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Service Tax - Case Laws

Showing 41 to 60 of 976 Records

• 2012 (12) TMI 643 - CESTAT, CHENNAI
  

  Delay in duty payment - penalty under Rule 27 or Rule 25 - seeking Waiver of penalty u/s 11AC – Held that:- As no intention on the part of the respondent assessee to evade any payment of duty and as soon as liquidity was available, duty was paid along with interest, thus following the decision in case of COMMISSIONER OF C. EX. & CUSTOMS Versus SAURASHTRA CEMENT LTD. [2010 (9) TMI 422 - GUJARAT HIGH COURT] penalty could not be levied under Rule 25 of the Rules and for the alleged default, the penalty was restricted to Rs. 5,000/- under Rule 27 of the Rules.

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• 2012 (12) TMI 642 - CESTAT AHMEDABAD
  

  Non payment of service tax to the government - invoking extended period of limitation - Held that:- Assessee cannot escape the responsibility of ensuring that records are maintained in accordance with law and credits are availed and utilized properly. He did not made effort to find out even at any stage as to whether the service providers were in existence and whether they had paid service tax collected from them to the government. Thus failure on part of appellant proved the invocation of extended time limit for demand in this case is sustainable. Further, for the same reasons, the first appellant is liable to penalty also.

  Cenvat credit - denial as services used for both exempted and non exempted goods - Held that:- Admittedly the first appellant was engaged in the manufacture of animal feed which is exempted and was also engaged in trading activity & was obliged by law to maintain separate records failing which reverse the credit relatable to the trading activity. In fact there is no proposal for demanding 8%/10% on the exempted goods and therefore one has to take it that it is their case that the demand is on the ground that appellant was engaged in the manufacture of excisable goods and trading of other goods. Once the assessee is considered to be aware of statutory provisions relating to availment of credit and his activities, the normal conclusion of a ordinary prudent person is that the assessee had deliberately avoided reversing the credit attributable to trading activity and thereby suppressing/mis-declaring the fact of availment of credit to the department. Therefore the conclusions of the lower authorities to confirm the demand with interest and imposition of penalty has to be upheld - appeal filed by the first appellant has no merits and accordingly is rejected.

  Penalty on second appellant – Held that:- Shri Javed Shaikh, second appellant being an employee cannot be said that he derived any extra benefit because of the lapses it has not been shown that there was any motive on his part. Since penalty has been imposed on the first appellant penalty imposed on is set aside.

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• 2012 (12) TMI 614 - CESTAT MUMBAI
  

  Waiver of pre-deposit, interest & penalty – Scientific and Technical Consultancy Services u/s 65(92) - Held that:- Prior to May, 2008 service tax is payable on receipt basis. Assessee has not received any amount towards rendered service at all although they have made entries in their books of account. Stay granted.

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• 2012 (12) TMI 613 - CESTAT AHMEDABAD
  

  Cargo Handling Service – Demand of Service Tax - Assessee being an individual rendering services to M/s. J.M. Baxi & Co. as regards loading & unloading of cargo – Held that:- If an individual is undertaking activity of loading and unloading of cargo, it would not come under the purview of service tax as Cargo Handling Services. Following the decision in case of MODI CONSTRUCTION COMPANY (2011 (4) TMI 598 - JHARKHAND HIGH COURT) held that any services provided within the factory premises would not come under the definition of Cargo Handling Services. In favour of assessee

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• 2012 (12) TMI 612 - CESTAT NEW DELHI
  

  Cenvat credit denied - application for inclusion of GTA service in the centralized registration pending - Held that:- Final rejection of centralized registration cannot be held to be a justifiable reason for denial of the credit. Apart from the fact that during the said period, the application was pending in the office of Deputy Commissioner, without their being any decision taken by him on the same, there is otherwise no dispute about the availability of the credit to the appellant. The substantial benefit, if otherwise available, cannot be denied on the technical and procedural grounds - appellant was otherwise entitled to the benefit of Cenvat credit of Service Tax paid on GTA services, so received by them, the denial of the same on the ground that the credit was availed on the basis of invoices raised by their head office is neither justifiable nor warranted.

  Tax paid on the freight for dutiable transportation of the goods from the depots is also admissible as credit considering the earlier decision of the Tribunal in the case of appellants own case, vide Order dated 15.12.11 - in favour of assessee.

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• 2012 (12) TMI 581 - CESTAT MUMBAI
  

  Refund claim - Cenvat Credit on Service Tax distributed by the Head Office - Denial as Head Office was not registered as Input service distributor - Held that:- Requirement for registration came only in 2006 and prior to this there was no such requirement. Therefore, what is required to be seen is whether the input service in respect of which the credit is taken is required for providing the output service and has nexus with the rendering of the output service. If the nexus can be established, the appellant would be rightly entitled for the credit of the service tax paid thereon.

  Service tax paid on leased telecom lines - denial of Refund claim - Held that:- Appellants are rightly entitled for Service tax credit and refund thereon for the reason that the exports are undertaken electronically and to undertake this export they need dedicated lines from their office premises to the telecom authorities, who will receive the data for transmitting the same abroad. Without these dedicated lines, the appellant cannot deliver the output service and, therefore, leasing of telecom lines by the telecom authorities is an eligible input service as defined in Rule 2(l) of the CENVAT Credit Rules, 2004.

  No export of Output Service - Held that:- The view adopted by Revenue that appellant has not exported the output service because the service was transmitted through telecom service providers in India is completely irrational as when data is transmitted through electronic medium, it has to be first transmitted to a server of the telecom authorities in India and thereafter uplinked/transmitted to the foreign service recipient - foreign service recipient has received the output service and has made payment in convertible foreign exchange to the appellant towards the services received, payment has been received by the Head Office of the appellant unit in Bombay whereas they are situated in Nashik and the appellant needs to produce evidence to show that the payments which were received in convertible foreign exchange in Bombay related to the exports made by the units at Nashik - remand the matter to the original adjudicating authority subject to verification of these facts through documentary evidence to consider the refund claim of the appellant - in favour of assessee by way of remand.

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• 2012 (12) TMI 580 - CESTAT MUMBAI
  

  Application for Modification - applicant submits that they have paid the entire amount of service tax - waiver claimed of pre-deposit of Duty, Interest and Penalty - Held that:- Contention of Applicant was that there was a bonafide belief that they have paid the entire amount of service tax and that the statement was made before this Tribunal on 23/05/2012 on the basis of certificate issued by the Chartered Accountant wherein it has been stated that the demand raised in the show-cause notice, the whole of the service tax has been paid. As per the applicant the amount payable is only Rs. 6,24,51,219/-, which has been paid. But as per Revenue entire amount of service tax in dispute was Rs.18,08,18,228/- In the interest of justice, the applicant directed to make a pre-deposit the balance amount of service tax in dispute apart from already made along with 25% of penalty as directed by this Tribunal by order dated 28/06/2012 within a further period of eight weeks and report compliance.

  Show-cause notice has been replied by the appellant and they have tendered unconditional apology for the inconvenience caused to this Bench, therefore, withdraw the show-cause notice issued to the applicant.

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• 2012 (12) TMI 579 - CESTAT AHMEDABAD
  

  Discharge of service tax liability by the agent of the assessee - payment of service tax under the wrong head - Held that:- In this set of facts, service tax liability has been discharged by Matrix on the above said activity cannot be denied merely on the ground that it has paid under Advertisement Agency Service. As M/s Matrix has paid the service tax under the category of Advertisement Agency Service that does not mean that M/s Matrix has not paid service tax on behalf of the appellant. By mere paying the service tax liability under wrong head does not meant that service tax liability has not been discharged. - In this case, appellant has appointed M/s Matrix as her agent to discharge her service tax liability on her behalf and same has been discharged by M/s Matrix. - In favour of assessee

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• 2012 (12) TMI 542 - CESTAT AHMEDABAD
  

  Assessee provide services in the state of J&K and to SEZ - Service provided in the state of J&K does not attract service tax leviable under Sec.66 - Services provided to the units situated in SEZ is exempted vide Notification 4/2004-ST dated 31.3.2004.

  Assessee had not maintained separate accounts in respect of receipt, consumption and inventory of input services meant for use in providing output service - Which are chargeable to tax as well as exempted service, as provided under Rule 6(2) of CCR, 2004 - Availed cenvat credit on the entire input services received by them – Revenue contended that if cenvat credit on common input services is not taken, appellant is required to maintain separate accounts – Assessee argued that once a service tax paid on input services has not been taken at all, the provisions of Rule 6(3)(c) of CCR would not be applicable – Issue remand back to revenue and waive the requirement of pre-deposit of service tax demanded by Commissioner.

  Held that:- As the assessee did not fulfill their obligation which has resulted in impugned order. Therefore an amount of pre-deposit required to be deposit by assessee. And also submit copies of the relevant documents with a worksheet showing the details of documents on the basis of which credit is taken and the details of credit utilized. Appeal remand back to AO

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• 2012 (12) TMI 541 - CESTAT AHMEDABAD
  

  Travel Agent Services - Demand of Service Tax, Interest and Penalty - denial of SSI benefit - Held that:- In view of the fact that during the previous year appellants were availing the SSI benefit, denial of the same in the next year on the ground of non-filing of declaration is not appropriate.

  Even after surrendering of certificate and treating it as declaration, it was the bounden duty of the appellants to register themselves when they crossed the turn over of Rs.3 lakhs and to start following the statutory procedure, but they have failed to do so. Since they have failed to do so demand for service tax of Rs. 2930/- with interest is upheld and penalty under section 76 and Section 78 at Rs. 2930/- each is upheld. Penalty amounting to Rs. 1000/- u/s. 77 also confirmed.

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• 2012 (12) TMI 540 - CESTAT MUMBAI
  

  Maintainability of rectification of mistake - difference of opinion between Member (Judicial) & Member (Technical) - Promotion or marketing of logo or brand - demand under BAS - Held that:- No mistake apparent in the Tribunal's order while arriving at decision by both the members independently.

  Reliance placed on the decision of Suzlon Infrastructure Ltd. (2009 (5) TMI 64 - BOMBAY HIGH COURT) wherein the Hon'ble High Court hold that the application for ROM is maintainable but in that case, both the Members had not given finding on some issues but in this present case Member (Judicial) allowed the appeal on merit and Member (Technical) dealt with all the issues. Therefore, the decision of Suzlon Infrastructure Ltd. (supra) is not applicable to the facts of this case - application for ROM is dismissed.

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• 2012 (12) TMI 516 - CESTAT KOLKATA
  

  Condonation of delay - Non service of impugned order in appeal - Held that:- Commissioner (Appeals) has rejected the appeal on the ground of delay in filing the appeal before him but delay was for 32 days, which was within condonable limit of three months. As before the Commissioner (Appeals) the appellants have filed an application seeking condonation of delay along with an affidavit and medical certificate, which was not considered by the him and the condonation delay application was rejected for non-submission of medical certificate. Commissioner (Appeals) has also not decided the case on merit.

  Commissioner (Appeals) order is set aside and the matter is remanded back to re-consider condonation of 32 days delay taking into consideration the affidavit and medical certificate annexed to the COD application - in favour of assessee by way of remand.

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• 2012 (12) TMI 515 - CESTAT KOLKATA
  

  Modification of Stay Order - directing to make the predeposit of 50% of the Service Tax - notice of hearing of the Stay Petition not served to Applicant - Held that:- Tribunal after having exercised jurisdiction for the purposes of passing an order for waiver of pre-deposit under the proviso to Section 35F cannot modify that order subsequently like an appellate authority, nor can keep tinkering with the order as and when applications for modification of the order are filed.

  It is significant to notice that the Supreme Court has ruled in C.C.E. v. A.S.C.U. Ltd.,[2002 (12) TMI 87 - SUPREME COURT OF INDIA] that the Tribunal does not even have the power to review its orders while exercising its appellate power under Section 35C when this is the legal position with regard to the exercise of the power in respect of the main appeal itself, it cannot be higher while passing orders in exercise of the power under the proviso to Section 35F, which is a provision stipulating the condition for maintainability of the appeal - Appeal is dismissed for non-compliance with the provisions of Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - miscellaneous Application for modification of the Stay Order dismissed.

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• 2012 (12) TMI 514 - CESTAT NEW DELHI
  

  Banking and other Financial services - Bank run by co-operative society - Demand of Service Tax - Held that:- Appellants contention that being a bank run by co-operative society, they would not be liable to pay Service Tax is not tenable and was not found favour with as relying on decision of M/s. Madhav Nagrik Sahkari Bank Ltd. vs. Commissioner of Central Excise, [2012 (3) TMI 283 - CESTAT, NEW DELHI] - demands accordingly confirmed.

  Simultaneous penalty u/s 76 & 78 - Held that:- As decided in CCE versus First Flight Courier Ltd. [2011 (1) TMI 52 - HIGH COURT OF PUNJAB AND HARYANA] that simultaneous penalties under section 76 and 78 are not warranted - while upholding the penalty u/s 76 and 77, set aside the penalty imposed u/s 78 of the Finance Act, 1994.

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• 2012 (12) TMI 479 - CESTAT AHMEDABAD
  

  Manpower Recruitment and Supply Agency services - Waiver of pre-deposit confirmed as Service Tax, Interest and Penalty - Held that:- The terms in the contract indicates that the appellant was awarded a contract for functioning or carrying out a particular activity within the cement plant of M/s. Ultra Tech Cement Limited. As that appellant did not appear before the adjudicating authority who in turn did not have a privilege of going through the contract the entire issue needs to be reconsidered by the adjudicating authority - remit the matter back to the adjudicating authority to reconsider the issue afresh after following the principles of natural justice.

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• 2012 (12) TMI 478 - CESTAT NEW DELHI
  

  Reconditioning of old and worn out rollers - not paying of Central Excise duty - service tax demand - assessee invoking period of limitation - Held that:- Activity of reconditioning of old and worn out shells was liable to Service Tax only with effect from 16.6.2005. As in the present case the period involved in the present appeal is upto February, 2006, demand upto 16.6.2005 was not sustainable on merits.

  The period is upto February, 2006 for which the return is required to be filed on 25.4.2006, show cause notice stand issued on 27.4.2007 i.e. beyond the normal period of limitation. The appellants have reversed the credit in respect of pig iron used in the manufacture of excisable goods as also for re-shelling of old rollers. This fact stand duly reflected in their RG 23A Part II which was filed along with the return. As such, it cannot be said that the appellant has suppressed the activity of re-shelling of rollers from the Revenue with an intention to evade the duty, thus merits in the appellants plea of limitation. The demand is also held to be barred by limitation - in favour of assessee.

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• 2012 (12) TMI 477 - CESTAT NEW DELHI
  

  Classification of service - Broker v/s Commission agent - demand of service tax under Business Auxiliary Service - activities of the appellants as ship brokers - period of dispute from October 2003 to September 2009 - Held that:- Definition of 'commission agent' as given in Section 65(19) during period w.e.f. 16/5/05 and as given in exemption Notification No. 13/03-ST dated 20/6/03 for the period prior to 16/5/05, the emphasis is on the 'commission agent' acting 'on behalf of another person. Thus, a 'commission agent' acts on behalf of a principal and sells or buys the goods or provides or receives the services on behalf of his principal for some commission & can also deal with the goods or services, collect payment for sale price of goods or services sold or provide guarantee for the payment or undertake any activity relating to such sale or purchase of such goods or service.

  A ship broker is essentially a broker, a specialist intermediaries for negotiations between ship owner and charterers who use the ship to transport some cargo or between the buyers and sellers of the ship. A ship broker bring together a ship owner who wants employment/fixture for his ship located at a particular Port and ship charterer who requires a particular type of ship at or around a particular Port to transport some cargo. They help in negotiating the terms of the charter and finalisation of charter-party agreement and also assist both the parties in compliance of the charter - party terms and full and final settlement of all the dues and claims. The ship broker also acts as an intermediary for bringing together a ship owner who wants to sell his ship and the prospective buyer and assisting in sale of the ship. The essential ingredient of a 'Commission agents' service is acting on behalf of a principal which is missing is the case of the appellants. From the nature of their activity it is clear that brokers are purely intermediaries who do not act on behalf of either ship owner or the charterer and, therefore, they cannot be said to be commission agents & not covered by the definition of 'Business Auxiliary Service" - in favour of assessee.

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• 2012 (12) TMI 425 - CESTAT, AHMEDABAD
  

  Classification of taxable services u/s 65A - Supply of Tangible Goods service u/s Section 65(105)(zzzzj) versus Mining of Mineral, Oil or Gas service' u/s Section 65(105)(zzzy) versus Survey and Exploration of Mineral, Oil and Gas service – Rules of interpretation – use of own equipment for providing services - drilling of wells for production/exploitation Hydrocarbons (developmental drilling) is put along with site formation and clearance and excavation and earth moving, which are not part of Survey and exploration of mineral service - contemporanea exposito and intention of the Government – Extended period of limitation.

  Held that:- There are five elements [i.e. A source rock, Migration, Trap, Seal or cap rock and Reservoir] which are required to be complied with to identify source of potential petroleum Hydrocarbon drill location. - In our opinion, this is what is covered by the definition of Survey and Exploration as far as oil/gas is concerned. - the wells drilled as per the GSPC's specification in the location identified after ensuring that the five elements of prospect are existing in the activity subsequent to survey and cannot be said to be a part of the service which is preliminary to mining or drilling activity.

  The fact that SOTG service was introduced in 2008 does not mean that the same service was not covered by any service earlier. - Decision in the case of Kopran Limited (2009 (4) TMI 121 - CESTAT, MUMBAI)followed.

  Regarding Extended period of limitation - held that:- It is also settled law that if two views are possible and if an assessee entertains a belief that he is not liable to pay duty or tax, intention to evade duty, suppression/mis-declaration cannot be attributed and therefore, extended period of limitation for demanding duty/tax cannot be invoked. Therefore, even if our finding on classification aspect turns out to be incorrect, extended period of limitation could not have been invoked.

  It is settled law that object and content of the contracts cannot be determined and decided by looking at one paragraph or one clause but the whole contract has to be seen as a whole and considered.

  Regarding demand within normal period of limitation – Whether service provided is covered by the definition of Mining of Oil or Gas Service - held that:- , activities undertaken has direct nexus with Mining as the activity undertaken is drilling of wells for exploration of minerals. - The decision in the case of Indian National Shipowners Association (2010 (12) TMI 12 - SUPREME COURT OF INDIA) distinguished.

  Whether the service provided by M/s. Atwood can be classified as SOTG service with effect from 16.5.2008. – held that:- The main contention of SOTG i.e. allowing another person to use the rigs without giving legal right of possession are fulfilled in this case. Further, we also find that the clarification issued by the Ministry at the time of introduction of this service are also applicable to the facts of this case. Under these circumstances, we have to hold that after 16.5.2008, the service provided by M/s. Atwood has to be classified under SOTG services only.

  Penalty u/s 78 – waiver of penalty u/s 80 – assessee submitted that it was not interested in entering into litigation and believed in paying the taxes. - It was submitted that even though they believed that they had a case for non-payment of tax prior to 16.5.2008, to avoid litigation they had paid the entire amount of service tax due with interest – held that:- provisions of Section 80 are required to be invoked for waiving penalty imposed under Section 78 of the Finance Act, 1994

  Once the penalty is waived under Section 78 of Finance Act, 1994, the question that will remain is penalty under Section 76 or 77. As regards penalty under Section 76, M/s. Atwood get protection from section 73 (3) of Finance Act, 1994

  Demand confirmed for service tax with interest for the period 01.6.2007 onwards under Mining Service up to 16.5.2008 and thereafter, under SOTG service as applicable with interest.

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• 2012 (12) TMI 424 - CESTAT, DELHI (LB)
  

  Scope of the term Export - Money transfer business – Location of the consumer - Whether the issue as to what constitutes export of services is to be determined with reference to provisions in Export of service Rules, 2005 only – Difference of opinion – held that:- The term "export" has not been defined either in Article 286 (1)(b) or in any of the article of the Constitution of India. Though the Apex Court's judgments in the case of the State of Kerala vs. The Cochin Coal Company Ltd. [1960 (10) TMI 57 - SUPREME COURT OF INDIA] and Burmah Shell Oil Storage & Distribution Co. of India vs. Commercial Tax Officer & Others reported in [1960 (9) TMI 70 - SUPREME COURT OF INDIA] explain the meaning of the term "export", the ratio of these judgments which are with regard to export of goods, is not relevant for determining what constitutes the export of services. There is no question of Export of Service Rules, 2005, being in conflict with Article 286 (1) (b) of the Constitution of India.

  The Export of Service Rules, 2005 are in accordance with the Apex Court's ruling in the Association of Leasing & Financial Service Companies vs. Union of India [2010 (10) TMI 4 - SUPREME COURT] and All India Federation of Tax Practitioners vs. Union of India [2007 (8) TMI 1 - SUPREME COURT ] that service tax is a value added tax, which in turn is a destination based consumption tax in the sense that it is levied on commercial activities, and it is not a charge on the business but a charge on the consumers. There is nothing in Export of Service Rules, 2005 which can be said to be contrary to the principle that a service not consumed in India is not be taxed in India.

  What constitutes export of service is to be determined strictly with reference to the provisions of Export of Service Rules, 2005? Not doing so and leaving this question to be determined by individuals tax payers or tax collectors for each service, based on their deductive ability would result only in total confusion and chaos.

  Money transfer service is being provided by the Western Union from abroad to their clients who approached their offices or the offices of their Agents for remitting money from to friends/relatives in India. The service being provided by the agents and sub agents is delivery of money to the intended beneficiaries of the customers of WU abroad and this service is "business auxiliary service", being provided to Western Union. It is Western Union who is the recipient and consumer of this service provided by their Agents and sub-agents, not the persons, receiving money in India.

  When the person on whose instructions the services in question had been provided by the agents/sub-agents in India, who is liable to make payment for these services and who used the service for his business, is located abroad, the destination of the services in question has to be treated abroad. The destination has to be decided on the basis of the place of consumption, not the place of performance of Service.

  Reimbursement of advertisement and sales promotion activities received from WU is not taxable as the same are for the services provided to WU, which are export of service.

  When the services provided by the sub-agents have been held to be export of service and hence not liable for service tax, the question of their eligibility for exemption under Notification No. 6/2005-ST is irrelevant and has not been gone into.

  The services provided by the Agents and sub-agents throughout during the period of dispute are classifiable as "Business Auxiliary Service" under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 1994 and the same have been exported in terms of the provisions of Rule 3(1) (iii) read with Rule 3(2) of the Export of Service Rules 2005 and hence no service tax is payable.

  Decided in favor of assessee and against the revenue.

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• 2012 (12) TMI 423 - CALCUTTA HIGH COURT
  

  Demand of service tax on renting of immovable property - Extended period of limitation - Show Cause notice (SCN) has been issued on 18 th April, 2012 in respect of the financial years 2007-2008, 2008-2009, 2009-2010 and 2010-2011 - The allegation against the petitioner is that the petitioner did not disclose the material fact that the petitioner had engaged in providing taxable services and had suppressed facts with intention to evade payment of service tax on the service of “Renting of Immovable Property”. It is alleged that the assessee had thus failed to comply with the requirements of the statutory provisions of the Finance Act, 1994 and the rules made thereunder and had wilfully suppressed facts related to providing/receiving of the said service with intent to evade payment of service tax.

  Held that:- Prima facie, there is no whisper in the impugned notice of the facts which have allegedly been suppressed. Prima facie, the vague assertion that the petitioner had wilfully suppressed facts pertaining to providing/receiving the services with intent to evade payment of service tax is unfounded.

  A notice was issued by the Office of the Commissioner, Service Tax, Kolkata dated 13 th April, 2009 calling upon the petitioner to submit copies of lease agreements including list of long term lease agreements. It prima facie appears to this Court that the requisites of the aforesaid notice dated 13 th April, 2009 were complied with.

  The provisions of the Finance Act, 1994 relating to the service of renting of immovable property have been amended by the Finance Act, 2011 with retrospective effect. The amendment with retrospective effect from 1 st June, 2007 makes rent per se a taxable service. Earlier in Home Solution Retail & Anr. Vs. Union of India & Ors. (2009 (4) TMI 14 - DELHI HIGH COURT), the Delhi High Court had held that rent per se was not a taxable service.

  Prima facie, the entire claim except for four receipts as stated above are barred by limitation. Prima facie, jurisdiction has been exercised by wrongly deciding jurisdictional facts. Prime facie the Commissioner of Service Tax has not properly applied his mind to the issue required to be addressed for invoking the extended period of limitation.

  There will accordingly, be an interim order restraining the respondents from giving effect and/or further effect to the impugned show-cause notice till 21 st December, 2012 or until further orders whichever is earlier.

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