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Service Tax - Case Laws
Showing 1 to 20 of 346 Records
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2018 (9) TMI 2086 - CESTAT NEW DELHI
Classification of services - project/ work executed for hydro-electric project alongwith material - classifiable under ‘Works Contract Service’ or under CICS - whether the said work falls under the exclusion clause under the definition of works contract service? - construction made by the respondent-assessee for educational institution (not for commercial purpose).
Works contract service or not? - HELD THAT:- A perusal of the order in original and other documents shows that contracts in dispute are composite contracts in which both goods are supplied and services are provided. Further on the composite nature of contracts, involving supply of goods and services, there is no dispute raised by the Revenue. The issue that composite contracts involving supply of goods and services, are ‘works contract’ has been settled by the Apex court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT]. Further, the Hon’ble Supreme Court has held that only contracts of service simpliciter without involving goods, will be covered in the sub clauses of 65(105) - thus, the service in dispute which are composite in nature, are correctly classified under ‘works contract service’.
Commissioner has correctly dropped the demand for the period prior to 01.06.2007 as the works contract were not taxable prior to 01.06.2007. For the period post 01.06.2007 also demand cannot be confirmed under ‘Commercial or Industrial Construction service’ under which demand was proposed in the show cause notice, as such lead will cover only service contract simpliciter, not the composite contract. Thus, the demand is not maintainable under ‘Commercial or Industrial Construction service’ for the entire period in dispute.
Whether the construction of Hydro Electric project is not in respect of tunnels or dams, and thus not excluded from entry of ‘Commercial or Industrial Construction Service’ or ‘works contract service’? - HELD THAT:- In the present case in the order in original, the Commissioner has discussed in detail that services in question are in respect of dams and tunnels. Since the services provided in dispute are in respect of dam and tunnel, the same is excluded from the definition of ‘Commercial or Industrial Construction Service’, and not taxable. Thus, the order passed by the Commissioner is correct and maintained, on this issue.
Demand of service tax on construction of educational institute - HELD THAT:- Revenue has not appreciated the definition of Commercial or Industrial Construction service. A perusal of definition shows that to decide the taxability under said service, user of the building, so constructed, is relevant. Clarification has been issued by CBEC Circular No. 80/10/2004-ST, dated 17.09.2004, wherein it is clarified that leviability of service tax would depend upon whether the building or civil structure is used or to be used for commerce or industry - Revenue in the appeal has not produced any evidence to show that building constructed by the Respondent are not used for educational purpose and same are used for commercial purpose. In the absence of any evidence, the finding of the Commissioner is correct and maintained. Moreover, the ground on which appeal is filed is not sustainable in terms of the definition itself.
The appeals filed by the Revenue are dismissed and cross-objection filed by the respondent is disposed of.
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2018 (9) TMI 2001 - PUNJAB & HARYANA HIGH COURT
Liability of Service Tax - sum charged for providing security to various banks in the State of Punjab - Exemption of property and income of a State from Union taxation - HELD THAT:- A perusal of the Article 289 of the Constitution of India shows that the property and income of a State is exempted from Union taxation. However, the Union is not debarred from imposing or authorising or imposition of any tax by law to be framed by the Parliament in respect of a trade or business of any kind carried on by or on behalf of the State or any property used for the purpose - In the case in hand, providing security cannot be said to be a business carried on by the State, as it is otherwise the duty of the State. Security service has not been provided to any private individual. Apparently for the reason of requirement of security more than the normal being provided by the State, certain amounts have been recovered from the public sector banks and All India Radio, on which Service Tax is sought to be charged by the department, which cannot be permitted, because of constitutional bar.
The impugned orders directing recovery of Service Tax from the amount received by the State on account of service provided to the banks, etc. are set aside - Petition allowed - decided in favor of petitioner.
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2018 (9) TMI 1988 - CESTAT KOLKATA
Demand of differential amount of service tax alongwith interest and penalty - allegation of discrepancies in figures as per financial records with that of figures mentioned in ST-3 Returns for the period from April, 2007 to March, 2011 - HELD THAT:- It is noticed from the reconciliation statement submitted that some amount of money received towards booking, was subsequently refunded to the parties on account of cancellation of booking. In many cases, service tax has not been collected separately and hence, the appellants have prayed for allowing cum tax benefit as envisaged in Section 67 (2).
In the case of Advantage Media Consultant [2008 (3) TMI 59 - CESTAT KOLKATA], the Tribunal has held that the total amount collected for the provision of services, should be treated as inclusive of service tax to be paid. When no tax is included separately, the gross amount has to be adopted to qualify the tax liability treating it as value of the taxable service plus service tax payable.
Penalty - HELD THAT:- There are no ingredient of suppression, mis-statement etc. with intent to evade payment of service tax. The facts in respect of activities undertaken by the appellants are same as mentioned in the show-cause notice, which was issued after a gap of nearly four years and the Department has not rebutted the calculation submitted by the appellant. Accordingly, penalty imposed under Section 78 is set aside.
The discrepancies as mentioned in the reconciliation statement filed by the appellant as reproduced above being factually apparent from the record, needs to be rectified and demand should be taken as cum-tax and should be re-quantified accordingly. For this limited purpose, the matter is remanded to the adjudicating authority - Appeal allowed by way of remand.
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2018 (9) TMI 1983 - GUJARAT HIGH COURT
CENVAT Credit - establishments of the Petition No.1 or not - consulting engineering services rendered outside India by the Petition No.1 to any other subsidiary of Linde AG or holding company - Export of Services - proportionate reversal of Credit under Rule 6A of the STR - it is submitted that action of the respondent in issuing show cause notice is without jurisdiction and contrary to the provisions of Rule 6A of Sales Tax Rules read with Section 65B (44) of the Act - HELD THAT:- Issue NOTICE returnable on 27th September 2018.
Meanwhile, there shall be ad-interim relief in terms of paragraph 9 (b) of the petition.
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2018 (9) TMI 1922 - CESTAT MUMBAI
CENVAT Credit - service tax amount indicated in the invoices issued by the sub-contractor - sub-rule (7) of Rule 4 of Cenvat Credit Rule, 2004 - CBEC Circular No. 122/3/2010-ST dated 30.04.2010 - denial on the ground that under the provisions of sub-rule (7) of Rule 4 of Cenvat Credit Rule, 2004, the assessee was only entitled to avail Cenvat Credit of the amount paid to the service provider i.e. the sub-contractor - HELD THAT:- An identical matter came up before the Tribunal for consideration in the case of Hindustan Zinc Limited [2018 (7) TMI 522 - CESTAT NEW DELHI]. Upon-examination of the statutory provisions read with the circular dated 30.04.2010 issued by the CBEC, the Tribunal has held that in case a part amount of value of service is retained from the bills of the service provider, the Cenvat Credit cannot be denied for the full amount of service tax claimed in the invoices.
There are no merits in the impugned order passed by the Learned Commissioner (Appeals) - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1918 - CESTAT ALLAHABAD
Classification of service - security service or Supply of Cash Van Service - service of providing cash van to the bank for carrying cash from one place to another - Demand of Differential Duty alongwith interest and penalty - HELD THAT:- The issue is no more res-integra and decided in the case of SRI ARMAN KHAN, FEDERAL UNITED 7 PROTECTION GROUP, FORCE 7 SECURITIES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, LUCKNOW [ 2018 (9) TMI 385 - CESTAT ALLAHABAD ], where it was held that providing of cash van service with security guard is covered under “cash van service‟ and cannot be termed as “security services‟ as the dominant service is transportation of cash from one place to another through these cash vans. Therefore, the appellants are not liable to pay differential Service Tax under the category of “security service‟.
Demand do not sustain - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1917 - CESTAT MUMBAI
Maintainability of appeal - time limitation - HELD THAT:- The appeal has been filed within the time prescribed in law for seeking of appellate remedy against the order of the first appellate authority.
The appeal is admitted and Registry is directed to list the appeal for disposal in its turn.
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2018 (9) TMI 1893 - BOMBAY HIGH COURT
Maintainability of appeal - Classification of services - Business auxiliary services or not - amounts received on purchase and sale of cargo space on ships - HELD THAT:- The issue is of valuation and the remedy in terms of Section 83 of the Finance Act, 1994 r/w Section 35G(1) and 35L(1)(b) of the Act would not be maintainable before this Court - The appeal in respect of the same would be to the Hon'ble Supreme Court as it is an issue dealing with the valuation of services.
Appeal dismissed being not maintainable.
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2018 (9) TMI 1876 - CESTAT MUMBAI
Refund of service tax paid - service tax was paid for the services which were exempt - time limitation - refund rejected on the sole ground that the application is filed beyond the stipulated time frame and accordingly, is barred by limitation of time as per Section 11B of the Act - HELD THAT:- Learned Commissioner (Appeals) in the impugned order, though has upheld rejection of refund application, but has relied upon the provisions of Section 109 of the Finance Act, 2013, which was not the stand taken by the original authority in the adjudication order. Thus, I am of the view that rejection of refund application under Section 109 of the Act, 2013 is not legal and proper.
Time limitation - HELD THAT:- The application for refund was filed by the appellant on 13.06.2014, which was within the limitation period of one year from the date of payment of service tax amount. Thus, rejection of refund application on the ground of limitation is not sustainable.
Further, the Finance Act, 2013 dealing with the VCES Scheme does not impose any restriction for non-filing of refund application under Section 11B of the Act. Since, the Central Excise statute in Section 11B permits the assessee to file the refund application, claiming refund of duty/service tax, the provisions of Section 109 of the Act, 2013 cannot be relied upon to deny the refund benefit to the appellant.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1875 - SC ORDER
Grant of leave - Life Insurance Service - demand of service tax of ₹ 412,78,78,686 for the period between October, 2010 and March, 2015 - Section 105 of FA - HELD THAT:- Leave granted.
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2018 (9) TMI 1848 - MADRAS HIGH COURT
Waiver of penalty - Manpower Recruitment & Supply Agency Services or manufacture - respondent not registered with the Department for rendering the service - non-payment of service tax - whether the authorities below could take recourse to Section 80 of the Finance Act 1994 in order to waive the penalty levied under Section 76,77,78 and 80 of the Finance Act 1994?
HELD THAT:- The supply of manpower cannot be said to be process which directly related to actual production. There is no inter connection between supply of labour and the manufacture by the service recepient. Manufacture is defined under Section 2(f) of the Central Excise Act, 1944 - A process is a manufacturing process that it brings out a complete transformation for the whole components so as to produce a commercial diffferent article of commodity. Though it is well settled that the process itself may consist of several processes which may or may not bring about any agency at intermediate stage, but the activities or the operation may be so integrally connected with the final result is the production of a commercial diffferent article.
A perusal of the records would show the respondent No. 2 was obliged to submit the details of the wages paid by them to their employees. They were also required to provide the details of the Provident Fund, ESI contributions, etc. This was for the payment by the service recipient. The respondent No. 2 was therefore only to provide manpower for which they were to be paid by the service recepient. It may be that the requirement was for a particular type of personnel and that were to perform particular kind of work. When the definition is clear and unambiguous, ignorance of law cannot be an excuse and the plea of genuine mistake in interpretation cannot hold good. The Tribunal with respect, has erred in coming to the conclusion that “it was not mere supply of labour was activity of the respondent but was also obliged to carryout other activity of unloading material to store/production area and packing the same” - A manpower recruitment or supply agency is a commercial concern engaged in providing any service directly or indirectly in any manner for recruitment or supply of manpower temporarily or otherwise to a client. What the manpower supplied would do, will not alter the nature of services provided by a service provider and hence the services provided by the respondent No. 2 cannot come within the definition of manufacture.
To invoke Section 80, the service provider must show reasonable cause for failure to pay Service Tax. Unless and until the reasonable cause is shown, penalty levied under Section 76 and 78 cannnot be exempted - The respondent No. 2 has not shown any reasonable cause as to why Section 80 of the Finance Act, 1999 should not be invoked. As discussed, the excuse offered is only a complete afterthought and as stated earlier, a lame excuse. The appellate authority and Tribunal have completely errred in removing the imposition of penalty.
Supply of manpower cannot be mean to be a operation or activity in relation to manufacture. The mistake of interpretation cannot be accepted and cannot be termed as “Reasonable Cause” for not paying Service Tax.
The order of the Tribunal and the appellate authority are set aside and the order of the assessing authority is restored - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1732 - BOMBAY HIGH COURT
Maintainability of Appeal - Section 35G of the Central Excise Act, 1944 - Imposition of penalty on accepting valuation is the issue - Held that:- The Appeal as filed does not relate to valuation of excisable goods for the purpose of assessment. The valuation issue is concluded issue and accepted by the Appellant. The Appeal as being pressed only restricts itself to imposition of penalty on accepting the valuation as found by the Tribunal in the impugned order.
The Appeal is maintainable under Section 35G of the Act before this Court - Appeal admitted to decide the issue of penalty imposed u/s 11AC of CEA.
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2018 (9) TMI 1731 - BOMBAY HIGH COURT
Imposition of Penalty - while Service tax demand upheld, the penalty was set aside following the decision of its Coordinate Bench in South City Motors Ltd. [2011 (11) TMI 408 - CESTAT, NEW DELHI] - whether penalty should be levied or not? - Held that:- There was reasonable cause for non payment of service tax making Section 80 of the Act applicable. It is not as though the confirmation of demand would ipso facto lead to penalty. In fact, Section 80 of the Act provides for non imposition of penalty, if there is a reasonable cause. This is available in ample measure in the present facts. Thus, no fault can be found with the impugned order of the Tribunal.
The order dated 5th April 2016 of the Tribunal not imposing penalty is one on facts, no substantial question of law arises - Appeal dismissed.
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2018 (9) TMI 1730 - CESTAT BANGALORE
Business Auxiliary Service - business of booking space and collection of freight for M/s. British Airways World Cargo - visa services - Circular No.137/06/2011-ST dated 20.4.2001 issued by CBEC vide File No.332/2011/2010-TRU.
Held that:- Appellant submitted that the services are in the nature of export and therefore, in terms of Rule 3(3) of Export of Service Rules, 2005, the services are exempt. However, on being questioned, the learned counsel could not specifically reply as to whether such services are rendered only with reference to the export cargo or otherwise. He submitted that necessary details are contained in the agreements and he was not in a position to submit the agreements readily - thus, for determination of the liability of service tax of the appellant vis-à-vis the contracts and the actual nature of the work undertaken by the appellants so as to evaluate whether they can be termed as export of services.
Visa Services - Circular No.137/06/2011-ST dated 20.4.2001 issued by CBEC vide File No.332/2011/2010-TRU - Held that:- The services rendered by the appellants insofar as visa services are concerned are squarely covered by the clarification issued by CBEC vide the Circular - the demand as far as visa services rendered by the appellants are concerned does not sustain and is liable to be set aside.
Issuance of show-cause notice seeking to increase the quantum of penalty under Section 76 from ₹ 100/- per day to ₹ 200/- per day - Held that:- The Department was well within its rights to file an appeal before the appropriate form if it was felt that there was an error in the order - the subsequent order No.25/2008 being issued without authority of law is liable to be set aside.
Appeal disposed off.
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2018 (9) TMI 1729 - CESTAT CHENNAI
Man Power Recruitment Agency and Supply Service - appellant have deputed the employees to their sister concern or units and collected deputation charges from the latter - Held that:- The scope of service tax liability in respect of the activity of staff to subsidiary / group companies is no longer res integra - The Hon’ble High Court in the case of CST Vs Arvind Mills Ltd. [2014 (4) TMI 132 - GUJARAT HIGH COURT], has held that subsidiary companies cannot be said to be client of holding company and the deputation of employees was only for and in the interest of the company; there is no relation of agency and client.
Section 73 (3) of the Finance Act, 1994 - Held that:- In the present case, a SCN has very much been issued and the adjudication thereof has culminated in confirmation of the demand. At such a later stage, if the LAA finds that demand is time-barred, he should only set aside the demand on that ground but cannot advise assessee concerned to discharge the disputed amount through Section 73 (3) ibid - assessee cannot be said to be discharge the disputed amount through Section 73 (3) ibid.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1728 - CESTAT BANGALORE
Refund of Service Tax paid wrongly - appellant claims that service tax paid by them under mistake under the category of health club and fitness center on the ground that they are not liable to pay service tax as the service has been rendered to its own members - Held that:- It is an admitted fact by the appellant that they have collected service tax from its own members and paid the same to the Government under the category of health club and fitness center.
Hon’ble High Court of Karnataka in the case of CENTURY CLUB VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE [2009 (6) TMI 414 - KARNATAKA HIGH COURT], where it was held that The moment an establishment is running “Health club and fitness centre” under Section 65(52) of the Finance Act, 1994 service tax is applicable as there is no explanation of the word “club” under Section 65(52) and its inclusive definition including the appellant club and other similarly placed clubs and therefore the club is registered under the Service Tax Department charging and collecting from its members and therefore refund claim is not tenable - the argument of the learned counsel for the appellant that the decision of the Hon’ble High court is per incuriam is not correct because the High Court has given reasons for denial of the refund.
Appeal dismissed - decided against appellant.
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2018 (9) TMI 1727 - CESTAT BANGALORE
Manpower Recruitment and supply Agency services - the appellant on being pointed out paid the service tax after collecting the same from the service recipients - no intent to evade - Held that:- The appellant is a proprietary concern and he is providing the taxable service under the category of Manpower Recruitment and Supply Agency service but he was under a bona fide belief that he was not liable to pay service tax and that is why he did not take registration under the service tax and did not collect the service tax from his clients and also did not pay the service tax to the Government.
The appellant is an illiterate person and does not have the knowledge about the service tax provisions and that his activity is liable to service tax as the said service was newly brought under the Service Tax regime - Tribunal in various cases has taken a view that after there is an honest belief founded on reasonable grounds that the assessee is not liable to pay service tax but pay the service tax if the Department intervened and demanded service tax, then in those situations, the Tribunal should take liberal view and give him the benefit under Section 80 of the Finance Act, 1994 and should drop the penalties under Sections 76, 77 & 78.
The Tribunal in the case of Infinity Credit [2009 (3) TMI 22 - CESTAT, NEW DELHI], in identical circumstances, held that there are sufficient causes for the appellant in entertaining doubt that they were not liable to pay the service tax especially when the service tax was recently introduced and the Tribunal by invoking the provisions of Section 80 of the Finance Act, has set aside the various penalties imposed on the appellant.
Penalties u/s 76, 77 and 78 of FA - As far as interest liability is concerned, since there is a delay in payment service tax by the assessee, consequently the assessee is liable to pay interest under Section 75 of the Finance Act and the computation of interest would be done by the adjudicating authority which the assessee will pay.
Appeal disposed off.
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2018 (9) TMI 1726 - CESTAT BANGALORE
Penalty - non-payment of service tax on investigation service - tax alongwith interest paid on being pointed out - Section 73(3) of the Finance Act, 1994 - Held that:- As soon as the Department pointed out that the appellants are liable to pay service tax on Investigation Service, the appellant paid the service on investigation along with interest much before the issuance of the show-cause notice and therefore the case of the appellant is covered under Section 73(3) of the Finance Act, 1994 in respect demand on investigation service is concerned - Penalty set aside.
Valuation - Security Agency Service - inclusion of reimbursable expenses Section 67 of the Finance Act, 1994 - Held that:- Section 67 was amended by Finance Act, 2015 to include the reimbursement of expenses for charging the service tax but the period involved in the present case is prior to the amendment and therefore during the relevant period, the appellant was not liable to pay service tax on reimbursement of expenses - The demand of service tax on reimbursement of expenses has been held to be ultra vires by the Delhi High Court in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA] - demand set aside.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1725 - CESTAT BANGALORE
CENVAT Credit - extended period of limitation - Rule 9(9) of CCR, 2004 - SCN was issue for irregular availment of CENVAT credit by invoking the extended period and proposing to levy penalties under Sections 76, 77 & 78.
Held that:- The Commissioner in the impugned order has found that the bank acted bona fidely as it was first year of Service Tax implementation and has taken a lenient view by not imposing penalties by invoking the provisions of Section 80 - further, once the Commissioner has found the conduct of the appellant bona fide and there was a reasonable cause for the act of the appellant, then extended period of limitation cannot be invoked.
In the present case, the period involved is from 10/09/2004 to 31/03/2005 whereas show-cause notice was issued on 12/07/2006 which is beyond the normal period of one year as prescribed under law - it is also found that the appellant is a Government of India enterprise and therefore the allegation of suppression cannot be made.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1724 - ITAT BANGALORE
Works contract - construction of complex services - period from 16/06/2005 to 30/09/2006 - Held that:- The present case is squarely covered by the decisions of the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] wherein the Hon’ble Apex Court has held that works contracts are not liable to service tax prior to 01/06/2007 and in the present case, the period involved is 16/06/2005 to 30/09/2006.
The assessee’s case is also covered by various circulars issued by the Board i.e., Circular No.B11/3/98 dt. 07/101998, DGSTS letter F.No.v/dGST/Misc.-7/98 dt. 11/02/1999 and Trade Notice No.7/98-St dt. 13/10/1998 of CCE, Mumbai wherein it was clarified that the service rendered by the subcontractor to the main contractor is not liable to service tax as the main contractor was paying the service tax on the entire work done including that of the respondent.
Appeal dismissed - decided against Revenue.
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