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Service Tax - Case Laws
Showing 1 to 20 of 2257 Records
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2019 (12) TMI 1660 - CESTAT CHENNAI
Levy of service tax - Auctioneers’ Service - conducting auction of goods and property on consideration, for which trading charges, handling and incidental expenses and appraising charges were collected - Business Support Service - activity relating to pledging of jewellery - HELD THAT:- The Show Cause Notice carries the explanation through statement of one of the office bearers of the appellant-society wherein he has inter alia stated that their objective was “facilitating the marketing of agricultural produce to its members at a remunerative price”, “arranging for and undertaking of purchase, storing, processing and marketing of the agricultural and other produce or products of its members or of the society to the best advantage”; that normally members would bring their produces to the society for auction on the scheduled date and on receipt of produces, they are given a receipt with identification lot number; that the same are stacked/stored in the auction yard, etc.
The very same activities were carried on by the assessee in the case of M/s. Attur Agricultural Producers [2019 (8) TMI 262 - CESTAT CHENNAI] relied on by the Learned Advocate for the assessee wherein, after considering various arguments, this Bench has held that the demands on the above counts were not sustainable - the above ruling would apply squarely to the present case as well.
The impugned orders set aside - appeal allowed.
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2019 (12) TMI 1646 - DELHI HIGH COURT
Maintainability of petition - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- The respondents have issued a circular dated 29.10.2019 on the subject of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. A copy of the same has been tendered in Court and taken on record. Learned counsels for both the parties state that the petitioner is covered by the said circular as well.
This petition has become infructuous and is disposed of as such.
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2019 (12) TMI 1592 - CESTAT MUMBAI
CENVAT Credit - input services - Goods Transport Agency Service - place of removal - period prior to 01/04/2008 - invocation of extended period of limitation - HELD THAT:- The facts of the case are not in dispute. The appellant has received the service prior to 01/04/2008 and availed the credit in November 2009. As, at the time of receiving the service, there was no bar on availment of CENVAT credit on the service in question. In the circumstances, CENVAT credit cannot be denied to the appellant. It is a fact on record that during the period when the service was availed there was no bar for entitlement of CENVAT credit on ‘outward transportation service’.
The appellant has rightly availed CENVAT credit on the service in question in November 2009 - Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1566 - MADRAS HIGH COURT
Maintainability of petition - availability of alternative remedy of appeal - Classification of services - Demand of service tax on Notice pay - facilitation of termination of employment or not - HELD THAT:- Petition allowed by placing reliance in the case of GE T & D INDIA LIMITED (FORMERLY ALSTOM T & D INDIA LIMITED) VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE [2020 (1) TMI 1096 - MADRAS HIGH COURT] where it was held that Though normally, a contract of employment qua an employer and employee has to be read as a whole, there are situations within a contract that constitute rendition of service such as breach of a stipulation of noncompete. Notice pay, in lieu of sudden termination however, does not give rise to the rendition of service either by the employer or the employee.
Petition closed.
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2019 (12) TMI 1486 - CESTAT KOLKATA
Levy of service tax - Management or Business Consultant Service - Business Auxiliary Service - project was in relation to provision of Smart Card to the beneficiaries of National Rural Employment Guarantee Scheme, (NREGS in short) of Patna District - Board’s Circular No. 96/7/2007-S.T., dated 23.08.2007 - HELD THAT:- From various clauses and terms and conditions of the agreement dated 10.09.2008, it transpires that the Government of Bihar, through its agency BSEDC, allotted the entire work of generation of digital job cards (E-shakti cards) for the workers of MNREGS to the appellant on turn-key basis. For the aforesaid purpose, the appellant had to set-up the entire infrastructure by supplying all kinds of plant & machinery/equipments/software/hardware. As per the Agreement, the appellant had to collect, process and store data of the beneficiaries of MNREGS like photographs, biometric fingers prints, along with names, address etc. in the database server installed for the purpose. They had to integrate electronic payment mechanism of various banks and to make proper arrangements for payments of wages to the beneficiaries.
Board’s Circular No. 96/7/2007-S.T., dated 23.08.2007 issued by CBEC has clarified that the activities assigned to and performed by the sovereign/public authorities under the provisions of any law are undertaken as mandatory and statutory functions and cannot be treated as services provided for a consideration.
The Appellant was acting as an implementing agency and implementing the government welfare scheme sponsored by the Government of Bihar, accordingly the entire demand against the Appellant is contrary to the Board’s Circular No.125/7/2010-ST dated 0.07.2010 which clarifies that levy and collection of service tax on State Government agencies/departments implementing the CSS under a central grant is not legally tenable and therefore, in such cases service tax should not be demanded. Since the Appellant has executed the project to facilitate the Government in discharging of its sovereign duty, the Appellant cannot be made liable for service tax.
The appellant’s case is squarely covered by the Judgment of COMMISSIONER OF CUS. & C. EX., HYDERABAD-II VERSUS CMC LIMITED [2007 (7) TMI 17 - CESTAT, BANGALORE], M/S INSTRUMENTATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & S. TAX, LUCKNOW [2016 (7) TMI 502 - CESTAT ALLAHABAD] and SUKHMANI SOCIETY FOR CITIZEN SERVICES VERSUS C.C.E & S.T., CHANDIGARH [2016 (9) TMI 588 - CESTAT CHANDIGARH]. The activity of the appellant is a sovereign activity and therefore out of the ambit of the Service Tax and no service tax can be demanded on such services.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1480 - GUJARAT HIGH COURT
Violation of principles of Natural Justice - HELD THAT:- It prima facie appears that the impugned order has been passed in breach of the principles of natural justice. Under the circumstances, issue Notice, returnable on 22nd January 2020. By way of adinterim relief, the operation of the impugned order in original dated 11th November 2019 (Annexure 'A' to the petition) is hereby stayed.
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2019 (12) TMI 1474 - SC ORDER
Cenvat Credit - towers, shelter and accessories used for providing telecom services - whether immovable property or not - towers, shelter to be treated as ‘accessories’ either as capital goods or input goods or not - installation after receipt of such towers and shelters at their premises (i.e. tower sites) - It was held by High Court that credit is to be allowed on the items.
HELD THAT:- Issue notice.
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2019 (12) TMI 1433 - SC ORDER
Scope of service - shot hole drilling - seismic job - sub contract work - whether the activities undertaken covered under taxable service of survey and exploration of minerals? - Held that: - the services rendered are liable to service tax under the scope of the above-mentioned tax entry - HELD THAT:- List on a non-miscellaneous day in the last week of February, 2020.
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2019 (12) TMI 1372 - CESTAT CHANDIGARH
Banking and Other Financial Services - late payment charges - delayed deposit of instalment of higher-purchase charges by the customers - C.B.E. & C. Circular dated 3-8-2011 - HELD THAT:- The amount received by the appellant on account of delayed payment charges by the customers is not to be treated as consideration for provision of service and therefore, does not form part of the value of taxable service as clarified by C.B.E. & C. Circular dated 3-8-2011 - As the C.B.E. & C. has clarified that the delayed payment charges are not includible in the taxable value of service, therefore, the appellant is not liable to pay service tax on these incidental charges received on account of delayed payment of instalment by the customers.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1363 - SC ORDER
Classification of services - taxable service “Real Estate Agent” and “Site Formation and Clearance, Excavation and Earth Moving and Demolition” provided by the Appellant during the period 2005-2006 to 2009-2010 - Circular dated 27 July 2005 - It was held by CESTAT that activity carried out by the Appellant would, therefore, not fall under ‘site formation’.
HELD THAT:- There are no reason to interfere with the order of the CESTAT - Appeal dismissed.
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2019 (12) TMI 1172 - CESTAT AHMEDABAD
Demand of service tax - Rent a Cab Service - Business Support Service - evasion of service tax - suppression of facts - extended period of limitation.
Rent-a-cab operator service - HELD THAT:- The demand sustainable on merits - As regard the limitation, the question answered in negation and in favour of the assessee.
Business Support services - HELD THAT:- Under clause (104C) the definition starts with the words “Services Provided in relation to business or commerce” and thereafter in the inclusion clause same names of the services are provided. Aas per the clear definition, the services primarily should have a support service in relation to business /commerce - In the present case the appellant have provided the support service of providing driver, cleaner and maintenance of buses which are owned by the company M/s. Welspun. There is no doubt or dispute that M/s welspun is an exclusive commercial organization and carrying out their manufacturing and sales activity in the factory where the appellant have provided the services, therefore, the services provided by the appellant is undoubtedly in relation to business or commerce - it is not necessary that only those support service which are identical or similar to the services under the inclusion clause will fall under business support service. The services mentioned in the definition as inclusive are some of the services apart from all the services which are provided in relation to business or commerce.
The services provided by the appellant to M/s. Welspun who have used this service undisputedly in relation to their business or commerce and will fall under support services of business or commerce - the demand under business support service was rightly invoked by the revenue.
Time limitation - HELD THAT:- Since there was no ambiguity as regard taxability of appellant service under the head of Business Support Service, non-payment of service tax without informing to the department is clearly under suppression of fact on the part of the appellant, therefore, the demand for extended period is rightly invoked by the Adjudicating Authority and the First Appellate Authority.
Penalty u/s 76 and 78 - HELD THAT:- Simultaneous penalty under section 76 and 78 cannot be imposed as held by Hon’ble Gujarat High Court in the case of M/S RAVAL TRADING COMPANY VERSUS COMMISSIONER OF SERVICE TAX [2016 (2) TMI 172 - GUJARAT HIGH COURT], therefore, the penalty imposed under section 76 is set aside - Other penalties and interests to the extent demand was sustained is imposable.
Appeal allowed in part.
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2019 (12) TMI 1171 - CESTAT MUMBAI
Recovery of CENVAT credit - input services - allegation that input services were not utilized by the assessee but utilised for the broadcasting of channels by the overseas entity - penalties u/s 78A of Finance Act, 1994 - exported services or not - exclusion from the definition of ‘input service’ in rule 2(l) of CENVAT Credit Rules 2004 or not - insistence on the part of Revenue that the responsibility for discharge of tax liability is distinct from provision of service which alone entitles availment of CENVAT credit.
HELD THAT:- It is not disputed that the appellant-assessee has discharged tax liability but it has been held that such compliance is as a mere agent who does not consume the ‘input service’; implicit in this hypothesis is that even the procurement of service is as an agent even though Learned Authorized Representative is unable to draw sustenance for deeming such agency in the taxing statute or in the CENVAT Credit Rules, 2004.
It is not the entitlement of the ‘broadcaster’ within the scheme of CENVAT credit that is objected to but the claim of the appellant-assessee to that entitlement as ‘surrogate’ of provider of service - There is no allegation that the disputed services are not ‘input services’ for a ‘broadcaster’ and, hence, the exclusions or the schedule, for which that definition is intended, are not relevant for deciding on eligibility in the dispute before us. The perception conflict between surrogacy and agency seems to be the genesis of the controversy; while the appellant-assessee claims to be the surrogate, Revenue is prepared only to concede status of agency for discharge of liability and, that too, as a legal fiction which excludes categorization as ‘broadcaster.’
The levy on manufacture is crystallised on the product without having to take recourse to manufacturer making abundantly clear, by implication, that the manufacturer pays the duty and takes eligible credit. Likewise, in section 66 of Finance Act, 1994, there is no reference to any person but only to the taxable events described in section 65(105), and in the successor section 65B, even less so. The complexity of definition of taxable activity, necessitating human presence, is now sought to be superimposed on the CENVAT credit scheme which recognises only the taxpayer within its ambit. The deployment of expressions in CENVAT Credit Rules, 2004 warrants recourse to Finance Act, 1994 only for interpreting expressions that are not defined therein. As the said Rules do not allude to ‘taxable service’ except with the qualification ‘provider of’, and is defined in rule 2(q) and rule 2(r) as a composite expression, which is not untrammeled, even the parent statute may be unable to afford an interpretation. By inclusive qualification, rule 2(r) of CENVAT Credit Rules, 2004 brings ‘person liable to pay tax’ within its ambit - The levies devolve on the person liable to tax as laid out in the Service Tax Rules, 1994 and, in view of rule 9 of CENVAT Credit Rules, 2004, credit can be taken only by the entity burdened with the incidence of tax. That is the sole criteria of eligibility to take credit and not the process by which broadcast signals are received in India.
The relationship between the overseas entity and the appellant-assessee is open and declared and the tax law sought to be invoked against the latter is not premised on the existence of a relationship between the two. The laudable morality that guided the widening of investigative jurisdiction cannot be read out of context to impute an allegation that is not acknowledged in the law pertaining to levy of service tax.
In the light of findings that the appellant-assessee is not only de facto but also de jure provider of ‘output service’ as well as consumer of the impugned ‘input service’, the recovery ordered in the impugned order as well as the penalties on the appellant-assessee and the individual appellants is set aside - appeal allowed - decided in favor of assessee.
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2019 (12) TMI 1170 - CESTAT HYDERABAD
Classification of services - works contract services or not - agreement/ sale deed for sale of undivided portion of the land together with the semi finished portion of the flat - agreement for construction with their customers after sale - HELD THAT:- There is no dispute that the show cause notice demanded service tax only on the amounts received after sale has been completed. Therefore, the amounts received towards sale deed were supposed not to have been included in the demand. However, prima facie, looking at the annexure to the SCN and the table presented before us by the learned CA as well as the reply to RTI query received by him, it does appear that sale deed value has been included while computing the demand and confirming it.
Since the dispute is only regarding the computation of the demand and not on any specific point of law, it is a fit case to be remanded to the original authority to recalculate the demand after excluding the sale deed value - appeal allowed by way of remand.
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2019 (12) TMI 1169 - CESTAT ALLAHABAD
Sub-contract - liability of sub-contractor to pay service tax - main contractor sub contracted part of the work to the appellant, who rendered the services and did not pay any service tax by writing on the invoices that service tax is exempted as per N/N. 25/2012 –ST dated 20.06.2012 - HELD THAT:- The services provided by the assessee were part of the main contract awarded by the State Government to the principles contractor. Further Commissioner (Appeals) has relied upon the instructions issued by the board itself laying down that in such a scenario no tax liability would fall upon the sub-contractor.
There are no infirmity in the order of Commissioner (Appeals) - appeal dismissed - decided against Revenue.
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2019 (12) TMI 1130 - CHHATTISGARH HIGH COURT
Adjustment to the excess payment of service tax with the short paid tax - Rule 6(4A) of the Service Tax Rules, 1994 - HELD THAT:- without specifically mentioning or referring to the relevant conditions for granting the benefit of adjustment in respect of the excess payment, the Tribunal simply observed that failure to comply with certain procedural conditions cannot be a ground to deny substantial benefit and that in principle, there can be no objection to the adjustment of service tax short paid and excess paid. But here again, it is to be noted that the said finding and reasoning were given by the Tribunal with reference to “some chart” prepared by the Appellant there, who is Respondent herein, as to the remittances revealing the excess payment. It is also evident from paragraph-3 of the order that, such a ‘chart’ was not forming part of the proceedings before the adjudicating authority and that the said ‘chart’ prepared on behalf of the assessee was produced by the learned counsel for the Respondent before the Tribunal with reference to the period of dispute, the payment affected to the tune of ₹ 1 crore 77 lacs and such other aspects.
Since the remedy provided against the order of the Tribunal is only under limited circumstances as envisaged under Section 35G of the Central Excise Act, 1944, it was quite necessary for the Tribunal to have considered and discussed the relevant provisions of law, to sustain the order, which unfortunately is lacking in the instant case. More so, despite completion of service of notice to the Respondent, who was Appellant before the Tribunal has not chosen to appear before this Court, to put forth their version with regard to the sequence of events, the facts and figures and the relevant provisions of law.
The substantial question of law suggested by the learned counsel for the Appellant-Revenue and raised, as taken note of by this Court in is answered in favour of the Revenue - Appeal allowed - decided in favor of Revenue.
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2019 (12) TMI 1129 - GAUHATI HIGH COURT
Service of garnishee notice u/s 87 - Section 73 of the Finance Act, 1994 - case of assessee is that without issuing such show-cause notice under Section 73, impugned garnishee notices could not have been issued under Section 87 (b) of the Finance Act, 1994 - Non-payment of service tax - permission to allow payment of service tax dues in installments - HELD THAT:- A reading of Section 73, would go to show that in the circumstances enumerated in Sub-Section (1) thereof the competent authority may within 18 months (and since 01.04.2017, 30 months), serve a show cause notice upon the assessee as to why he should not pay the amount specified in the notice. However, in a case of fraud the period for issuance of such notice would stand extended to 5 years. After service of show cause notice, if any representation is made by the assessee the same shall be considered and thereafter, the service tax dues may be determined. Further, in a case of self-assessment, the quantum of service tax dues along with interest shall be recovered under Section 87 - A conjoint reading of Sections 73 and 87 of the Finance Act, 1994 would go to show that in case of non-payment of service tax dues covered by the situations enumerated, the competent authority is empowered to issue show cause notice within the time frame provided for payment of service tax dues specified in the notice, the period of notice would stand extended in a case of fraud.
The petitioner has not disputed the quantum of service tax dues quantified in the garnishee notices. Petitioner has only highlighted the need and necessity to allow it to pay the dues in installments. Therefore, in a case where the assessee admits to the service tax dues as specified in the show cause notice or in the garnishee notice, no adjudication would be necessary.
Demand of Interest - HELD THAT:- Section 75 of the Finance Act, 1994, deals with levy of interest on delayed payment of service tax. It provides for payment of simple interest at such rate not below 10 % and not exceeding 36% per annum for the period of delay. It is thus clear that the interest that may be imposed in case of delayed payment of service tax is not a fixed percentage but ranges between 10% to 36% indicating an element of flexibility - In the instant case, what is seen is that respondent No. 2 has imposed the maximum percentage of interest i.e., 36 % without any exercise of discretion which indicates non-application of mind. Thus, the exercise is arbitrary.
Payment of service tax dues in installments - circular dated 28.02.2015 - HELD THAT:- As per the said circular, Commissioners have been given the discretion for granting sanction to pay arrears in installments upto a maximum of 24 monthly installments and Chief Commissioners more than 24 and upto a maximum of 36 monthly installments. It has been emphasized that approval to pay in installments and the number of installments should be fixed in such a way so that an appropriate balance is maintained between recovery of arrears and survival of business. - Allowed to paid in 48 equated monthly installments
Petition disposed off.
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2019 (12) TMI 1127 - CESTAT MUMBAI
CENVAT credit - exempt service or not - compensation for performance of a separate service - endowment policies - ULIP scheme policy - applicability of rule 6 of CENVAT Credit Rules, 2004 - exclusions from assessment for the different periods in the two categories of policies - while Revenue asserts these to be covered by the inclusive component of ‘exempted services’ and, thereby, rendering rule 6 of CENVAT Credit Rules, 2004 to be applicable, it is the primary submission of the appellant that such vivisection of a composite consideration for a particular service is not the intent of the said Rules.
HELD THAT:- It would not be out of place to peruse the inclusive component of the definition of ‘exempted service’ which pertains to services that are not leviable to tax under section 66 of Finance Act, 1994. The most proximate of services that are subject to the levy are the entries in section 65(105) of Finance Act, 1994 as stated therein and it is only those which are exempted that can be held to be covered by the said definition which, having been described as the principal component, does not require restatement. It is obvious the legislature had not intended superfluity in incorporating the services that are not leviable to tax in the definition. There is no definition of ‘service’ in Finance Act, 1994 and, therefore, forecloses an ascription that is non-existent. Consideration, though essential to determination of value of taxable service, is not the sole indicator of existence of a service.
The presumption against superfluity in interpretation of statutes binds us to search for, and determine, the nature of inclusion. As we are dealing with the schema of mechanism for avoiding the cascading effect of taxation upon the final customer who bears the burden of indirect tax levy, it can be posted that there is a recipient of service with whom the buck stops. Such stoppage could be owing to lack of further commercial engagement of the service or because of the non-existence of such service within the jurisdiction to tax. Tax laws have nothing to do with the last consumer in the market chain. It would, therefore, leave us with no option but to determine that legislative intent of ‘services that are not leviable to tax under section 66 of Finance Act, 1994’ to be those to which the Union cannot extend its taxing arm.
Not unnaturally, such service, unacknowledgeable in the tax jurisdiction, fails the test of utilization in rendering of further service. These, therefore, cannot be ‘input services’ and the inclusive portion of ‘exempted services’ must be construed as referring to such and not to services that, though not yet, may still be subject to levy. The proposition of Revenue that subsequent taxability imprints upon it the description of ‘non-leviable under section 66 of Finance Act, 1994 fails and, with it, the support for sustaining the demand in the impugned order. The detriments also fail.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1124 - CESTAT MUMBAI
Refund of service tax - rejection on the ground that the appellants have not obtained registration - Rule 5 CENVAT Credit Rules, 2004, read with N/N. 27/2002 - HELD THAT:- The issue of eligibility of Cenvat refund has been decided in favour of the Appellant by this Tribunal, this bench and other benches. Though the learned AR has cited a few cases decided by the co-ordinate bench at Delhi we find that Karnataka High Court in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [2011 (9) TMI 450 - KARNATAKA HIGH COURT] has decided the issue in favour of the Appellant no contra judgement of any other high court has been placed before me. Therefore the issue is settled in favour of the appellants.
Refund claim - input services - catering services - general insurance services - rent-a-cab services - HELD THAT:- The services are very much required for continuation of the appellants as a BPO and nothing has been brought on record to say that this have been availed for any other purposes than their business activities - the said services are also eligible for Cenvat credit and consequently for the refund.
Appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1092 - CESTAT NEW DELHI
Refund of service tax wrongly paid - refund was rejected on the ground of time limitation - Section 11B read with provisions of Section 83 of the Finance Act - appellant have paid service tax on GTA under the reversed charged mechanism in respect of transportation of rice from their rice mill to the godown of Food Corporation of India from the period 2015-16 and 2016-17, the service is exempted under the Notification No. 25/2012-ST dated 26.06.2012 as amended.
HELD THAT: - Admittedly, the duty in this case has been paid under the mistake of law as the appellant is engaged in transportation of agriculture products, which is rice, that is exempted by the Notification No.25/2012 dated 26.6.2012. The appellant has paid the service tax under the mistake of law.
The issue is settled in favour of the appellant by the Hon’ble Supreme Court in case of ITC [1993 (7) TMI 75 - SUPREME COURT] and also by the decision of this Tribunal in case of Ambiance Hospitality [2018 (12) TMI 1112 - CESTAT NEW DELHI]
The decision of Hon’ble Supreme Court in case of Doaba Cooperative Sugar Mills, [1988 (8) TMI 103 - SUPREME COURT] is not identical to the case at hand. In this case it was the question of refund of duty and it is the provisions of Section 28 of the Customs Act prescribed have rightly been upheld by the Supreme Court. Therefore, this decision distinguish and not applicable in the facts and circumstances of the case.
Refund allowed - appeal allowed - decided in favor of appellant.
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2019 (12) TMI 1091 - CESTAT HYDERABAD
Condonation of delay in filing refund claim - Refund of service tax - time limitation - refund claim has been filed beyond the period of one year stipulated in the Notification No 17/2011 - HELD THAT:- In similar cases with respect to Exemption Notification No 7/2011 available to SEZ developers, this Bench had taken a liberal view and condoned the delay as was available under the Exemption Notification - reliance can be placed in the case of HBL POWER SYSTEMS LTD. VERSUS CCCE&ST, VISAKHAPATNAM-II [2018 (10) TMI 168 - CESTAT HYDERABAD] where the delay in filing refund claims by the SEZ unit was condoned by this Bench.
The delay in filing the refund claim is condoned and the original authority is directed to sanction refund claim to the extent admissible on merits - appeal allowed.
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