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Service Tax - Case Laws
Showing 21 to 40 of 127 Records
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2013 (6) TMI 645
Penalty - Non deposit of amount of service tax collected from the client - Held that:- since there is no dispute that the appellant had already collected the amount of service tax liability which has been confirmed and upheld by the first appellate authority, the appellant is liable to penal provisions under Section 76.
Penalty u/s 78 - Held that:- penalty is liable to be imposed on the appellant under Section 78, as they have collected the amount of service tax from their clients and not reflected but said collected service tax liability in half yearly return filed with the revenue authorities, appellant was correctly visited with penalty. - the first appellate authority having reduced the service tax liability on the appellant to Rs.2,47,032/- has not given an option to the appellant for discharge of the penalty under the provisions of Section 78 which needs to be extended to the appellant. - Following the decision in the case of Akash Fashions [2009 (1) TMI 113 - GUJARAT HIGH COURT] benefit of payment of penalty of 25% extend to the appellant.
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2013 (6) TMI 644
Recovery - stay application is pending before CESTAT - petitioner filed an affidavit stating that she is willing to permit the respondent to retain 50% of Rs.29 ,53,000 /- as a per-condition for filing the appeal before CESTAT provided the respondent effects refund of balance of 50% i.e. Rs.14,76,500 /-. That affidavit is taken on record. - Held that:- Recording the submission of the learned counsel and taking on record the affidavit, this petition is disposed of with a direction to the CESTAT to consider the stay application forthwith and pass orders as regards the balance of 50% of the tax demand and respondent is directed to refund Rs.14 ,76,500 /- within a week.
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2013 (6) TMI 643
Renting of Immovable Property - taxability of lease of factory premises with plant and machinery - taxability of amount received towards maintenance and repair charges to keep the plant and machinery in good condition - Held that:- There is no dispute in the instant case that the property rented out is an immovable property and the renting has been for use for the furtherance of business or commerce.
The transaction undertaken by the appellant fails within the definition of ‘renting of immovable property' as defined in Section 65(105)(zzzz) above and, therefore, the appellant is prima facie, liable to pay service tax on the rent amounts received by them. As regards the maintenance and repair costs incurred by the lessee, we are of the prima facie view that the appellant is not the service provider and there is no liability on the appellant in respect of those transactions. Since the appellant has already paid the service tax amount on the lease amount received, though under protest, the same is sufficient for hearing of the appeals. - stay granted.
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2013 (6) TMI 642
Cenvat Credit - Input services - place of removal - GTA Service - Outward transportation - activity relating to manufacturing - Held that:- first appellate authority was following the law as has been decided by the various decisions of this bench and more specifically Rolex Mills Pvt. Ltd. [2008 (2) TMI 770 - CESTAT, AHMEDABAD] and Adani Pharmachem Pvt. Ltd. [2008 (7) TMI 102 - CESTAT AHMEDABAD] - in respect of export goods, the 'place of removal' is the port of loading. Therefore, all the services upto the port of export are input services and service tax paid on such input services is eligible for cenvat credit. - Decided in favor of assessee.
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2013 (6) TMI 641
Penalty for late filing of Nil return - Held that:- in view of the Board's Circular No.97/8/07-ST dated 23.08.2007, in the event, no service is rendered by the service provider, there is no requirement to file ST-3 Returns. - there is nothing contrary to that circular - as per Rule 7C of the Service Tax Rules, in the event, 'nil' returns are filed, the assessing officer had the discretion to waive the late fees for filing the ST-3 Returns. In my view, it is a fit case to invoke the proviso to Rule 7C and waive the late fees relating to the nil returns filed by the appellant during the period April, 2005 to March, 2008. - Penalty dropped.
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2013 (6) TMI 640
COD clearance - earlier appeal was dismissed for non clearance - Now the appellant has filed this restoration application relying on the decision of the Apex Court in the case of Electronics Corporation of India Vs. Union of India - 2011 (2) TMI 3 - Supreme Court - The issue whether appeals which were already considered by the Committee on Disputes and a decision taken not to allow either side to pursue further appellate remedies, the matter can be reopened in the light of the decision in the case of Electronics Corporation of India (supra), was decided by the Larger Bench of the Tribunal in Burn Standard Co. Ltd. Vs. CCE - [2013 (1) TMI 441 - CESTAT, KOLKATA] - Since the matter is no longer res integra - Application dismissed.
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2013 (6) TMI 618
Cenvat Credit - Input Services - housekeeping services keeping he factory premises neat and clean and construction services for construction of certain office rooms in the factory premises. - Held that:- So far as “construction services” is concerned, the same undisputedly has been used for construction of office room in the factory premises. - the definition of input service specifically covers the services used in relation to setting up, modernization, renovation or repairs of a factory, premises. Thus the construction service used for construction of office rooms of the appellant’s factory was specifically covered by the definition of input service during the period in dispute. - Decided in favor of assessee.
As regards the housekeeping service, the same undisputedly has been used for keeping the factory premises neat and clean which is a statutory requirement of Section 11 of the Factories Act, 1948. In view of this, the service have to be treated as services used by the manufacturer in or in relation to the manufacture of final product as without compliance with provision of the Factories Act, manufacturing operations are not possible. - Credit allowed. - Decided in favor of assessee.
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2013 (6) TMI 617
Cenvat Credit - Input Services - The services are certification of the factory work, payment made to advocates for legal services related to manufacturing activities, repair and maintenance of the factory, audit and accounting of the factory, packaging services for export purposes, advertisement expenses, quality upgradation and so on. - Held that:- From the submissions made by the appellant, the services on which credit has been availed relate to audit and accounting services, repair and maintenance services, packaging service, legal services etc. All these services have nexus and are integrally connected with the business of manufacturing and therefore, they are all eligible input service as defined in Rule 2(l) of the CENVAT Credit Rules, 2004. The decision of the Honble High Court of Bombay in the case of Ultratech Cement Ltd. (2010 (10) TMI 13 - BOMBAY HIGH COURT) applies to the facts of this case. - Credit allowed.
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2013 (6) TMI 616
Cenvat Credit - Input Services - commission agent service - nexus with manufacturing - Held that:- Hon’ble Punjab and Haryana High Court in the case of C.C.E, Ludhiana vs. Ambika Overseas [2011 (7) TMI 980 - PUNJAB & HARYANA HIGH COURT] held that the assessee a manufacturer is entitled to the credit of services provided by the Overseas Commission Agent for canvassing and procuring the order as these activities are sale promotion. Revenue relied upon the decision of the Tribunal whereby the Tribunal after relying upon the decision in the case of Maruti Suzuki Ltd. [2009 (8) TMI 14 - SUPREME COURT] held in favour of Revenue. The Hon’ble Supreme Court in the case of Ramala Sahakari Chini Mills Ltd. vs. C.C.E., Meerut I (2010 (11) TMI 34 - SUPREME COURT OF INDIA) referred the matter to Larger Bench for decision on the issue. In these circumstances, and in view of the Hon’ble P & H High Court in the case of Ambika Overseas (2011 (7) TMI 980 - PUNJAB & HARYANA HIGH COURT) which is specific on the issue, therefore, I find that the impugned order is not sustainable and the same is set aside. - Decided in favor of assessee.
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2013 (6) TMI 609
Filing of appeal before Commissioner (Appeals) - time limit - section 85 - Held that:- it is clear, Section 85 provides that any person aggrieved by any decision or order passed by an adjudicating authority can prefer an appeal within three months. Thereafter, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from preferring the appeal, the Commissioner can allow the appeal to be preferred within further period of three months and not beyond that.
In the present case, the appeal has been preferred on 05.10.2009. The order has been passed by the adjudicating authority on 27.01.2009. Copy of the order has been received by the appellant’s son who was the Managing Partner on 07.02.2009. Appellant’s son has died on 23.06.2009. There was enough time to prefer the appeal. The appellant’s son has participated in the proceedings as the Managing Partner of the firm. The knowledge can be attributed to the appellant also who is a partner. Therefore, it cannot be said the appellant was not aware of the order.
Commissioner of Central Excise (Appeals) was justified in dismissing the appeal as barred by time. The appellate Tribunal has rightly confirmed it. - Decided against the assessee.
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2013 (6) TMI 608
Renting of immovable property - levy of service tax - dispute between landlord and tenant - tenant refused to pay as per the terms of contract - Held that:- it is apparent that the first defence taken in the preliminary objection No.1 that the tenant was not liable to pay service tax is a defence prohibited by law inasmuch as service tax on commercial rented properties is an indirect tax and the jurisprudence on indirect tax tells us that the primary liability of the landlord to pay the tax to the Income Tax Authorities can be passed on to the tenant, for the reason as per the law it is the commercial use by the tenant which enhances the utility to the tenant with respect to the property which attracts service tax on commercial properties.
Section 108 of the Transfer of Property Act, 1882 enlists the rights and liabilities of the lessor and the lessee. Suffice would it be to state that clause (l) thereof, casts a legal duty on the lessee to pay or tender the agreed rent at the proper time and proper place. Thus, notwithstanding there being or there not being a term in the lease deed, it certainly would be the duty of every tenant to pay the rent to the landlord as per the agreement. - Decided against the tenant.
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2013 (6) TMI 607
Classification - Supply of cabs - Rent-a-Cab service - It is the contention of the advocate that they did not own the vehicle; that they had hired the same from other vehicle owners and supplied the vehicles to M/s. Mahindra & Mahindra as per the contract. The activity undertaken by them cannot be considered as ‘Rent-a-Cab Service' inasmuch s they have not undertaken any renting. - Held that:- the agreement was for the purpose of supply of vehicles of required specifications. The taxable service means any service provided to any person by a ‘rent-a-cab scheme operator in relation to renting of a cab and the terms rent a cab scheme operator means any person engaged in the business of renting cabs, and the cabs includes both motor cabs, maxi cabs, as defined in the Motor Vehicles Act, 1988. There is no dispute of the fact that the vehicle supplied by the appellant satisfied this criterion.
There is no stipulation either in the Act or in the Rules that the person renting the cabs should also own the vehicles. So long as the person rents a cab either owned by him or cabs procured from elsewhere, the liability to pay service tax would arise and, therefore, the activity underta
Regarding extended period of limitation - Held that:- the show cause notice has been issued within the time-limit specified and the demand is not time-barred. Since the appellant did not file any returns they are rightly liable to penalty under Section 77 and we uphold the same. As regards the imposed under Section 76 the said penalty is attracted for failure to pay service tax by the due dates and there is no mens rea required to impose penalty under the said Section. Therefore, imposition of penalty under Section 76 is also sustainable in law. - Decided against the assessee.
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2013 (6) TMI 606
Cenvat Credit - Input services - export of goods - CHA service - rent-a-cab service - Held that:- So far as the CHA services are concerned, to the extent the same have been used for clearance of imported goods used by the appellant for manufacture the same without any doubt, would be covered by the definition of 'input service' and would be eligible for cenvat credit.
As regards the rent a cab services, the same would be eligible for cenvat credit if rent a cab services had been used by the employees of appellant company for the company's work. The Tribunal in the case of Commissioner of Central Excise, Raipur Vs. Beekay Engg. & Castings Ltd. [2009 (6) TMI 96 - CESTAT, NEW DELHI], Dr. Reddy's Lab Ltd. Vs. Commissioner of Central Excise, Hyderabad, [2009 (9) TMI 287 - CESTAT, BANGALORE] and Commissioner of Central Excise, Vishakhapatnam Vs. Andhra Pradesh Paper Mills Ltd. [2010 (2) TMI 532 - CESTAT, BANGALORE] has held that when rent a cab services is availed by the officials of company for company's work the same would be eligible for cenvat credit.
However the crucial question in this case is as to whether the services, in question, were used for the company's work. Though on this point the appellant from the very beginning, have pleaded that this fact is verifiable from the invoices, the lower authorities have not given any finding on this point. Accordingly on this point the matter requires to be remanded. - Decided in favor of assessee.
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2013 (6) TMI 605
Cenvat Credit - "input service" credit on telephone services which are installed at the residence of the officials - Held that:- the telephones installed at the residences of the officials which are integrally connected with the business of the manufacture of final product of the appellant and the same is covered under Rule 2(l) of the CCR - Credit allowed.
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2013 (6) TMI 590
Cenvat credit of Service Tax relating to rental of immovable property, security guard appointed at the residence of central office and cycle stand, maintenance of registered office at Kolkata and corporate office at New Delhi and telephone/courier services etc. - Held that:- The objection of the lower authorities that such services were not availed at Jaipur but at places other than the place of manufacture, do not carry weight in view of various precedent decision of the Tribunal. In the case of Jaypee Rewa Cement Plant V. CCE, Bhopal [2009 (7) TMI 488 - CESTAT, NEW DELHI], it was observed that input services rendered outside manufacturing premises are eligible for credit if the same are related to business activities. Similarly, in the case of Indian Rail and Industries Ltd. [2006 (8) TMI 7 - CESTAT, MUMBAI], it was observed that there is no such stipulation that the input services must be provided or received in the factory of manufacture.
Inasmuch as there is no dispute about the fact that services disputed in the present appeals are covered by the definition of input services, and are used by the appellants in relation to their business activities at Jaipur, the same are eligible cenvatable input services. - Decided in favor of assessee.
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2013 (6) TMI 588
Constitutional validity of levy of service tax - construction and sale of flats - prospective buyers - Explanations to clauses (zzq) & (zzzh) and clause (zzzzu) of sub-Section 105 of Section 65 inserted by the Finance Act, 2010 - Held that:- it cannot be said that sale or intended sale of a completed building after grant of completion certificate by the Competent Authority stands on the same footing as that of a building, before, during or after construction but before grant of completion certificate. Hence, it cannot be said that equals are being treated unequally or that the classification does not rest on a valid basis. The 'Completion Certificate' is the differentia which keeps apart the constructions to which the Act does not apply.
There is nothing discriminatory or arbitrary in excluding completed constructions, from the purview of service tax, for which no sum is received from the prospective buyer before grant of completion certificate. - The reason for exclusion appears to be that no element of service relating to the construction is involved after completion of the Construction.
Regarding valuation - Held that:- The measure of tax is also not notional as contended; it is the gross value of construction charged by the service provider. Hence, the judgment of the Supreme Court in Rajasthan Chemist Association (2006 (7) TMI 17 - SUPREME COURT OF INDIA) is of no assistance to the petitioners. Any standard having a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy. Character of the levy being service tax on Construction, the gross value of construction clearly will have nexus with the element of service involved in the construction. It is stated that presently 75% of the gross value of Construction is exempted from service tax vide Notification dated 22.06.2010, issued by the Central Government in exercise of the power under Section 93(1) of the Finance Act, 1994. Be that as it may. As all the contentions fail, the writ petitions are liable to be dismissed - Decided against the assessee.
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2013 (6) TMI 587
Renting of immovable property - levy of service tax - dispute between landlord and tenant - tenant refused to pay as per the terms of contract - Held that:- The most crucial aspect which is material for decision of the present case, as noticed by us, is that service tax is neither a property tax nor an outgoing in respect of the premises; it is on the commercial activity carried on. The two expressions property tax and outgoings in respect of the premises are in fact of a common species. Clause 7.1 thus only deals with taxes which are relatable to the property and not the activity carried out in the premises, which is on what service tax is levied.
As service tax on commercial rented properties is an indirect tax and the jurisprudence on indirect tax tells us that the primary liability of the landlord to pay the tax to the Income Tax Authorities can be passed on to the tenant which enhances the utility to the tenant with respect to the property which attracts service tax on commercial properties.
Tenant has to bear the incidence of the service tax and not the landlord.
There is no dispute about the quantum of the amount of service tax which already stands paid by the appellant which is ₹ 37,42,954/- and ₹ 48,27,777/- in the two appeals respectively which will now thus have to be paid by the respondent to the appellant. Since the premises were vacated on 30.09.2011, we consider it appropriate to grant interest from 01.10.2011 till date of payment at the rate of 9% per annum simple interest.
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2013 (6) TMI 586
Constitutional validity of Levy of entertainment tax and service tax on DTH Service - simultaneous levy - whether DTH services is not entertainment - Held that:- even though we have held that by reason of the imperfections pointed out as to the absence of chargeable event not being specified in explicit, unambiguous and clear terms in Section 4-I, the charge cannot be effectuated, yet, on the grounds of violation of Article 14 and the imperfection in the Section creating the impression as though the charge is in the nature of service tax and hence, colourable in character, we have no hesitation in declaring the provision as unconstitutional.
As far as the contentions on Article 19(1)(a) and 19(1)(g) are concerned, we do not find any good ground to accept the plea of the petitioners that levying tax on entertainment is a tax on the premium of expression.
On the question of the chargeable event not specified in Section 4-I of the Act, as to the colourable character of Section 4-I, and on the violation of Article 14, we allow the writ petitions holding Section 4-I of the Tamil Nadu Entertainments Tax Act as unconstitutional.
Regarding levy of Service Tax - Held that:- the petitioners have also challenged Section 4-I, stated in the affidavit in paragraph No.4, that the questions raised as to whether the activity of the petitioner would attract service tax liability and whether the levy by the State under the Tamil Nadu Entertainments Tax Act would amount to transgression of powers under Entry 62 List II of Seventh Schedule to the Constitution of India. When the contrary stand taken as regards the challenge on service tax was pointed out to the attention of the learned senior counsel, initially, we were informed that the petitioner had filed a Writ Petition before the Delhi High Court in July, 2012 questioning the levy of service tax. When the petitioner was asked to file an affidavit explaining their conduct in not disclosing the above-said facts of taking diametrically opposite stand from the one conceded before the Delhi High Court, the petitioner had filed an affidavit stating that realising that 88th Constitution Amendment introducing Entry 92C of List I of VII Schedule to the Constitution of India was not notified, the imposition of service tax thus not valid, after obtaining advice from the senior counsels in Delhi, the petitioner has filed the Writ Petition in W.P.No.4302 of 2012 before the Delhi High Court also. Thus the petitioners made the plea that in the absence of Entry 92C List I of VII Schedule to the Constitution of India notified, the Union cannot impose service tax. Before this Court, the petitioner conceded that being a subject falling under Entry 62 List II of VII Schedule to the Constitution of India to tax entertainment, the exclusive power to tax entertainment rested with the State, and the Centre cannot levy service tax. As already seen from the extract from the judgment of the Delhi High Court, the petitioner conceded about its liability to service tax and all that it challenged was the levy of entertainment tax under the Delhi Entertainments and Betting Tax Act.
Regarding non information of case in Delhi High Court - The affidavit states that the lapse in not specifically referring to the stand taken before the Delhi High Court was unintentional and bona fide. The petitioner further states that during the course of the arguments, earnest attempts were made by the petitioner to demonstrate the error in the judgments of the High Court and lapse was there in the affidavit in not specifically referring to the inconsistent stand and there was no intention to suppress the material.
We do not appreciate the attitude shown by the petitioner in suppressing the material fact about its conceding a particular state of affairs on its liability under the Service tax levy. Even though learned counsel appearing for the petitioner submitted that there was no intention, the question is not one of intention, but a question of fairness to the Court in the matter of placing statement of facts truthfully, which, we think, is the basis of the justice delivery system. We may once again point out that but for the State's argument pointing out to the different stand taken, the case would have gone for further argument from the petitioners' side. We wish that the petitioners do not repeat the same tactics before other High Courts. In the light of the material suppression made, we do not find that the petitioners would be justified in advancing its argument further on its challenge on the levy of service tax.
We may also point out that when this Court pointed out to the appeal filed before the Supreme Court challenging the levy of entertainment tax, there is no direct answer explaining the conduct of the petitioners. The petitioners cannot speak in two tongues.
Writ petitions challenging levy of service tax dismissed for suppression of facts from the High Court. - Decided against the assessee.
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2013 (6) TMI 585
Rent-a-Cab service - appellant ut their buses at the disposal of PRTC - Held that:- the stand of the appellants themselves is that they are not providing transport service to PRTC but have given their buses on hire. In view of this, following the ratio of the Tribunal judgment in the case of Deepak Transport Bus Service vs. CCE, Pune -III (2012 (6) TMI 390 - CESTAT, Mumbai) we hold that the activity of the appellants would be taxable as rent a cab service under Section 65 (105) (o) and readwith Section 65 (20) and 65 (91) of the Finance Act, 1994.
While upholding that the service provided by the appellants is taxable as rent a cab service, we remand the matters to Commissioner (Appeals) for considering the appellant's plea with regard to their eligibility for the benefit of Notifications No. 1/2006-ST and 6/2005-ST and re-quantification the duty liability and also redetermination of the quantum of penalty which would be proportionate to service tax demands upheld.
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2013 (6) TMI 584
Stay - Commercial and Industrial Construction Services - period 2004-05 to 2009-10 - Held that:- the issue needs to be gone into details as the appellant is claiming the contracts executed by them as a works contract services and service rendered to Government Organizations which are not of commercial in nature. We also have to go into the appellant's claim as to that extended period of limitation cannot be invoked by the lower authorities. All these things will take some time and needs to be considered only at the time of final disposal of appeal. - Appellant directed to make pre-deposit of Rs. 50 Lacks.
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