for the exemption contained in Notification No.17/2005 dated 07.06.2005? - time limitation.
HELD THAT:- The respondents rely upon the case of C.P. Systems [2023 (2) TMI 665 - CESTAT NEW DELHI] wherein the Principal Bench has upheld the order of the Adjudicating Authority in holding that standalone dam or water channel system would be quite useless unless it is combined with other structures like Hydro Electric Plant. It is found that the case involves identical facts and the Tribunal has gone into the very same question as to whether services rendered in relation to a Hydro Electric Project would amount to work rendered towards the construction of dams to be eligible for the exemption contained in Notification No.17/2005 dated 07.06.2005.
In view of the decision of the Tribunal in the case of Continental Constructions Ltd. [2018 (2) TMI 1256 - CESTAT NEW DELHI], it is found that the issue is no longer res-integra and is decided in favour of the respondents. We find that the Hydro Electric projects have no separate existence from the dams. The construction of a Hydro Electric project, pre-supposes the existence or construction thereof of a dam. The Hydro Electric projects are always associated with the dam and therefore, such dams are often referred to as multi-purpose hydel projects. Thus, there is no merit in the grounds of appeal of the Department.
Time Limitation - HELD THAT:- It is found that other than making casual allegation that the appellants intended to avoid proper discharge of service tax and suppressed the facts and did not file ST-3 Returns, Revenue has not highlighted any specific commission or omission on the part of the respondents so as to necessitate the invocation of extended period. Therefore, relying on the cases cited by the respondent and the other cases, it is opined that the respondent had bona fide reasons to believe that the services rendered by them to M/s Patel Gammon J V Engineering Ltd. are not exigible to service tax. Therefore, no case has been made by the Revenue to invoke the extended period.
There are no merit in the appeal and there are no reasons as to why the impugned order should be interfered with - the respondents have a case in their favour on merits as well as limitation - the appeal filed by the Revenue is dismissed.
-
2024 (8) TMI 95
Invocation of Extended period of Limitation contemplated under the proviso to section 73 (1) of the Finance Act, 1994 - relevant date - suppression of facts or not - recovery of service tax not levied or paid or short levied or short paid or erroneously refunded - Services rendered to STPI units - Services rendered to US Library of Congress and US Commercial Services - Service Tax on the above services during 2006-07 and 2007-08 - Utilization of Credit in excess of 20% - Short-payment of Service Tax - Non-payment of Service Tax on services rendered to SEZ units during 03.03.2009 to 20.05.2009 - Interest on late payment of Service Tax.
HELD THAT:- It would be seen from a perusal of sub-section (1) of section 73 of the Finance Act that where any service tax has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice.
Section 73 (1) of the Finance Act does not mention that suppression of facts has to be “wilful‟ since “wilful‟ precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression “wilful” before “suppression of facts” under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be “wilful‟ and there should also be an intent to evade payment of service tax.
In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT], the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since “suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty.
It is, therefore, clear that even when an assessee has suppressed facts, the extended period of limitation can be invoked only when “suppression‟ is shown to be wilful with intent to evade the payment of service tax.
The show cause notice, therefore, presumes that there was intent to evade payment of service tax merely because the appellant had not disclosed the correct service tax liability in the service tax returns. The show cause notice does not disclose why the appellant had an intent to evade payment of service tax. Merely because the correct service tax liability had not been disclosed, it cannot be presumed that there was an intent to evade payment of service tax.
The burden of proving that the appellant had suppressed facts with an intent to evade payment of service tax was clearly upon the department. It was necessary for the department to illustrate any positive act on the part of the appellant. According to the appellant, it was under a bonafide belief that it was not liable to pay service tax and the matter also involved interpretation of various provisions of the Finance Act as well as the services rendered to the SEZ Units and to the STPI Units. The appellant had been filing the service tax returns and an audit of the records of the appellant had also been conducted in 2010 for the period 2006-07 to 2009-10. The show cause notice was, however, issued on 19.10.2011 after a substantial lapse of time.
In this connection, it would be pertinent to refer to the judgment of the Supreme Court in Commissioner of C. Ex. & Customs vs. 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 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 bonafide manner.
There is no suppression of material facts from the department, much less with an intent to evade payment of service tax. The extended period of limitation contemplated under the proviso to section 73(1) Finance Act, therefore, could not have been invoked in the facts and circumstances of the case.
It will, therefore, not be necessary to examine the contention raised by learned counsel for the appellant that the order should be set aside as the time limit specified in section 73(4B) of the Finance Act had not been adhered to.
The impugned order 30.12.2016 passed by the Commissioner, therefore, cannot be sustained and is set aside - Appeal allowed.
-
2024 (8) TMI 94
Taxability - Appellant is an Authorized Branch of Punjab National Bank (PNB) that carries out Central & State government transactions for States of Punjab, Haryana & Himachal Pradesh - service provided for Discharge of Sovereign or Statutory functions of the State or not - HELD THAT:- It is found that the main services rendered by the appellant to the RBI are exempt from service tax vide N/N. 22/2006-ST dated 13.04.2006. Further, it is found that this issue is no more res integra and the Larger Bench of the Tribunal in the case of CCE & S.T. CHANDIGARH VERSUS STATE BANK OF PATIALA [2016 (10) TMI 800 - CESTAT NEW DELHI-LB] has settled the said issue and has held 'once State Bank of Patiala has been appointed as agent of RBI, it is transacting Government business which is in the nature of a sovereign function performed on behalf of the Government and hence not liable to Service Tax.'
The impugned order is not sustainable in law and the same is set aside - Appeal allowed.
-
2024 (8) TMI 93
Non-payment of service tax - Management consultancy Services (Royalty services) - Intellectual Property Right Services (IPR) - Business Auxiliary services (Job-work charges) - Banking and financial services - time limitation.
Management Consultancy service - Royalty services - HELD THAT:- The appellant has been recording the Service Tax pertaining to the Management Consultancy services amount paid to their holding company. Payment were made towards expenses incurred by the Joka unit as well as by the Baddi unit. In case of Baddi since they are not in a position to claim the Cenvat Credit. The Service Tax amount and the Management consultancy amounts have been apportioned to their expenses account. This is no way allows the department to come to a conclusion that the appellant provided any service to the Baddi unit. Therefore, on this count itself, the confirmed demand of Rs. 1,44,964,85 is required to be set aside.
Intellectual Property Right Services (IPR) - HELD THAT:- The intellectual Property Services have become exigible to Service Tax with effect from 10.09.2004. Accordingly the confirmed demand of Rs. 1,30,28,482 for the period of October, 2004 to December, 2010 and Rs. 29,52,461 for the period of January, 20111 to March, 2012 are legally not sustainable and the same is set aside on merits.
Business Auxiliary services - Job-work charges - HELD THAT:- It is found from the documentary evidence that the finished goods are emerging after the job work in terms of Sec 2(f) of the CEA 1944. Therefore, the same would not amount to rendering of service in BAS Section 65 (19) of the Finance Act, 1994. Accordingly, the confirmed demand of Rs. 3,15,625 and Rs. 4,36,398 are being set aside on merits.
Banking and financial services - HELD THAT:- It is found that no such services was rendered by the holding company to the appellant. The banking charges paid by the holding company initially was recovered from the present appellant. It cannot be viewed that banking and financial services were rendered by the company. It is also to be noted that transaction is between the company and the appellant which would amount to self service. The Tribunal in the case of Precot Mills Vs. CCE [2005 (3) TMI 594 - CESTAT, BANGALORE] has held that where the transaction is between two constituents of the same entity, there is absence of client-service provider relationship. Hence, no Service Tax is payable. Therefore, the confirmed demand of Rs. 3,39,652 set aside on merits.
Time Limitation - HELD THAT:- The appellant has been paying Service Tax on the Management Consultancy Services and were filing their ST-3 Returns. As per the normal accounting practice they have charged portion of Service Tax amount and Management consultancy services to their Baddi unit. Their bonafide belief that no Service Tax is required to be paid by them, cannot be faulted - Service Tax is actually not payable by them. Apart from this, the transactions are between the constituent entities. In such a case the party cannot be fastened with the allegation of suppression to confirm the demand for the extended period. Hence the confirmed demand in respect of the extended period is being set aside on account of time bar also.
Appeal allowed.
-
2024 (8) TMI 92
CENVAT Credit - service tax paid by them on the invoices issued by automobile dealers - it is the case of the department that the dealers have been providing insurance services to the appellants illegally against the provisions of Insurance Act, 1938 and IRDA Regulations - rejection on the ground that computer generated invoices are not signed - rejection of credit on the ground that the invoices issued by M/s. TVS Sundaram Motors (service provider) contains a different description of the service - Difference of Opinion.
HELD THAT:- In view of the difference of opinion between the Members, the questions framed for resolving the difference - As the different of opinion has been set aside by the Hon'ble High Court, the order passed by Member (Judicial) as recorded would be applicable.
Follwing was held by the member (Judicial).
Whether the appellant is eligible to avail credit of the service tax paid by them on the invoices issued by automobile dealers? - HELD THAT:- In the case on hand, the department does not dispute the payment of tax. The department has not initiated any proceedings against the dealers alleging that there are no services provided and that no tax has to be paid by them. The SCN is issued to the appellant alleging that the credit availed on such services is ineligible. The Cenvat Credit Rules,2004 provide for a mechanism to the service provider to avail and utilize credit of the tax paid on input services used for providing output services. This credit scheme ensures smooth flow of duties , eliminating the cascading effect of duties /taxes.
The very same issue came up for consideration before the Tribunal in the case of Cholamandalam MS General Insurance Company Ltd. [2021 (3) TMI 24 - CESTAT CHENNAI]. The facts and allegations are identical. The Tribunal followed the decision of the Jurisdictional High court in the case of Modular Auto Ltd. [2018 (8) TMI 1691 - MADRAS HIGH COURT] and it was held that 'It is not disputed that the dealer has paid Service Tax on the services described in the invoices. If that be so, the denial of credit at the recipient’s end cannot be justified by the Department without reopening the assessment at the dealer’s end.'
Similar view was taken by the Tribunal in the case of ICICI Lombard General Insurance Company Vs CCE, Mumbai Central [2023 (2) TMI 1093 - CESTAT MUMBAI]. It is held that after appreciating the facts and evidence, and by applying the ratio in the above decisions the denial of edit cannot be justified.
Denial of credit on the ground that computer generated invoices are not signed - HELD THAT:- The second proviso to the Rule 9 states that if the document does not contain all the particulars, but contains the details of duty or service tax payable, the description of goods or taxable service, service tax registration number, person issuing the invoice etc., the Deputy Commissioner or the Assistant Commissioner of Central Excise can verify the same and if satisfied can allow the credit. This means, when the tax paid is in order, the credit has to be allowed even though the invoice may be technically deficient for want of some particulars. In the present case, it is not disputed that the tax has been paid by the appellant. Merely because the computer generated invoice does not contain the signature, it cannot be said that the credit is ineligible. Further, for the period after 2015, the Board has clarified that signatures are not required in the case of computer generated format - credit allowed.
CENVAT Credit - rejection of credit on the ground that the invoices issued by M/s. TVS Sundaram Motors (service provider) contains a different description of the service - HELD THAT:- It is not disputed that the tax has been paid as per the invoices. Appellant who is the service recipient cannot be found fault for the description mentioned in the invoice maintained by the service provider. Appellant has no control over the accounts maintained by the service provider (dealer). The credit at the recipient’s end cannot be denied for this reason. The denial of credit on this reason is not justified.
The impugned orders are set aside - Appeal allowed.
-
2024 (8) TMI 91
Classification of service - security agency service or commercial training and coaching center services - agreement for execution of project under “Swarnjayanti Gram Swarozgar Yojana” for placement of the rural BPL youth in Bundelkhand district of Madhya Pradesh - HELD THAT:- The matter is no longer res integra as the principal bench of this Tribunal by its order in case of M/S ILFS CLUSTERS DEVELOPMENT INITIATIVE LTD. VERSUS COMMISSIONER, CUSTOMS, CENTRAL EXCISE & SERVICE TAX, NOIDA [2018 (10) TMI 1007 - CESTAT ALLAHABAD] have decided the issue wherein it has been held that the grant-in-aid received by the appellant from Government of India is not taxable under the category of commercial coaching or training service.
The impugned order in appeal is without any merit and is set aside - appeal allowed.
-
2024 (8) TMI 90
Non-payment of service tax - taxable value reflected in the ST-3 returns was less than what was shown in the Income tax returns - discrepancy on the basis of third party data - HELD THAT:- It is found that the Original authority has wrongly computed the amounts of service tax by taking the figures of Rs. 49,64,538/- as the value of services but the Original authority has not considered the payment of service tax of Rs. 5,41,582/- which is shown as an expense in the financial statement produced on record.
Further, as per the reconciliation statement which is in annexure I produced, showing wrong computation of the service tax @ 14.05% whereas the effective rate of service tax during the said Finance year was 12.36% for the months of April, 2015 and May, 2015, 14% for the period of June, 2015 till November, 2015 and 14.5% till March. But, the Original authority has calculated the service tax @ 14.5% which is wrong.
It is found that both the authorities have not examined the nature of service whether the same falls under works contract service or not
In view of these discrepancies in the impugned order, the matter needs to be remanded back to the Original authority with the direction to examine various issues raised by the appellant in their appeal, namely, correct valuation of service tax, service tax rate as applicable during the relevant period, the nature of service rendered by the appellant and thereafter pass a fresh order, after following the principles of natural justice and pass a reasoned order.
Appeal allowed by way of remand.
-
2024 (8) TMI 20
Rejection of the applications made under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) - rejection on the ground that Petitioner No.1-Firm has not paid the redemption fine of Rs.25 lakhs - HELD THAT:- The disqualification prescribed under Section 125 (1) (e), is not applicable to the facts of the Petitioners’ case therein.
The Respondents are directed to accept 9 applications made by Petitioners and intimate within a period of four weeks from the date of uploading the present judgment, the amount, if any, required to be paid by Petitioner for availing the benefit of the Scheme. Petitioner would make the payment within a period of four weeks from the date of such intimation and inform the same to Respondents. Respondents would issue a final certificate in Form SVLDRS-4 within a period of four weeks from the date of such intimation of Petitioners having made the payment.
Declaration made by two partners for settlement of penalty levied of Rs.1,75,000/- each and Rs.17 lakh each vide show cause notices dated 8th August 2007 and 21st February 2008 have been rejected on the ground that the declaration made by Petitioner No.1-Firm has been rejected - Since the Respondents are directed to accept the applications made by Firm for the reasons recorded above, the basis of rejection in the case of partners does not survive and, therefore, Respondents are directed to accept 4 applications made by partners.
Petition disposed off.
............
|
9911796707
