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Showing 41 to 60 of 324 Records
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2025 (3) TMI 284
Assessment u/s 144 - assessee argued that they had not been given a fair opportunity to present their case and provide evidence to support their claims - AO recorded that despite such show cause notice, neither the assessee furnished any reply nor any evidence to substantiate the cash deposit - AO made addition on account of cash deposit in absence of evidence - HELD THAT:- Assessee explained that notice under section 250 was issued by CIT(A) for filing submission by 09.01.2022 and again vide notice dated 21.02.2022, the assessee filed application for adjournment, copy of screen shot of ITBA portal is filed.
Assessee sought one-month time and thereafter no notice was received by the assessee. It was also explained the that it is not the case where the assessee has not made compliance, rather, the assessee is interest in pursuing his appeal and prayed that in the interest of justice, matter may be restored back to the file of Assessing Officer to allow the assessee to file submissions and evidence in support of cash deposit. Considering the facts and circumstances of the case and keeping in view the principles of natural justice, restore the matter back to the file of Assessing officer to decide the issue afresh.
The matter is restored to the file of Assessing Officer keeping in view of the facts that assessment was also completed under section 144. Grounds of appeal raised by the assessee are allowed for statistical purposes.
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2025 (3) TMI 283
Disallowance of interest tax payment - Whether CIT(A) erred in not allowing the interest tax paid inspite of the specific provisions of Section 18 of the Interest-tax Act? - HELD THAT:- Assessee is eligible to claim the interest tax payable for any assessment year shall be deductible from the income of the assessee.
Assessee originally had paid the applicable interest tax in the respective assessment years 1993-94 to 1997-98, which was later refunded by the Revenue in accordance with the decision of this Tribunal.
However, the interest tax liability arose to the assessee during the A.Y 2018- 19 by way of OGE of the Revenue pursuant to the decision of the Hon’ble Madras High Court . [2014 (9) TMI 429 - MADRAS HIGH COURT], which was subsequently confirmed by Hon’ble Supreme Court by dismissing the SLP filed by the assessee .
Accordingly, the interest tax liability for the A.Ys 1993-94 to 1997-98 has been discharged by the assessee during the A.Y 2018-19 and claimed as expenditure.
Assessee’s claim of interest tax expenditure during the A.Y 2018-19 disallowed by the A.O and that of the CIT(A) is erroneous and hence, we set aside the order of the CIT(A) and allow the claim of the assessee of interest expenditure for the A.Y 2018-19. Thus, the grounds of appeal raised on this issue of the assessee is allowed.
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2025 (3) TMI 282
Rejection of books of accounts - AO estimating 8% of turnover - HELD THAT:- AO has observed that, the assessee had not submitted the Profit and loss account for the few projects of the clients and hence decided to reject the entire books of accounts, which is not permissible as per law.
AO on one hand rejects the books of accounts of the assessee and on the other goes on to adopt the contract revenue declared by the assessee in its books of accounts for the purpose of estimation of revenue at 8% which only goes to prove that the AO accepts the value of turnover reported by the assessee in its books and has only arbitrarily rejected the books of accounts without giving any cogent reasons in doing so.
In the present case, the AO has not given any specific finding that the assessee has not followed continuously accounting method.
As in the case of CIT Vs. Woodword Governor [2009 (4) TMI 4 - SUPREME COURT] held that the accounting method followed by an assessee continuously for a given time period has to be presumed to be correct till the AO comes to know the reasons to be given that system does not reflect the true profits.
we are of the considered view that, the AO has grossly erred in rejecting the books of accounts of the assessee in the above factual matrix. We also gone through the reasons given for rejecting the books of accounts by the AO is not as per the provisions of Section 145 of the Act and allegations made in the AO’s order is dehors the facts.
Further, it is noted that the Assessee has furnished the details of all the projects giving true picture of turnover and the corresponding loss / profit earned in the respective projects in the consolidated statement showing the percentage of completion method by offering revenues on year-on-year basis by following the AS 7 along with ICDS prescribed under the Act. Thus, addition made by the AO, based on the estimation of profit @ 8% on the turnover derived from the books of accounts is not justified and arbitrary.
Addition on account of difference in contract receipts as per 26AS and Books of accounts - CIT(A) deleted addition - HELD THAT:- On perusal of the submission made by the Ld.AR, we note that the assessee has maintained the project wise details of all the clients for having executed the projects reported the turnover and profit based on percentage completion method. Further it is also noted that, the assessee has furnished the reconciliation of the turnover of the clients before ld.CIT(A), wherein the AO had not accepted the explanation of the assessee in respect of 4 clients in remand report.
On perusal of the statement of turnover calculation as per AS 7 for the A Y 2018-19, we find the argument of the Ld.AR as submitted the reconciliation of the Turnover along with 26AS has been carried out correctly. Therefore, we are of the view that the addition made by the AO is not justified on this issue and hence dismiss the ground of the revenue by affirming the impugned order of the Ld.CIT(A) on this issue.
Addition in respect of waiver of loan as income under the head profits and gains of business or profession - CIT(A) deleted addition - HELD THAT:- Addition being only the principal portion of the loan being waived cannot be taxed as income under the head profits and gains of business or profession and hence cannot be subject to tax as per the provisions of section 28(iv) by treating the same as income of the assessee.
The reliance made by the ld.AR upon the decision of Mahindra and Mahindra Ltd.[2018 (5) TMI 358 - SUPREME COURT] wherein in respect of application of section 28(iv), which refers to ‘nonmonetary’ benefit or perquisite, whether convertible into money or not, it was held that in the context of waiver of loan, the provisions of section 28(iv) would not be applicable since the benefit derived is in the form of money.
Therefore, in the present case, the nature of loan would be of no relevance, since the interest paid on loan has been regularly claimed and allowed as expenditure and hence nature of loan cannot be disputed at this juncture and accordingly, the exercise of ascertaining the purpose of loan as contended by the Revenue does not arise.
Revenue appeal dismissed.
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2025 (3) TMI 281
Benami Property Transactions - Provisional Attachment order had held that the movable properties comprising of total cash of Rs. 98,93,34,581/- and total gold bullion weighing 166.27 kg are the Benami Property - Adjudicating Authority has not confirmed the Provisional Attachment Order
Whether the provisions of Section 2(9)(D) of the PBPTA require it to be shown that the Benamidar holds the benami property for the benefit of the Beneficial Owner, who is not traceable or fictitious? -HELD THAT:- The circumstances under which the statement or its retraction is to be accepted or rejected need to be evaluated by the Tribunal/ Court. Very circumstance of working in unison among the three partners while shifting their positions at the time of tendering statements and retractions, which are supposed to be true and voluntary, cast doubt on the veracity of their narrations.
The recovery of huge cash and gold bullion of substantial amount and quantum cannot be overlooked. The seizure was made by the Appellant only of that amount of cash and the quantum of gold which was not even explained in the parallel books of account, besides, no mention thereof in the regular books of account. The reason stated by the Respondent that Shri S Nagarathinam could not have kept record of these recoveries because the Respondent undertook sand sale at many places cannot cut much ice in view of the Firm having established businesses which how could not even keep regular accounts. It is not convincing that the Firm was clueless of its business activities so as to maintain its record even in informal accounting. It cannot also be ignored that the detection and the recovery of unaccounted cash and gold bullion happened within a months‟ time of the demonetization. The rush by the Respondent as reflected in the filing of the ITRs for the seizures effected under the PBPTA on the same date for the AYs 2016-17 & 2017-18 cannot but show their attempt to bypass the provisions of the PBPTA. It, therefore, appears to us that the seized cash and gold bullion are Benami Properties for which the Respondent lent its name rather disclose the name of the Beneficial Owner(s).
We find that the transactions or the arrangements relating to seized movable properties are Benami within the import of Sub-Section 2(9)(D) of the PBPTA. We, therefore, set aside the Impugned Order as being devoid of merit and allow the Appeal. The pending applications are accordingly disposed of.
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2025 (3) TMI 280
Smuggling of Gold Bar - discharge of burden of prove - Section 123 of the Customs Act - HELD THAT:- Chapter 14 of the Customs Act deals with confiscation of goods and conveyance and imposition of penalties. Before proceeding with confiscation of goods, the Officer of Customs not below the rank of an Assistant Commissioner of Customs shall cause notice informing the grounds on which he proposed to confiscate the goods or to impose penalty after affording reasonable opportunity, goods improperly imported can be confiscated under Section 111 and penalty can be imposed under Section 112 of the Customs Act. Gold with foreign marking is a dutiable goods which requires valid import document under law.
The statement of M/s Surana Corporation Limited and their purchase documents reveals that M/s Surana Corporation importing gold from (1)NATAXIZ (2) Bank of Novascotia (3) Standard Bank through M/s.MMTC Ltd., whereas gold bar seized have the marking of Commerz Bank, Switzerland. Further enquiry with M/s Surana Corporation in respect of the said discrepancies, certain documents were produced by M/s Surana Corporation. None of these documents correlate the gold bar with marking of Commerz Bank seized from Rajan with the invoices and bill of entry packing list furnished by M/s Surana Corporation. Hence, it is apparent that when the statute under Section 123 cost burden the possessor of the goods reasonably believed to be a smuggled goods to distract the burden. In this case, the appellant had miserably failed to distract the said burden. The order in original as well as the order in appeal had disclosed this fact in detail. It has been concluded that the gold bar seized does not supported by valid import documents either at the time of seizure or later.
Conclusion - The imposition of the penalty on the appellant was justified, but the penalty amount was reduced considering the appellant's role. The Court found no error in the CESTAT's decision.
Appeal dismissed.
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2025 (3) TMI 279
Time limitation to issue SCN - SCN issued by the appellant quashed on the ground that it was issued beyond the limitation period of 90 days proscribed in the Regulation - HELD THAT:- There are no doubt that the show cause notice dated 02.12.2014 issued by the Additional Director General, Directorate of Revenue Intelligence, Chennai Zonal Unit would definitely be qualified to be an offence report. But then, there is nothing on record to show that the appellant was in receipt or was at least in the knowledge of the aforesaid show cause notice dated 02.12.2014. In the affidavit filed in support of the writ petition, the respondent / writ petitioner has no where averred that the authority who issued show cause notice impugned in the writ petition was cognizant of the show cause notice dated 02.12.2014.
In A.M.Ahamed and Company Vs. Commissioner of Customs (Imports), Chennai) [2014 (9) TMI 237 - MADRAS HIGH COURT], it was specifically mentioned that copy of the show cause notice issued to the writ petitioner therein on 08.05.2010 was marked to the Commissioner of Customs (Imports), Chennai. In this case, there is nothing on record to show that copy of the show cause notice dated 02.12.2014 was issued to the Commissioner of Customs, Tuticorin.
Conclusion - The show cause notice dated 02.12.2014 could qualify as an offence report, but there was no evidence that Shanmugasundaram was aware of this notice.
Appeal allowed.
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2025 (3) TMI 278
Dismissal of appeal for default due to the appellant's non-appearance at the hearing - applicability of Section 35C of the Central Excise Act, 1944, and Rule 20 of CESTAT (Procedure) Rules, 1982 - HELD THAT:- The Division Bench of the Hon’ble Supreme Court in Benny D'Souza & Ors vs Melwin D'Souza & Ors [2023 (11) TMI 1309 - SC ORDER], heard an appeal wherein the major contention of the appellant was that the High Court should have dismissed the appeal for non-prosecution in terms of the order XLI Rule 17 CPC and particularly the Explanation thereto instead of dismissing the appeal on merits.
The Hon’ble Court after extracting Order XLI Rule 17 of the CPC held that the Explanation to the Order categorically states that if the appellant does not appear when the appeal is called for hearing it can only be dismissed for non-prosecution and not on merits and went on to allow the appeal.
Considering the statutory position and the views expressed by the Hon’ble Apex Court in the various judgments, adjournments can’t be given for the mere asking without any serious reason, backed with proof, for the non-appearance of the Appellant or his authorised representative on the dates of public hearing. we find that no purpose would be served in continuing with these appeals and hence reject the same for default as per Rule 20 of CESTAT (Procedure) Rules, 1982.
Appeal disposed off.
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2025 (3) TMI 277
Determination of applicability of MRP/RSP based assessment of imported goods cleared to/meant for industrial consumers as declared by the appellant in their Bills of Entry as “NOT FOR RETAIL SALE” - Extended period of limitation - penalty.
HELD THAT:- It is clear from the evidences on record that all the goods were cleared/sold to industrial consumers directly or through their distributors/stockists by the appellant. Since, all the imported goods in dispute were cleared to industrial consumers only, revision of RSP declared at the time of import will also have no significance.; hence, the demand on this count cannot be sustained.
This Tribunal in the case of Hi-Tech Computers [2024 (4) TMI 1234 - CESTAT BANGALORE] following the judgment of this Tribunal in the case of Starlite Components Ltd. [2013 (4) TMI 624 - CESTAT, MUMBAI] in similar circumstances held that the goods imported and cleared to industrial consumers cannot be assessed to CVD under Section 4A of the Central Excise Act, 1944.
The claim of the appellant is that in most of the cases, they have cleared the imported goods on payment of SAD; however, in few/stray cases even though, they have not paid SAD at the time of its import but later cleared on payment of applicable Sales Tax on sale of such goods, hence the demand on this count also not sustainable.
Extended period of limitation - penalty - HELD THAT:- From the records, since it is not clear as the extent of imported goods cleared on payment of SAD at the time of import and the procedure followed later under the said N/N.102/2007, the matter is remanded to the adjudicating authority to examine the demand relating to SAD. The appellant all along has been clearing the goods declaring in the respective Bills of Entry that the goods are not meant for retail sale and in fact no evidence brought on record indicating that the goods are ultimately not sold to industrial consumers. Therefore, invocation of extended period of limitation cannot be sustained. Also, on the same ground, penalty imposed on the company as well as on other appellants cannot be sustained. Therefore, the demand attributable to differential additional duty (CVD) applying MRP/RSP based assessment cannot be sustained.
Conclusion - i) Goods declared as "not for retail sale" and sold to industrial consumers are exempt from MRP/RSP-based assessment under Section 4A of the Central Excise Act, 1944. ii) The Legal Metrology (Packaged Commodities) Rules, 2011, do not apply to goods sold to industrial consumers, even if through distributors, as these are not retail sales. iii) The demand for SAD requires further examination, and the matter is remanded to the adjudicating authority for this purpose. iv) The invocation of the extended period of limitation and penalties is unsustainable due to the lack of evidence of suppression of facts.
Appeal allowed by way of remand.
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2025 (3) TMI 276
Classification of imported goods under the Customs Tariff Act - HELD THAT:- This Bench in the case of Commissioner of Customs (Port), Kolkata Vs. Carbon Resources Private Limited [2019 (1) TMI 1891 - CESTAT KOLKATA] where it was held that 'the imported goods is a carbon additive, used in Steel and Casting Industry (not used as fuel) and classifiable under CTH 38249911, attracting BCD @ 7.5% and CVD @ 12.5%.'
Appeal of Revenue dismissed.
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2025 (3) TMI 275
Eligibility of Appellant to submit a resolution plan under Section 29A of the Insolvency and Bankruptcy Code, 2016 - locus to seek reconsideration of its resolution plan after the refund of the Earnest Money Deposit (EMD) - HELD THAT:- The default under Section 164(2) had occurred on 01.12.2017, the date on which the GADPPL failed to file financial statements and annual returns for a continuous period of three years. Thus, Mr. Avanish Kumar Singh was ineligible to be a director as per provisions of Section 164(2) of the Companies Act, 2013 and the Appellant company also accordingly was not eligible to be a resolution applicant in terms of provisions of clause (e) of Section 29A of IBC, 2016. Further, it is noticed that the Appellant, after writing repeated reminders to RP, had taken back the EMD amount, and it is only as an afterthought, after nearly six months, that the Interlocutory Application was filed for consideration of the resolution plan. This clearly appears to be an attempt to delay the process of CIRP/liquidation. The CoC, in its commercial wisdom, has not accepted the resolution plan and had directed the liquidation of the Corporate Debtor. The commercial wisdom of the CoC regarding acceptance/rejection of the resolution plan is “non-justiciable”.
Conclusion - The Ld. NCLT had rightly refused to intervene in the decision of the CoC and its commercial wisdom in rejecting the resolution plan of the Appellant.
There is no ground to interfere with the order of the Ld. NCLT, and accordingly, the appeal fails and is dismissed.
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2025 (3) TMI 274
Insider trading - use of Unpublished Price Sensitive Information - ‘connected persons’ - restraining the appellants from dealing in the securities market and directing to disgorge an amount and to pay penalties mentioned in the order.
Whether the noticees are ‘insiders’ in terms of Regulation 2(1)(g) of the PIT Regulations, being ‘connected persons’? - HELD THAT:- Undisputedly, the appellant No. 1 was in close association with KMP of Biocon and Mr. Arun Chandawarkar, CEO and joint MD of Biocon and CFO of Biocon Mr. Sidharth Mittal both were directly involved in the negotiations on the Biocon-Sandoz deal as also in CIMAB licensing deal. Appellant No. 1 was undoubtedly in frequent and regular communication with senior managerial persons of Biocon, who had direct knowledge of UPSI.
Keeping the twin sensitive assignment being handled by the appellant No. 1 – (a) advising on CIMAB licensing deal, which allowed him frequent access to CEO and CFO during the year long deal period while these KMPs were also negotiating the Sandoz deal; and (b) handling trading accounts of the CMD and Joint CMD of the company, we hold that the preponderance of probabilities test was correctly applied by the learned WTM.
The appellant nos. 1 is a ‘connected person’ in terms of Regulation 2(1)(g)(i) of the PIT Regulations by having access to UPSI, and the appellant No. 2 is a ‘connected person’ in terms of Regulation 2(1)(d)(i) of the PIT Regulations.
Possession of Unpublished Price Sensitive Information (UPSI) - Whether the trading behavior of the appellant’s shows that they were in possession of UPSI? - Considering the fact that there was a spike in the trading of Biocon within four days of the said UPSI period suggests that such trades were made based on the knowledge of the UPSI. No error in the finding recorded by the learned WTM that there was a strong ‘preponderance of probability’ that the trades executed by the appellants in Biocon during the UPSI period, were guided by UPSI on account of appellants being ‘insiders’.
We are also in agreement with the finding of the learned WTM of holding the appellants as ‘connected persons’ within the meaning of Regulation 2(1)(d)(i) of the PIT Regulations and not on the basis of ‘possession of UPSI’ under the Regulation 2(1)(g)(ii) of the PIT Regulation, which distinguishes ruling in case of Balram Garg [2022 (4) TMI 945 - SUPREME COURT]
In our considered view, in case of ‘insider trading’, the evidence cannot be direct but circumstantial, since evidence with respect to communication channel may not be on record. Often such sensitive information in case of ‘connected persons’ falling under 2(1)(d)(i), need not be necessarily through an email or a letter because, in the instant case, appellant was admittedly working closely with joint CMD & CEO and CFO on cross-border licensing deal and was in frequent communication with them for a long period of time, while they were simultaneously working on another cross- border deal (Sandoz-Biocon deal).
Appeal dismissed.
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2025 (3) TMI 273
Money Laundering - seeking grant of bail - appellants acted in collusion with the main accused and became beneficiaries of the proceeds of crime - HELD THAT:- It is not in dispute that the co-accused have been granted bail. Apart from that, we have taken note of the value of the proceeds of crime that the appellants are alleged to have been involved with. We have also perused the rejoinder affidavit filed on behalf of the appellants which indicates the specific roles played by the coaccused who have been granted bail. Suffice it is to state that the co-accused who have been granted bail are involved with higher amounts of proceeds of crime in comparison to the appellants.
Conclusion - On the grounds of parity, bail is allowed.
Bail application allowed.
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2025 (3) TMI 272
Money Laundering - involvement in a crime of defalcation of huge sum in the matter of managing the award of tenders to PHED - twin conditions under Section 45 of the PMLA - HELD THAT:- In the case of Manish Sisodia [2024 (8) TMI 614 - SUPREME COURT] the Court has not exercised the powers under Article 142 of the Constitution of India. The Court has held that the twin conditions under Section 45 of the PMLA cannot override the constitutional safeguards, as provided under Article 21 of the Constitution of India. This Court has held that a prolonged incarceration cannot be permitted to be converted pre-trial detention into a sentence without trial. Like in the case of Manish Sisodia [2024 (8) TMI 614 - SUPREME COURT] in the present case also thousands of documents are required to be considered at the stage of trial, so also around 50 witnesses are required to be examined. The main evidence in the present case is documentary in nature, which is already seized by the prosecution agency. As such, there is no possibility of the same being tampered with.
It is further to be noted that the Minister, for whose benefit the alleged transactions have taken place, has also not been implecated as an accused in the present case. The petitioner has already been released on bail in the predicate offences.
SLP disposed off.
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2025 (3) TMI 271
Money Laundering - predicate offence - direction to remove the attachment made by the 2nd respondent - HELD THAT:- A perusal of the order passed by the appellate Tribunal reveals that when predicate offence does not survive on account of acquittal, then it cannot be presumed that the said attached properties were purchased out of proceeds of crime by way of money laundering. Further, the appellate Tribunal directed the 2nd respondent to release the attached properties of the appellants / affected persons, as V. Kasimayan and the other accused persons are already acquitted in predicate offence under NDPS Act vide judgment of acquittal dated 01.08.2017 in Complaint Case No.52 of 2016.
Since already the appellate Tribunal directed the 2nd respondent to release the attached properties in pursuant to the Complaint Case No.52 of 2016, the attachment made by the 2nd respondent in respect of the subject properties is hereby raised in pursuant to the order passed by the appellate Tribunal dated 14.09.2023. The registering authority is directed to record the same in the book of records in respect of the subject properties forthwith.
Conclusion - i) When an accused is acquitted in a criminal case, the attached properties cannot be presumed to be proceeds of crime through money laundering. ii) The attachment made by the 2nd respondent on the subject properties was raised in accordance with the appellate Tribunal's order, and the registering authority was directed to record the same.
Petition allowed.
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2025 (3) TMI 270
Taxability of service - classification of services - education services - franchise service.
Whether the service alleged to have been rendered by the appellants to RCs/LCs can be termed as ‘Education Service’ as claimed by the appellants? - HELD THAT:- Punjab Technical University is a body created under Punjab Technical University Act, 1996; they have 494 affiliated colleges; in terms of the decision taken in the seventh meeting of the Boards of Governor in the year 2001, the appellants have started implementing Distance Education Programme (DEP); for this purpose, they have established Learning Centers (LCs) and Regional Centers (RCs) to coordinate/ control the learning centers and have entered into a Memorandum of Understanding with them.
In terms of the Agreement, the fee is collected by the LCs from the students in the form of Demand Drafts drawn in favour of “The Registrar” of the appellant; the total revenue collected is distributed as per the agreed share of the appellant RCs and LCs, which is in the range of 28/32.2/37%, 18/20/22% and 45/47.5/50% respectively; however, Authorization Fee and Additional Authorization Fee collected is entirely retained by the appellant. On going through the clauses of the Agreement, we find that the appellant retains the core functions; eligibility for admission of the students, syllabus and qualification of the teachers, setting of question papers and examination time-table and award of degree/ diploma is decided by the appellant; LCs/ RCs are responsible for appointment of teachers, classroom coaching & practical training as per the syllabus, conduct of examinations; LCs/ RCs may advertise/ canvas about the courses in the university.
The services as regards education fall in the Negative List. It is also found that these Notifications provide exemption for Auxiliary Education Services also. Exemption is also extended to services to education by way of Renting of Immovable Property also. In such circumstances, it is not understood as to why such exemption is not available to the appellant-university, which is established by an Act of State Legislature to propagate education. CBEC vide Circular No.172/7/2013-ST dated 19.09.2013 clarifies the kind of exemptions available to the services rendered in relation to education.
Whether the service alleged to have been rendered by the appellants to RCs/LCs can be termed as ‘Franchise Service’ as alleged by the Revenue? - HELD THAT:- The definition of “Franchise” involves trademark, service mark, trade name or logo (or any such symbol); learned Counsel for the appellants submits that the expression “any such symbol” should be read with the preceding words and should not be extended beyond. The principal of ejusdem generis is agreed, it is found that the name of the university being used by LCs/ RCs cannot be taken to be a trademark, service mark, trade name or logo (or any such symbol). A reading of the MOU does not give an understanding that it is Franchise Agreement. There are force in the argument of the learned Counsel for the appellants that even if it is a Franchise Service, it would be exempt in terms of the Notification discussed above as they are rendered in relation to education.
This Bench while deciding the case of Swift Institute of Engineering and Technology [2019 (4) TMI 1151 - CESTAT CHANDIGARH] held that the appellant-university is not rendering any Franchise Service. The position of Swift Institute of Engineering and Technology and the LCs/ RCs in the impugned case is comparable. In fact, the position of the LCs/ RCs is on a better footing inasmuch as they are conducting courses approved by the appellant-university, who also award degree/ diploma.
The learned Commissioner has grossly overlooked the fact that the appellant university is in total control of the fees, the curriculum and award of degree/ diploma. The LCs/ RCs cannot operate independently just by using the name of the university in the respective area assigned to them - the entire proceedings are based on a grave misconception on the part of Revenue. There is no clarity in the approach of the department vis a vis the serviced provider, service rendered and the consideration in the impugned case. In case the appellant-university is alleged to have rendered any service, say Franchise Service to the LCs/ RCs, they should have received some consideration towards the same. In fact, the university is not getting any consideration from the LCs/ RCs. It is the appellant-university who are paying the LCs/ RCs by way of a percentage of the revenue - It is very clear from the facts of the case and the MOU that the appellant-university is using the services of LCs/ RCs in discharging their statutory function of spreading education. Service tax, if any, is leviable on the LCs/ RCs. However, this is not the case of the Department.
Conclusion - i) The appellants are rendering services related to education, which is exempt from service tax. ii) The alleged service is also exempted under Entry No. 39 of Notification No. 25/2012-ST, dated 20.06.2012, as amended and Notification No. 6/2014 – ST dated 11.07.2014 during the relevant period.
Appeal allowed.
Whether the appellants are rendering any taxable service to the RCs/LCs? - HELD THAT:-
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2025 (3) TMI 269
Recovery of service tax with interest and penalty - correctly determination and declaration of taxable value of services provided during the audit period from April 2015 to June 2017 - exempted services under the Notification No. 25/2012 dated 20.06.2012 - evasion of service tax by misrepresenting the nature of services provided - legal fees expenses.
Exemption of services - HELD THAT:- As per Agreements of the appellant, the nature of services were exempted from service tax viz. Distribution of SIM cards, Recharge Coupons, Supply of Farm Labour for agriculture operation, business facilitator etc. However, as per the copies of Agreements provided by the clients of the appellant, the services related to manpower supply services and other taxable service. The impugned order goes on to note that the appellant had submitted agreement dated NIL of farm labour supply with Gujrat Tea Processors und Packers Ltd., Ahmadabad in which scope of work was mentioned as "Supply of contract Farm labour/workers for agricultural operations and agricultural produce" and contract period was mentioned as 1st April 2015 to 31 March 2017.
The impugned order has established that during the period 2015-16, 2016-17 and 2017-18 (up to June, 2017), the appellant had rendered taxable services which was deliberately suppressed resulting in the evasion of service tax of Rs. 19,81,97,629/-(including cess). We find that in their grounds of appeal, the appellant has stated that as per audited accounts, gross receipts for 2015-16 is Rs. 15,67,08,892/-, for 2016-17 is Rs. 62,16,63,588/- and for first quarter of 2017-18 is Rs. 10,83,21,412/- - apart from merely stating that the impugned order has added the amount shown in 26AS statement with the amount shown in Books of Accounts no evidence has been adduced by the appellant in support of their contention. No one even appeared on the day this case was posted for hearing, nor any written submissions have been filed.
It has been clearly established that the services provided by the appellant are covered under the definition of Taxable Services in the light of the changed provisions of the Finance Act, 1994 made applicable with effect from 01.07.2012. We find that the impugned order has given evidence that the appellant had received Rs. 1,52,54,53,781/- from its service recipients against provision of the said taxable services and was liable to pay service tax on said amount.
The impugned order notes that the appellant failed to provide any relevant authentic documents like invoices in original work orders in original etc to justify their claim of duplication of demand in case of few of their clients. In the absence of any authentic evidence in the form of original invoice etc showing the actual value of taxable services provided by the appellant during the relevant period, it is found that there is no reason to interfere with the computation of service tax liability against the appellant in the impugned order. Hence, there is no merit in the above contention of the appellant and the same is rejected.
Legal fees expenses - HELD THAT:- The appellant has shown Legal fees expense of Rs. 2,12,000/-in 2016-17. In this regard, no submission was made by the appellant nor have they contested the applicability of Service Tax on the said expense. In absence of any reply or any supporting documents, it is held that Legal fees expense incurred by the appellant are expenses towards Legal services. Accordingly, Service Tax amounting to Rs. 31800/- on Legal Fee expense incurred by the appellant during the period F.Y. 2016-17 is upheld.
Conclusion - i) The appellant's deliberate misrepresentation of service nature and forgery of documents constituted a clear intent to evade service tax. ii) The imposition of interest and penalties was justified given the appellant's failure to deposit collected service tax and misrepresentation of taxable services. iii) The appellant's claims of duplication in service tax computation were unsupported by evidence, leading to the rejection of these claims. iv) The service tax liability on legal fees under RCM was upheld due to the lack of contestation or evidence from the appellant.
There are no infirmity in the impugned order - appeal dismissed.
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2025 (3) TMI 268
Classification of services - construction of complex service or not - services provided by the appellant, Allahabad Development Authority (ADA) - denial of benefit of abatement - extended period of limitation.
Classification of services - construction of complex service or not - services provided by the appellant, Allahabad Development Authority (ADA) - HELD THAT:- The issue involved in the present case is squarely covered by the decision of Hon’ble jurisdictional Allahabad High Court in the case of GREATER NOIDA INDUSTRIAL DEV. AUTHORITY VERSUS COMMR. OF CUS., C. EX. [2015 (4) TMI 1231 - ALLAHABAD HIGH COURT] by holding that 'The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account. Such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. Therefore, such activities assigned to be performed by a sovereign/public authority under the provisions of any law, do not constitute taxable services. Any amount/fee collected in such cases are not to be treated as consideration for the purposes of levy of Service Tax.'
The decision of the Tribunal in case Greater Noida Industrial Development Authority [2014 (9) TMI 306 - CESTAT NEW DELHI] has not been agreed to by the larger bench of Tribunal in case of Rajasthan State Industrial Development and Investment Corporation Ltd. [2025 (2) TMI 211 - CESTAT NEW DELHI - LB] and Larger Bench has observed settled the issue stating 'The value of “premium” or “salami” is exigible to service tax under “renting of immovable property” for the period prior to 01.07.2012 under section 65(105)(zzzz) of the Finance Act and from 01.07.2012 under section 66B of the Finance Act.'
The submission made by the appellant that they are not liable to pay service tax being government authority in respect of the services in dispute, is thus devoid of merits.
Denial of abatement - HELD THAT:- The appellant have claimed benefit of abatement for determination of the value of taxable services provided by them which has been denied for production of sufficient documents admissibility. Denial of such abatement cannot be justified and the value of taxable services needs to be determined after allowing for abatement either under the composition scheme or on the basis of actual documents, if documents produced. The said view is in line with the decision of Hon’ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] wherein following has been held that 'It is interesting to note that while introducing the concept of service tax on indivisible works contracts various exclusions are also made such as works contracts in respect of roads, airports, airways transport, bridges, tunnels, and dams. These infrastructure projects have been excluded and continue to be excluded presumably because they are conceived in the national interest. If learned counsel for the revenue were right, each of these excluded works contracts could be taxed under the five sub-heads of Section 65(105) contained in the Finance Act, 1994.'
For redetermination of value of taxable services, the matter remanded back to the Original Authority after allowing the abatement.
Invocation of extended period of limitation - HELD THAT:- Appellant being a development authority duly constituted by the Government under Section-4 of the Uttar Pradesh Town Planning and Development Act on 20 August 1974 by the Government’s release dated 09-08-1974 to solve the complex housing problem arising out of the pressure of this growing population, cannot be imputed with intention to evade payment off service tax. Hence, there are no merits in invocation of extended period of limitation for making this demand - the demand for normal period of limitation upheld.
Conclusion - i) ADA's activities are classifiable under "construction of complex service" and are subject to service tax. ii) The exemptions claimed by ADA were not applicable, as the services were not statutory functions. iii) There are no merits in invocation of extended period of limitation for making this demand.
Matter is remanded back to the Original Authority for consideration and de-novo adjudication - Appeal allowed in part.
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2025 (3) TMI 267
Liability of sub-contractor to pay service tax when the main contractor has already discharged the service tax liability on the entire contract value - Commercial or Industrial Construction Service - Retrospective applicability of the Circular - invocation of extended period of limitation - interest and penalties - HELD THAT:- Even if the main contractor pays Service Tax on the full amount, the sub-contractor shall be liable to pay Service Tax for the services rendered by them to the main contractor.
It is found that during period under dispute, Trade Notice. No.53-C.E (service Tax) /97 dated 04.07.1997 was in existence, which clarified that the sub contractor is not liable to pay service tax when the main contractor discharges service tax on the entire value. Thus, the appellant cannot be held responsible for non payment of service tax for the period under dispute.
Retrospective applicability of the Circular - HELD THAT:- The circular is oppressive in nature in-as-much-as it has taken a diagonally opposite view that has been taken in the Trade Notice. This circular has put the burden of discharging the liability of service tax to the sub- contractor. It has been held in the case of Commissioner of Central Excise, Bangalore Vs. Mysore Electrical Industries Ltd. [2006 (11) TMI 202 - SUPREME COURT] and also in the case of Suchitra Components Ltd Vs Commissioner of C. Ex, Guntur [2007 (1) TMI 4 - SUPREME COURT] that a beneficial circular has to be applied retrospectively while an oppressive circular has to be applied prospectively. Thus, the said Circular cannot be applied retrospectively.
Invocation of extended period of limitation - HELD THAT:- The appellant have not suppressed any information from the department. The appellant has followed the clarification issued in the Trade Notice. No.53-C.E (service Tax) /97 dated 04.07.1997. They have regularly filed ST-3 returns and declared in the ST- 3 returns that they have not paid service tax as a sub-contractor as the principal contractor paid service tax. The departmental audit conducted on February 20, 2008 has not issued any objection for non-payment of service tax as a sub-contractor - the extended period of limitation was not applicable due to the absence of suppression or misstatement by the appellant.
Interest and penalties - HELD THAT:- Since the demand of service tax is not sustained, there is no question of demanding interest and imposing penalties.
Conclusion - A sub-contractor would be liable to pay Service Tax even if the main contractor has discharged Service Tax liability on the activity undertaken by the sub-contractor in pursuance of the contract. Extended period of limitation as well as interest and penalties set aside.
The impugned order set aside - appeal allowed.
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2025 (3) TMI 266
Classification of services - mining services or not - transportation services provided by the Appellant within the mines - HELD THAT:- The appellant has rendered the activities of "Transportation within the mines" and the said services cannot be classified under the category of "Mining Services”. It is observed that the ld. adjudicating authority has classified the said transportation services with incidental loading, and confirmed the demand, under the category of "Mining Services" on the ground that the said services are provided within the Mines. However, going by the scope of works under the contract and applying the principles of classification set out under sections 65A and 66F of the Finance Act, 1994, it is observed that the said services cannot be taxed under the category of "Mining Services”. It is clear that the services are appropriately classifiable under the category of "Transportation Services" on which the Appellant is not liable to pay Service Tax.
Conclusion - The transport services are logistic services which are not understood as a mining activity in the common parlance. The activity of transportation is not understood as an activity in relation to mining of mineral, oil or gas. Transport services are 'post mining activity’ and hence, the transport services provided by the appellant cannot be classified under "Mining Services”. The demand of Service Tax under the category of ‘Mining Services’ is not sustainable.
Appeal allowed.
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2025 (3) TMI 265
Proceedings for demand of tax against a deceased proprietor, to be continued against his legal heirs or not - legal heir has the locus standi to challenge the impugned order or not - HELD THAT:- All the proceedings for demand of tax etc are alive till the proprietor is alive and will die with him, as has been held by Hon’ble Supreme Court in the case of M/s Shabina Abraham [2015 (7) TMI 1036 - SUPREME COURT].
As the death certificate of the proprietor is available in the file, there are o merits for entertaining this appeal. The proceedings initiated against the deceased proprietor of proprietorship firm could not have been continued against his legal heir. In terms of Section 22, if legal heir or any person intends to make a claim against this appeal he should have file an appeal under Rule 22 and that was possible only when the appeal was filed before the date of death of proprietor and in this case that is not so. Hence, the appeal is dismissed as not maintainable as Shri Nadeem Akhtar, appellant could not produce the documents as observed by first Appellate Authority evidencing that he has taken over the proprietor ship concern of his father.
Conclusion - The proceedings initiated against the deceased proprietor of proprietorship firm could not have been continued against his legal heir.
Appeal dismissed.
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