|
Advanced Search Options
Service Tax - Case Laws
Showing 501 to 520 of 30277 Records
-
2024 (7) TMI 1358
Admissibility of refund claims filed by a SEZ unit for the service tax paid on input services in terms of the notifications issued under the Finance Act, 1994 - N/N. 40/2012–ST dated 20.06.2012 and under N/N. 12/2013–ST dated 1.07.2013 - denial on the ground that the conditions specified in the notification, in particular condition number 2 (c), 3 (e) and 3 (f) were not complied with - HELD THAT:- The law is well settled that benefit of exemption granted under the notifications issued under the Finance Act are of general nature being available to any one and not necessarily confined to a unit in SEZ, which is peculiar in the case of section 26 of SEZ Act being a special power of exemption under a special enactment for a unit in a special economic zone. Therefore, notification issued under section 93 of the Finance Act 1994 cannot be pressed into service for finding out whether a unit in SEZ qualifies for exemption or not.
It is found that it is an admitted position that the respondents are holders of letter of approval issued by the Development Commissioner for the manufacture of pharmaceutical products within the Special Economic Zone, Pithampur, Indore. They have availed various services for setting up their unit in the SEZ, which have been used in relation to the operations of the unit - the services rendered by the appellant are fully exempted from service tax in terms of the provisions of the SEZ Act, the condition of exemption by way of refund imposed by virtue of the notifications issued under the provisions of the Finance Act are inconsistent with the provisions of the SEZ Act and hence the provisions thereof cannot be imposed on the respondent to deny the refund.
The view taken in the impugned order is in accordance with the decisions of the High Court as well as by various Benches of the Tribunal and hence no interference is called for. There are no merits in the appeals filed by the revenue - the appeals are dismissed.
-
2024 (7) TMI 1317
Interpretation of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) for service tax demand - Whether petitioner has actually paid the amount as indicated by petitioner in Form 1? - HELD THAT:- If petitioner is given an opportunity to produce the challans/receipt of the payments made to enable respondent to verify whether the payment was actually made against the tax liability pertaining to the concerned Show Cause Notice, the matter could be put to rest. Once petitioner satisfies the consequence thereof will be to consider the same as payment under the SVLDRS.
The Committee constituted under Section 126 of the SVLDRS will give hearing to petitioner within six weeks from today and the notice of hearing shall be communicated atleast five working days in advance - If petitioner is unable to satisfy the Committee that the payment made was against the tax liability pertaining to the impugned Show Cause Notice then respondent may take further steps based on the Impugned Order dated 25th February 2021.
Petition disposed off.
-
2024 (7) TMI 1316
Suppression of facts or not - invocation of extended period of limitation - Non-payment of due amount of service tax on manpower recruitment and supply service - gross receipts indicated by the appellant in their ST-3 returns were substantially lower that the amounts shown in 26AS statement - appellant had collected the service tax amount from their clients and did not deposit the same in the Government exchequer - penalty.
HELD THAT:- As per the legal provisions prior to 1.7.2012, it is noted that the liability to pay the entire service tax was on the service provider. However, vide notification No. 30/2012 dated 20.06.2012, the service tax liability was shared (25%/75%) in case if any individual or HUF or partnership firm is providing supply of manpower service for any purpose to business entity registered as a body corporate. The adjudicating authority has held that the Form 26 AS/Balance Sheets of the appellant, as obtained from the Income Tax department indicate that during the period 2011-12 to 2014-2015, the appellant was engaged in providing the said taxable services. There is no contrary evidence that has been submitted by the appellant to hold otherwise - the Department has relied on the 26AS statement which is a statement that provides details of any amount deducted as Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) from various sources of income of a taxpayer. This statement gives a consolidated record of every tax-related information associated with a PAN. Therefore, the veracity of the statement cannot be doubted.
It is observed that it has been mostly contended by the ld. counsel to the appellant that the demand for the extended period is not sustainable as there was no intent to evade tax. At the outset, the contention of the ld. counsel that the show cause notice refers to suppression and not mis-statement of facts cannot be accepted - the appellant was aware of his tax liability and chose not to pay his tax correctly.
In the instant case, the appellant did not cooperate with the investigations, failed to submit any documents to substantiate his claim and did not disclose the actual value of taxable services provided by him in the ST-3 returns filed by him. This clearly establishes his intent to evade his liability to pay service tax. Thereafter to appeal to this forum alleging that the demand was time barred, and the finding of suppression of facts was erroneous cannot be accepted.
Extended period of limitation - HELD THAT:- It has been held in the impugned order that as per the chronology of events, during the period in question, the appellant had failed to discharge his liability correctly, as well as suppressed the value of the taxable services realized by them in the ST-3 returns filed by them - the Apex Court in the case of M/S. USHA RECTIFIER CORPN. (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2011 (1) TMI 12 - SUPREME COURT] held that extended period is invokable for notices where the information has been taken by the Department from the Balance Sheet - there are no hesitation in holding that the extended period was rightly upheld by the adjudicating authority.
Penalties - HELD THAT:- The penalties imposed under Section 77(1)(c)(ii), 77(1)(c)(iii) and Section 78 of the Act upheld.
There are no infirmity in the impugned order - appeal dismissed.
-
2024 (7) TMI 1315
Levy of service tax on ‘reverse charge mechanism’ - availing ‘goods transport agency services’ by a manufacturer of ice-cream - HELD THAT:- It is to be placed on the record that negative list introduced under Section 66D w.e.f. 01.07.2012 has clearly excluded under Sub-Clause (p) services by way of transportation of goods by road but not services of a “Goods Transport Agency”. Therefore, if such services are provided by “Goods Transport Agency” then the same is subjected to Service Tax. “Goods Transport Agency” itself is defined under Section 65(50b) of the Finance Act, 1994, which means service in relation to transport of goods by road by any person and issue of consignment note, by whatever name called and Rule, 4B of the Service Tax Rules provides for mandatory issue of consignment notes by “Goods Transport Agency” while providing service in relation to transportation of goods by road in a goods carriage except when wholly exempted under Section 93 of the Act.
It is found that no consignment note was issued by the goods transporter to the Appellant as per the description mentioned above, neither in the invoices raised by the transporter as provided in the second proviso to Rule 4A nor by way of separate consignment note in the form of a document as described in the explanation reproduced and those provisions have not undergone any change in the second amendment of 2012 made to Service Tax Rules, 1994 effective from 01.07.2012.
Thus, procurement of vehicle or hiring of vehicle on kilometre basis without any connection with the destination or quantity cannot bring the nature of service offered through contractual engagement of the vehicles by its owners into the purview of “Goods Transport Agency” service, so as to impose Service Tax on ‘reverse charge mechanism’ on the service recipient.
The impugned order is set aside - appeal allowed.
-
2024 (7) TMI 1314
Classification of services - Business Auxiliary Service or not - amount realized by the appellant was ‘commission’ received in the course of providing such taxable service - extended period of limitation - penalty.
HELD THAT:- The appellant has been engaged by their clients for procurement of goods on behalf of them. The goods procured by the appellant were sold to their clients on 'High Sea Basis' on receipt of an amount as determined in the agreement - the appellant has been engaged for the import of goods on behalf of their customers and the appellant is getting a fixed component as their consideration. The consideration is pre-determined in the agreement itself. Thus, it is observed that the contention of the appellant that they sell the goods procured by them to their customers and earn trading profits, is not supported by any evidence - the remuneration received from the customers is pre-determined and hence, it is equivalent to the 'commission' fixed for rendering a service.
The service tax has been confirmed in this case under the category of ‘business auxiliary service’. Procurement of goods or services, which are inputs for the client, is specifically covered under sub-clause (iv) of the definition of 'business auxiliary service'. Also, 'undertaking any activity relating to sale or purchase of goods on receipt of commission' is also specifically covered under the definition of “business auxiliary service” - the services rendered by the appellant in connection with procurement of goods on behalf of their clients are specifically covered within the definition of “business auxiliary service’ - the appellant is liable to pay Service Tax under the category of “business auxiliary service”.
The appellant being a canalizing agency, the service charges collected by them have nothing to do with the transaction value of the goods. This view has been held by the Tribunal in the case of Gupta Chemicals Ltd. v. Commissioner of Customs, Jaipur [1999 (1) TMI 429 - CEGAT, NEW DELHI], which has been affirmed by the Hon’ble Apex Court in [1999 (10) TMI 752 - SUPREME COURT].
Extended period of Limitation - penalty - HELD THAT:- The appellant is a Government of India undertaking and there is merit in the submission of the appellant that they have no intention to evade payment of tax. Thus we observe that suppression of facts with intention to evade payment of tax has not been established in this case. Hence, the demand confirmed in the impugned order by invoking the extended period of limitation is not sustainable. It is observed that the demand in this case has been confirmed for the period 2005-06 and 2006-07 and the Notice was issued on 22.12.2009, which is beyond the normal period of limitation of one year. Thus, the entire demand confirmed in the impugned order is barred by limitation and hence not sustainable. For the same reason, no penalty is imposable on the appellant.
The impugned order is set aside on the ground of limitation - appeal allowed.
-
2024 (7) TMI 1313
Classification of service - mining services or site formation and clearance, excavation and earth moving and demolition services? - works for drilling operations of wells in oil fields in the state of Assam and Arunachal Pradesh - non-imposition of penalty - HELD THAT:- The respondent has entered into agreements with M/s. OIL and M/s. ONGC to carry out works for drilling operations of wells in oil fields in the state of Assam and Arunachal Pradesh. A perusal of the Work Orders executed by the Respondent reveals that all the activities undertaken by them are in relation to mining service, which was brought into the net of taxable services with effect from 01.06.2007 - the ld. adjudicating authority has examined the work orders and given his findings at paragraph 2.2 and 2.3 of the impugned order wherein it has been categorically recorded that the activities undertaken by the respondent under the 12 work orders were not liable for Service Tax under the category of “site formation and clearance, excavation and earth moving and demolition services”.
The ld. adjudicating authority has given a well-reasoned finding to arrive at the conclusion that the Respondent is not liable for payment of service tax under the category of “site formation and clearance, excavation and earth moving and demolition services”, for the period prior to 01.06.2007. Accordingly, there are no infirmity in the impugned order passed by the ld. adjudicating authority in dropping the demand of service tax for the period prior to 01.06.2007 - the ld. adjudicating authority has rightly dropped the demand of Service Tax under the category of “site formation and clearance, excavation and earth moving and demolition services” for the period prior to 01.06.2007.
Non-imposition of penalty - HELD THAT:- It is observed that the appellant had discharged their entire service tax liability before issuance of the Show Cause Notice. They had also discharged major part of interest liability before issuance of the Show Cause Notice. In view of the above fact, the ld. adjudicating authority has extended the benefit of Section 80 of the Finance Act, 1994 and not imposed penalties under Sections 76, 77 and 78 of the Act - there is no suppression of fact with intention to evade tax established in this case - the ld. adjudicating authority has rightly extended the benefit of Section 80 of the Finance Act, 1994 and not imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994.
The dropping of the demand of service tax and non-imposition of penalties in the impugned order by the ld. adjudicating authority is upheld - the appeal filed by the Department is rejected.
-
2024 (7) TMI 1258
Condonation of delay in filing appeal - sufficient reasons for delay or not - Demand of service tax on ross-border transactions - place of provision of services - remittances made to their branches and offices abroad - consideration for taxable service procured from outside the taxable territory - the CESTAT set aside the demand - HELD THAT:- There is a gross delay of 371 days in filing this civil appeal. The explanation offered in order to seek condonation of delay is not satisfying.
There are no merit in this civil appeal - the civil appeal stands dismissed both on the ground of delay as well as on merits.
-
2024 (7) TMI 1257
Refund/ rebate of CENVAT credit - rejection on the grounds that the refund claims are time barred under Notification No.27/2012 - whether the appellants were supplying merely “Intermediary Services”?
Time Limitation - HELD THAT:- It is found that the appellants have complied with the conditions laid down under N/N. 27/2012 in a substantial manner. Refund claims cannot be held to be barred by limitation merely because certain documents have not been appended, more so, for the reasons beyond their control. It is opined that filing of the initial refund claim, substantially complying to the provisions of law and placing on record their claim before the Department, is in time; therefore, it is found that in the instant case, the refund claims are not barred by limitation.
Whether the services provided by the appellant fall under “Intermediary Services”? - HELD THAT:- The learned Commissioner (Appeals) in the impugned order has not given any findings on the issue; he has simply remanded the case back to the original authority with a direction to give findings on the issue despite the fact that the original authority has given elaborate findings on the issue - the learned Commissioner (Appeals) has deprived this Bench of an opportunity to analyse the legality of his findings on the issue. Since the Commissioner (Appeals) has not given any findings on the issue, it will be in the interest of justice that the case should travel back to the Commissioner (Appeals) to go through the findings given by the original authority and to decide the issue on merits on the basis of his own interpretation of law by giving findings on the issue.
Both the appeals are partly allowed holding that the refund/ rebate claims filed by the appellants are not barred by limitation; the appeals are remanded back to the Commissioner (Appeals) with a direction to give his own findings on the issue as to whether the appellants have “Exported Services” or have merely provided “Intermediary Services”.
-
2024 (7) TMI 1256
Failure to discharge appropriate service tax on the consideration received by them for the various projects - appellant discharged service tax under Commercial or Industrial Construction Services (CICS) upto 30.06.2012 and thereafter paid the service tax under Works Contract Service (WCS) - HELD THAT:- The department has confirmed demand for the period 01.07.2012 to 31.03.2013 under the category of CICS. Undisputedly, the appellant has availed the benefit of Notification No.1/2006 and 30/2012 for the reason that they have used materials for providing the construction services.
In the case of Bhayana Builders [2018 (2) TMI 1325 - SUPREME COURT], the Hon’ble Apex Court held that even if free materials are provided, the abatement would be eligible. The Department has taken a view that the appellant has not furnished evidence to show that materials were used for providing construction service for which reason abatement has been denied.
The Ld. Counsel submitted that the appellant would be able to furnish sufficient evidence to establish that the contracts are composite in nature and would not fall under the category of CICS. From the submissions made by both sides, it is opined that the matter requires to be remanded to the adjudicating authority who is directed to consider all issues afresh. Needless to say that if the contracts are composite in nature, the appellant would be eligible for the abatement.
The original authority is directed to consider the applicability of the Tribunal’s decision in the case of R.R. Thulasi Builders (I) Pvt. Ltd. Vs CGST & Central Excise, Salem [2024 (7) TMI 1067 - CESTAT CHENNAI] as well as Real Value Promoters Pvt. Ltd. Vs CGST & Central Excise, Chennai [2018 (9) TMI 1149 - CESTAT CHENNAI] and Jain Housing & Construction Ltd. Vs CST, Chennai [2023 (2) TMI 1044 - CESTAT CHENNAI] which is maintained by the Hon’ble Apex Court in [2023 (9) TMI 816 - SC ORDER]. The appellant shall be given opportunity of hearing as well as liberty to furnish evidence.
The appeal is allowed by way of remand to the adjudicating authority.
-
2024 (7) TMI 1255
Levy of service tax - incentives / discounts received by the appellant from the manufacturer of cars and lubricants viz. Volkswagen - requirement to pay an amount collected @ 5% / 6% / 7% of the value of trading activity under Rule 6 of CENVAT Credit Rules, 2004, when the appellant had paid the entire credit attributable to input services utilized for trading activity - CENVAT Credit on various input services - levy of penalty.
Levy of service tax - incentives / discounts received by the appellant from the manufacturer of cars and lubricants viz. Volkswagen - HELD THAT:- The facts not in dispute are that the appellant are authorized dealers of Volkswagen brand cars and also providing services of cars of the said brand. On purchase of the cars from the manufacturer Volkswagen Limited, they received various discounts / incentives on achieving the sales target during the relevant period. Applicability of service tax on trade discount / incentives received by an authorized automobile dealer from the manufacturer, is no more res integra and covered by a recent judgment of this Tribunal in the case of M/S PREM MOTORS PRIVATE LIMITED VERSUS COMMISSIONER, CENTRAL EXCISE & CGST-JAIPUR [2023 (2) TMI 990 - CESTAT NEW DELHI] wherein the Tribunal scrutinizing the case laws on the subject observed 'the activity undertaken by the appellant is for the sale and purchase of the vehicle and the incentives are in the nature of trade discounts. The incentives, therefore form part of the sale price of the vehicles and have no correlation with the services to be rendered by the appellant. That in terms of the dealership agreement, the appellant purchases the vehicles from MSIL and sells the same to its end customers.'
Applicability of 5% / 6%/7% of the value of the trading activity under Rule 6(3)(i) of Cenvat Credit Rules, 2004 - HELD THAT:- The appellant has reversed the total credit attributable to input services that had been used in providing trading activity; therefore considering the Notification No.13/2016-CE(NT) dated 01.03.2016 issued subsequently, wherein it is prescribed that in the event an assessee pays the amount of cenvat credit attributable to exempted products calculated as per Rule 3A of the CENVAT Credit Rules, the appropriate officer competent to adjudicate the case may allow the manufacture or provider of output services to follow the procedure and pay the amount referred to in clause (ii) of sub-rule (3), calculated for each of the month with interest. Therefore, to ascertain the amount of cenvat credit attributable to input services used in trading activity be determined along with interest - Taking note of the argument of the appellant that they have already paid/reversed Rs.42,30,802/- against Challan No.00244 dated 08.01.2018which is in excess of Rs.10,42,813/-, the matter needs to be remanded to the adjudicating authority to ascertain the said fact and recompute the liability with interest.
Imposition of penalty - HELD THAT:- The major part of the demand has been set aside and on the issue of applicability of Rule 6, it is observed that the appellant had already reversed the attributable cenvat credit which is in excess of Rs.10,42,813/- than the amount payable by them as claimed by them; therefore imposition of penalty under Section 78 of the Finance Act or Rule 15(3) of the CENVAT Credit Rules, is unwarranted and accordingly set aside.
The confirmation of demand of Rs.3,03,50,663/- on various incentives / discounts with interest and penalty and the amount of Rs.3,84,28,721/- confirmed under Rule 6(3) of Cenvat Credit Rules, 2004 being 5%/6%/7% of the value of the exempted services are set aside - the penalties imposed on the appellant are set aside - the matter is remanded to the adjudicating authority for the purpose of verification/scrutinization.
Appeal disposed off by way of remand.
-
2024 (7) TMI 1213
Classification of service - commercial or industrial construction service or works contract service - activity of the appellant namely, turnkey contract for development of ash pond - penalty.
Classification of service - HELD THAT:- On going through the scope of work and the agreement placed by the appellant, clearly shows that the services rendered by them include supply of materials also, which is appropriately classifiable under the category of “works contract service”, which is taxable with effect from 01.06.2007.
Admittedly, in the case on hand, the service rendered by the appellant falls under the category of “works contract service”, which came into effect from 01.06.2007 and the period involved in this case is prior to the said date. Therefore, it is observed that for the said activity, no service tax is payable by the appellant. In these circumstances, it is held that whole of the demand is not sustainable against the appellant under the category of “commercial or industrial construction service”, which qualified as “works contract service”.
Penalty - HELD THAT:- In the facts and circumstances of the case, no penalty is imposable on the appellant.
The impugned order is set aside - appeal allowed.
-
2024 (7) TMI 1168
Liability to pay service tax - Commercial or Industrial Construction Services - main contention put forward by the appellant is that the buildings constructed by the appellant are educational institution buildings and not primarily used for commerce or industry - HELD THAT:- The Board vide its Circular dt. 17.9.2004 has clarified that the assessee is not liable to pay service tax for construction of educational institutions as educational institutions are not commercial in nature - In the present case, the construction services are provided to non-profit bodies (Trust) and constructions carried out are for educational institutions.
The Tribunal in the case of M/s.R.R. Thulasi India Pvt.Ltd. [2024 (7) TMI 1067 - CESTAT CHENNAI] had occasion to analyse the very same issue in which the Board circular was taken into consideration. It is noted by the Tribunal that the said Board Circular dt. 17.9.2004 has not been withdrawn and was still in force during the disputed period. The Tribunal held that the demand under CICS cannot sustain in respect of construction services provided for construction of educational institutions.
The demand cannot sustain - the impugned order is set aside - Appeal allowed.
-
2024 (7) TMI 1115
Classification of service - Tour Operator Service or travel agent service? - gross amount received by the Appellant in facilitating booking of hotel accommodation against commission - period from April, 2006 to March, 2011 - Extended period of limitation - HELD THAT:- A Bare reading of the above definitions of “tour operator service” would go to show that primary engagement or activity or business of a person is that of planning, scheduling, organising or arranging tours by any mode of transport covered by permit granted under the Motor Vehicle Act. 1988 or the rules made there under and in so doing i.e. while conducting tour arrangement, accommodation, if made, can be included within the definition of “tour operator service” but a stand alone provision for arrangement of accommodation in a hotel room can’t alone put the service under the category of “tour operator service” - giving a proper meaning to the definition of “tour operator service”, which is admittedly not being carried out by the Appellant as a service provider, since conducting tour by tourist vehicle having permit is a condition precedent to include arrangement for accommodation and not such arrangement of accommodation would alone put the service in the category of “tour operator service” and therefore, SCN justifying activity of the Appellant falling under the category of “tour operator service” only because the word “accommodation” is used in the definition, is a mere allegation and substantiation of the same by the Commissioner is erroneous as not in conformity to the statutory provisions.
Leviability of Service Tax on the alleged service of providing hotel accommodation by the Appellant - HELD THAT:- It is noticed that learned Commissioner had avoided to give his finding on this specific issue by taking the classification to “tour operator” in which, hotel room accommodation was stated to be a composite service activity despite the fact that in the reply to the SCN, specific averment regarding non-taxability of hotel room accommodation before dated 01.05.2011 was made in para 3 of the said reply. We are in incomplete agreement to the fact that hotel room accommodation has been brought to Service Tax net w.e.f. 01.05.2011 and the same is an independent levy that stands without any link to “tour operator service”, unless it is a component of the same main service namely “tour operator service” - it is required to be mentioned here that prohibition on double taxation has emerged from principle of “equity” law for which even no constitutional recognition is required though in the Indian scenario for various taxation statute like Income Tax Act under Section 90 & 91 and in Indirect Tax, Double taxation avoid Agreement (DTAA) among the nation including India is available to contend such punity actions.
Invocation of extended period of limitation - HELD THAT:- It is a settled principle of law developed through several decisions of the Hon'ble Apex Court, one of which was delivered recently in the case of M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [2007 (8) TMI 11 - SUPREME COURT] that when the facts are known to the parties, omission by one party to do what he might have done would not render it to suppression. In the instant case service tax itself is held to be not leviable. It is found that extended period is also not invocable in this proceeding since taxability of the service was not in existence in the statute book under which classification was made while confirming the demand under “tour operator service”.
The order passed by the Commissioner of Service Tax – VI, Mumbai is hereby set aside - Appeal allowed.
-
2024 (7) TMI 1076
Invocation of extended period of limitation - It is the contention of learned counsel for the petitioner that petitioner is engaged in carrying out drilling of bore wells in agricultural lands pertaining to agriculturists, which falls under the exemption under negative list entry under section 66 (D) (3) of the Finance Act of 1994 - HELD THAT:- This Court is of the opinion that to invoke the proviso to Section 73 (1) of the erstwhile Finance Act of 1994, the necessary mandatory requirements are contemplated in the Act of 1994, which is ingrained in the proviso to section 73 (1) of the Act. The same has been stated in the show cause notice with regard to the petitioner being liable to pay the service tax and why penalties should not be imposed except for narrating in detail with regard to the requirements as contemplated under proviso to Section 73 (1) of the Act of 1994.
It is not the case of the petitioner that he was not provided an opportunity to reply and so also it is not his case that he was not given a personal hearing or opportunity of hearing. The petitioner was asked to provide details with regard to why he has not registered under the service tax and not paid the service tax.
It is apparently clear that once the show cause notice is issued under the proviso to Section 73 (1) of the erstwhile Finance Act, invoking the extended period of limitation beyond the 30 months and once an inquiry is conducted, opportunity is given to file reply when adjudication is held the grounds whatever urged by the petitioner herein would have to be challenged by way of an appeal provided under the Act of 1994, rather than challenging the jurisdiction of the revenue for issuance of the show cause notice - It cannot be said that the revenue does not have the jurisdiction to issue show cause notice under Section 73 (1) of the Act as it is not specified in detail with regard to the requirement under proviso to Section 73 (1) of the Act. As subsequently in the course of the show cause notice and the hearing, the opportunity was provided to the petitioner to substantiate the same by answering the requirement of not registering himself under the service tax registration and payment of service tax.
It is apparently clear that the invocation of the writ jurisdiction under Article 226 of the Constitution of India whether could be entertained when there is an alternative efficacious remedy of appeal available under this statute. It is not in dispute, but in the present case, Section 85 of the Act, 1994 provides for appeal against any orders passed by the authorities. If at all the petitioner is aggrieved by the order of the authorities, he would have to approach the appellate authority rather than invoking the writ jurisdiction.
There are no good ground made or cogent reasons of the revenue having not provided sufficient cause and reasons to invoke the proviso to section 73 (1) of the Act, 1994, for the extended period of limitation - petition is dismissed.
-
2024 (7) TMI 1075
Non-payment of service tax - consideration received from Nalco, USA - service rendered during the period 2007-08 to 2011-12 - Extended period of limitation - HELD THAT:- For the services being rendered for the clients of USA Company in India since the service is taking place within India, the Appellant is required to pay Service Tax, which they are doing and the Department is not disputing the same. In respect of the services rendered for the clients of USA Company in foreign countries, this would amount to export of services in terms of Rule 3 of the Export of Services Rules, 2005. Rule 3 (2)(b) specifies that when the services are rendered abroad, the consideration should be received in convertible foreign currency. Admittedly, there is no dispute that the Appellant is receiving the consideration in convertible foreign exchange. Only objection of the Revenue is to the effect that such foreign exchange is being received form USA Company and not directly from the clients.
There are no specific bar or condition at Rule No. 3(2)(b) that the convertible foreign exchange should be received only from the clients and not through any other person. Therefore, the Revenue's contention that the amount is not being received in convertible foreign exchange, not agreed upon. Since the Appellant has fulfilled all the requirements under Export of Service Rule, 2005, we hold that on merits the confirmed demand is required to be set aside.
In respect of reimbursements given to Nalco Company USA, there are the costs initially incurred by them and the same is being reimbursed by the appellant. There is no allegation that such amounts are being paid by the appellant as consideration towards any service provided by Nalco Company USA. Therefore, the confirmed demand on this count is legally not sustainable, the same is set aside.
Extended period of limitation - HELD THAT:- There are considerable force in the Appellant's submission that the Department has not brought in any concrete evidence towards suppression. Admittedly, the Appellant is registered with the Service Tax Department and is making the normal Service Tax payments, filing the ST-3 Returns etc. which shows that they have been providing all the details to the Department on a timely basis. Towards their transactions within India, they are discharging the Service Tax liability. In respect of the services rendered abroad, their holding bonafide belief is found to be proper. In such a case, suppression clause cannot be sustained against the Appellant. Therefore, the confirmed demand towards extended period set aside on account of time bar also.
The Appeal is thus allowed both on merits as well as on account of limitation (in respect of the extended period).
-
2024 (7) TMI 1074
Levy of service tax - renting of immovable property - buildings (at Corbett Ramnagar & Naukuchiyatal) which were renting - eligibility for abatement of 40% in terms of N/N. 26/2012 - supply of Tangible Goods service - letting out plant/machinery and fixtures to M/s.Mahindra Holidays & Resorts India Ltd. - extended period of limitation - penalty u/s 77 and 78 of FA.
Renting of immovable property - HELD THAT:- For the period upto June, 2012, relying on the provisions of Section 65(105)(zzzz) and the Exclusionary Clause (d), which provided that, “building used solely for residential purposes and buildings used for the purpose of accommodation including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities shall not be included in the category of ‘immovable property’ for the purpose of business or commerce. The issue is no longer res integra as the same is considered on the earlier occasion also by this Tribunal in the case of AMBIENCE CONSTRUCTIONS INDIA LTD. VERSUS THE COMMISSIONER OF SERVICE TAX HYDERABAD [2012 (11) TMI 653 - CESTAT BANGALORE] and also in the case of M/S JAI MAHAL HOTELS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2014 (7) TMI 540 - CESTAT NEW DELHI], where the Tribunal held 'On a true and fair construction of provisions of the exclusionary clause under Explanation 1 to Section 65(105)(zzzz); and in particular sub-clause (d) thereof, we are compelled to the conclusion that renting of buildings used for the purpose of accommodation including hotels, meaning thereby renting of a building for a hotel, is covered by the exclusionary clause and does not amount to an “immovable property”, falling within the ambit of the taxable service in issue.'
The case of the appellant is that since renting of hotels is not covered in the Negative List but had become taxable, therefore, they have paid the service tax on the letting out of the hotel building w.e.f. 1.7.2012. Notification No.26/2012 dated 20.06.2012 exempted the taxable services of the description specified in Column (2) of the Table therein, from so much of the service tax as in excess of the service tax calculated on a value, which is equivalent to the percentage specified in the corresponding entry at Serial No.6 of this Notification i.e., renting of hotels, inns, guesthouse, clubs, camp sites or other commercial places meant for residential or lodging purposes to the extent of 60%. Thus under the specific entry in the notification, the appellant is eligible for abatement to the extent of 40% and was liable to pay service tax on 60% of the value. Since the appellant have paid the service tax on 60% of the value of the rental amount received on letting out the said hotel, they are not liable for any further payments towards service tax and therefore, the demand for the balance amount stands dropped.
Supply of tangible goods service - letting out of the Plant & Machinery to MHRIL - HELD THAT:- A perusal of Section 65(105)(zzzzj) and Section 66E(f) shows that the requirement to fall under such services remains the same, which involves supply of tangible goods without transferring the right of possession and effective control of such goods. Further, the definition also shows that service tax under SOTG is applicable when the goods are provided for use without transfer of right to possession and effective control whereas in the present case, complete control and possession of goods have been given to MHRIL and hence, they are excluded from the levy of service tax.
Thus, for the period from 01.07.2012, the appellants have admittedly deposited the service tax, subject to the abatement in terms of the N/N. 26/2012 dated 20.06.2012 and, therefore, they are liable for service tax only to the extent of 60% of the value of the lease rent of the hotel - the appellants are not liable to pay service tax under the category of ‘SOTG’ on the goods as they are part of the premises and are immovable. We are supported by the earlier decision of this Tribunal dated 13.09.2019 in the case of the appellant.
Levy of penalty - HELD THAT:- The issue was in the nature of interpretation and the transactions are duly recorded in the books of accounts, which are maintained in the ordinary course of business and, hence, no ground for levy of penalty is made out.
The impugned order is hereby set aside and the appeal is accordingly allowed.
-
2024 (7) TMI 1067
Liability to pay service tax - construction of educational institutions - Works Contract Service for the period 01.10.2008 to 30.06.2012 - The department is of the view that the appellant has to pay service tax for construction service provided to construct educational institutions - extended period of limitation.
HELD THAT:- The Department vide Circular No.80/10/2004-ST dt. 17.09.2004 has clarified that the constructions which are for the use of organizations or institutions being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purpose of profit are not taxable being noncommercial in nature - When the circular issued by the Board specifically clarified that construction services provided for construction of educational institutions are exempted from levy of service tax, there are no reason to hold that these constructions are commercial in nature.
The department itself has taken the view that the circular dt. 17.09.2004 is still in force and that the construction provided for educational institutions are exempted from levy of service tax. Needless to say, that the Board circulars are binding on the department.
The Hon’ble High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [2012 (7) TMI 22 - KARNATAKA HIGH COURT] had occasion to consider the issue of refund of service tax paid by an assessee on construction services provided for construction of educational institutions. The Hon’ble High Court upheld the order passed by the Tribunal that construction of educational institutions is exempt from levy of service tax.
In the case of GUJARAT ADANI INSTITUTE OF MEDICAL SCIENCES VERSUS C.C.E. & S.T. -RAJKOT [2023 (6) TMI 1000 - CESTAT AHMEDABAD], the Tribunal considered the very same issue as to whether the demand of service tax raised on construction of educational institutions is sustainable or not, and it was held that 'When the property in question is not used by Appellant for commercial purpose then it cannot be liable for payment of service tax as is apparent from Circular dated 17-09-2004. It is apparent that C.B.E. & C. circular considered the use of the said property as non-commercial in nature. In these circumstances service tax on construction of said building / property cannot be levied.'
In the case of M/S KMV PROJECTS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, AND SERVICE TAX HYDERABAD [2019 (3) TMI 1439 - CESTAT HYDERABAD], the issue considered by the Tribunal was whether construction of guest house for temples at Srisailam, Kanipakam and also educational institutions would be subject to levy of service tax, where it was held that 'these buildings constructed by the appellant and the services rendered under works contract services are not taxable pre or post 1-7-2012.'
Thus, the demand of service tax under WCS for the disputed period for construction of educational institutions cannot sustain. The issue on merits is answered in favour of the appellant and against the Revenue.
Time Limitation - HELD THAT:- There is no positive act of suppression established by the department against the appellant. The issue is also interpretational in nature as there have been several litigations. The Board has also come forward to clarify the nature of construction services when provided to educational institutions. In such circumstances, there are no grounds for invoking the extended period and the demand is time-barred. The issue of limitation is answered in favour of the appellant and against the Revenue.
The impugned order is set aside - appeal allowed.
-
2024 (7) TMI 1043
Maintainability of appeal - appeal was rejected on the ground of limitation - benefit of abatement - Section 60B r/w Section 66E of the Finance Act, 1994 - HELD THAT:- The petitioner has placed on record the discharge summary issued by the Apollo Hospital, Chennai. The said document records that the petitioner was admitted with “triple vessel coronary artery disease”. It also records that the petitioner was diagnosed as a diabetic 13 years earlier - The facts and circumstances warrant providing the petitioner an opportunity by putting the petitioner on terms. By taking into account the fact that the petitioner had earlier remitted 7.5% towards tax demand, reconsideration is necessary by directing the petitioner to remit an additional 7.5% of the disputed tax demand.
The matter is remanded for reconsideration on condition that the petitioner remits an additional 7.5% of the disputed tax demand within 15 days from the date of receipt of a copy of this order - Petition disposed off by way of remand.
-
2024 (7) TMI 1042
Valuation - inclusion of charges from the Customers under the category of Interest Free Maintenance Security [IFMS] and Annual Maintenance Charges [AMC] - Revenue’s contention is that the said collected amount would fall under the category of “Management, Maintenance and Repair Services” and would be liable to service tax separately - demand of service tax of advance maintenance charges.
Inclusion of charges from the Customers under the category of Interest Free Maintenance Security [IFMS] and Annual Maintenance Charges [AMC] - HELD THAT:- The amount is refundable in case of termination of the ownership agreement and if no such termination has taken place till date, the amount would not be refunded. As long as the provisions for refund of the said amount in the agreement itself is there, it has to be considered that the said amount is refundable and was towards security deposits and was not for the purpose of providing any services, so as to levy tax on the same.
Demand of service tax of advance maintenance charges - HELD THAT:- Once it is an admitted fact that Paramount Facilities Services Pvt. Ltd. has provided services, no tax would be demanded from the Appellant. This is also a fact on record that the Department had already demanded service tax from Paramount Facilities Services Pvt. Ltd. under SCN dated 10.10.2014 for the same work during the same period and on same basis. It is also submitted that for the period 2010-11 to 2011-12 the Department had already issued another SCN demanding tax on parking charges which has been finally settled in favour of the Appellant on merits as well as on limitation.
Extended period of Limitation - HELD THAT:- It is found that demand stands raised and confirmed by invoking longer period of limitation inasmuch as a SCN was issued on 15.10.2014 for the period July, 2010 to June, 2012. Apart from the fact that the Lower Authorities have alleged that the Appellant did not file the returns and pay the Service Tax, there is otherwise no positive evidence adduced by the Revenue so as to justifiably invoke the longer period of limitation. The Service Tax law, during the relevant period, was still at the nascent stage and was not clear. The Board’s Circular referred to by the Learned Advocate is to the effect that all peripheral activities provided by the builders would not be taxable under the category of ‘Residential Complex Construction Services’. There is also no positive evidence indicating any mala fide on part of the Appellant. Accordingly, the order set aside on limitation and the appeal allowed on the said ground.
The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.
-
2024 (7) TMI 1002
Classification of services - Online Information and Data base Access or Retrieval services or not - Place of Provision of Services - whether services provided by the Appellant during the period 01.04.2015 to 30.11.2016 were classifiable under category of OIDAR? - HELD THAT:- In the present case, it is found that “Search Engine Optimization” service was provided by the Appellant, which is a process whereby client”s website visibility in search engines like, Google, Microsoft Bing etc. is increased. The process optimize search engine results of the client”s website. After processing of the website, it is uploaded to client”s server. Website visibility is commonly measured by the placement or ranking of the site on search engine results pages. The above process of search engine optimization is not providing any information and database for retrieval but it is a technological change in website of the client to rank it higher for prospective customers of the client who desires to know about the product or service of the client. Job of the Appellant is limited only to process of website of the client. It is not covered under OIDAR service as in the said process no information is provided for database access or retrieval. It is an improvement process of the website of the client to keep it on higher ranking.
The Appellant does not have any relationship with any viewer, i.e., the person who retrieves or accesses data. The Appellant simple setting up campaign on the Google site hired by its client who uses them for further purposes. OIDAR services are those services which can be accessed by anyone all over the globe. In the instant case, the Appellant provides service only to specific person who in turn uses the same for viewers of world. The nature of service is more akin to Business Support Service. Hence, services in question are not under OIDAR category.
The Appellant is also engaged in development of Mobile apps and web design & development activities for its clients. Mobile application development is the process of making software for smart phones, tablets and digital assistants. The software can be preinstalled on the device, downloaded from a mobile app store or accessed through a mobile web browser. It is not an information and database for retrieval but it is software development activities for further operation. Hence the same cannot be classified under OIDAR.
Once the classification of said services is not covered under OIDAR services, the place of provision in respect of service being rendered by the Appellant is outside India in respect of which export has been claimed. The place of provision Rule 9(b) of the POPS Rules, 2002 would not be applicable in the present case.
The impugned order is set aside - appeal allowed.
............
|
9911796707
