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Service Tax - Case Laws
Showing 1 to 20 of 71 Records
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2022 (5) TMI 1600 - SUPREME COURT
Seeking further time to file counter affidavit - HELD THAT:- Records reveal that vide order dt. 17.1.2020, Hon'ble Court had been pleased to grant time to the sole respondent for filing counter affidavit, which they failed to do; as such, prayer for further time stands refused.
Appellant has filed affidavit of valuation as well as ad valorem court fee - Registry to process the matter for listing before the Hon'ble Court as per rules.
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2022 (5) TMI 1399 - KERALA HIGH COURT
Validity of SCN and audit notes issued - mandatory pre-show cause notice contemplated under the Master Circular No.1053/02/2017 dated 10.03.2017 not issued - principles of natural justice - HELD THAT:- The contention regarding absence of DIN raised by the petitioner is not significant and the learned counsel for the petitioner did not persist with the said argument and rightfully so. The respondents have pointed out that audit notes have been issued with the DIN, but containing an extra digit by a mistake. On a perusal of the audit notes issued as Ext.P1 and Ext.P2, it is noticed that the presence of DIN in the said documents cannot be disputed, but by an inadvertent mistake, an additional digit was erroneously added to the said DIN. The said extra digit does not ipso facto make the document null and void on the ground of absence of DIN.
By master circular No.1053/02/2017 dated 10.03.2017, issued by the Central Board of Excise and Customs, it is mandatory to issue a pre-show cause notice for consultation, prior to issue of a show cause notice, in cases involving demands of duty above Rs.50,00,000/- - the pre-show cause notice consultation is made mandatory from 21.12.2015 onwards, which is regarded as an important step towards trade facilitation and promoting voluntary compliance and also to reduce the necessity of issuing show cause notices.
A master circular issued by the department is binding upon its officers. The contention of the respondents, that the requirement of consultation contemplated therein is not binding upon Department as it is not a statutory requirement, cannot be countenanced. A circular issued by the department is binding upon the department and its officers. It is trite law that circulars are binding upon the department but not on the assessee or Courts.
The issuance of Ext.P7 show cause notice without following the mandatory requirement of pre-show cause consultation is arbitrary and against the circulars - Petition allowed.
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2022 (5) TMI 1398 - CESTAT MUMBAI
Principles of natural justice - Reply not given for notice served - alternative possibilities not considered - section 33A of Central Excise Act, 1944 - HELD THAT:- The impugned order has placed reliance on the decision of the Hon’ble Supreme Court in JETHMAL VERSUS UNION OF INDIA [1970 (3) TMI 57 - SUPREME COURT] and the decision of the Tribunal in PATEL WIDECOM INDIA LTD. VERSUS COMMR. OF CUS. (ICD), TKD, NEW DELHI [2004 (5) TMI 110 - CESTAT, NEW DELHI]. In Jethmal the issue arises from Sea Customs Act, 1878 which did not have a specific provision for issue of notice as exists in the present statute. The decision of the Tribunal in re Patel Widecom India Ltd arose from the refusal of the noticee to receive the show cause notice and is not in conformity with the circumstances in the impugned dispute.
There are no justification for the peremptoriness of the adjudicating authority in foreclosing grant of opportunity to reply to the notice which would serve in disposal of the proceedings in a fair and judicious manner. On the contrary, he seems to have taken elaborate pains to controvert the essentiality of compliance with principles of natural justice. The haste, so demonstrated, is unseemly. We do not propose to dilate further on the inappropriateness of proceeding to adjudication without the benefit of some response from the noticee.
Matter remanded back to the original authority for fresh adjudication after placing the appellant-noticee on notice of intent to take up, and complete, the adjudication process - appeal allowed by way of remand.
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2022 (5) TMI 1397 - CESTAT MUMBAI
Classification of services - Business Support Service or not - business of exhibiting cinematographic films across India in theatres owned by it or taken on rent - revenue sharing arrangement - whether the arrangement between the appellant and the distributors would lead to constitution of an Association of Persons or whether the same has to be treated on principal to principal basis? - HELD THAT:- Such an arrangement between a distributor/producer and an exhibitor of films was examined by a Division Bench of the Tribunal in Moti Talkies [2020 (6) TMI 87 - CESTAT NEW DELHI]. The Department alleged that the agreement was for 'renting of immovable property' as defined under section 65(90a) of the Finance Act. This contention was not accepted by the Tribunal and it was observed that the appellant did not provide any service to the distributors nor the distributors made any payments to the appellant as consideration for the alleged service. In fact, it was the appellant who had paid money to the distributors for the screening rights conferred upon the appellant.
What also needs to be noticed is that if the appellant was providing such a service, it would be the producers/distributors who would be making payments to the appellant, but what comes out from a perusal of the Agreement is that in consideration for the distributor agreeing to grant to the appellant the license to exploit the theatrical rights of a motion picture, the appellant would have to pay such revenue share to the distributor as provided for in the said clause. In fact, the distributor agreed to grant to the Appellant the non exclusive license to exploit the theatrical rights of a motion picture during the term.
This issue had come up for consideration before a Division Bench of the Tribunal in PVS Multiplex India [2017 (11) TMI 156 - CESTAT ALLAHABAD]. The Bench observed that as the appellant was screening films on revenue sharing basis, the appellant was not liable to pay service tax on the payments made to the distributors for screening the films.
In view of the decision of the Supreme Court in Faqir Chand Gulati [2008 (7) TMI 159 - SUPREME COURT] and the decision of the Tribunal in Mormugao Port Trust [2016 (11) TMI 520 - CESTAT MUMBAI], no service tax can be levied on the appellant under BSS.
Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 1396 - CESTAT MUMBAI
Refund of service tax aid on input services - export of taxable output services - Whether the Onsite services provided by subsidiary or branch of the Appellant located outside India can be treated as “Export of Services" and turnover thereof can be included in the Export Turnover of the Appellant under Rule 5 of the CCR? - HELD THAT:- The subsidiaries/ branch offices did not raised any bill/ invoice on the recipient of the services or received any payments from them. All the services provided by the appellant to their overseas client have been provided under umbrella of a single contract. The subsidiaries/ branch offices of the appellants located overseas do not provide any service to the clients of the appellant independently. No such contractual agreement exists between the subsidiaries/ branch offices of the appellant with the service recipient. The subsidiaries/ branch offices provide the said services to the appellant and raise bill for the same on appellant for which the appellant are also discharging the service tax on reverse charge basis treating them as import of services. Thus these services are input services to the appellant for providing the services to their client overseas.
Whether CENVAT credit has been correctly disallowed by the Ld. Respondent in respect of various input services procured domestically? - HELD THAT:- The case of revenue is that the Commissioner (Appeal) has erred while determining the “total turnover” by deducting the value of onsite services provided by the overseas subsidiaries / branches directly to their clients, which do not qualify as export of services from the value of total turnover. The stand is itself erroneous, the said services which were not provided by the appellants cannot be treated as part of “total turnover” of the Appellant and the hence the order of Commissioner (Appeal) cannot be faulted on this account.
Appeal dismissed - decided against Revenue.
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2022 (5) TMI 1305 - CESTAT MUMBAI
Excess utilisation of cenvat credit - Whether the appellant is liable to pay interest and penalty on account of alleged excess utilisation of cenvat credit accrued at a later date on which appropriate interest has been paid by the appellant? - non-inclusion of value of free supplies made by their customers for provision of services by the appellant - HELD THAT:- The demand of interest on alleged excess utilisation of cenvat credit amounts to double demand of interest, as the appellant has already deposited interest on the delayed payment of tax at the applicable rate under Section 75 of the Act. Thus, the second demand of interest is in the nature of double jeopardy, which is not tenable - the demand of both tax and interest is set aside - decided in favor of appellant.
Whether the appellant is liable to pay service tax with interest and penalty for not including the value of free supplies received from the customer/ principal, in provision of the services? - HELD THAT:- The issue is no longer res integra and it has been clarified by the Hon’ble Supreme Court in the case of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT] that the free issue or supply of material to the contractor or service provider, are not be clubbed in the gross value for determination of service tax liability. The ruling of Hon’ble Supreme Court is applicable in the facts of the case and thus the demand is fit to be set aside - the issue is decided in favour of the appellant-assessee.
Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 1304 - CESTAT MUMBAI
Levy of service tax - Management, Maintenance or Repair Service - collection from the lessees of the plots, an annual fee for providing such services, calling it as ‘service charge’ - HELD THAT:- Hon’ble Bombay High Court IN COMMISSIONER OF CENTRAL EXCISE, NASHIK VERSUS MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION [2018 (2) TMI 1498 - BOMBAY HIGH COURT] has considered the issue in the case of the appellant where it was held that MIDC is a statutory Corporation which is virtually a wing of the State Government. It discharges several sovereign functions - the Revenue ought not to have compelled MIDC to prefer Appeals before Appellate Tribunal - The said order of Hon’ble Bombay High Court has been accepted by the Board as per letter F No. 276/203/2017-CX.8A dated 15.02.2018.
Since the issue is squarely covered in favour of the appellant in their own case, the impugned orders cannot be sustained - appeal allowed.
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2022 (5) TMI 1251 - UTTARAKHAND HIGH COURT
Revival of abated proceedings - matter travelled before the Settlement Commission, but due to lack of Coram, the Settlement Commission, could not decide the case within the time frame prescribed under Sub-section (6) of Section 32F and stood abated - HELD THAT:- The Settlement Commission, could not have adjudicate upon the issue referred to or sought to be referred to by the petitioner, by an order dated 5th March, 2020, passed by this Court, admittedly, it stood abated and consequent to which, the impugned order of 2nd March, 2022, has been passed, whereby, it had been observed, that as per the implications of Section 83 of the Finance Act, 1994, and as an effect of abatement under Section 32F (6), the proceedings are to be relegated back to be decided by the Adjudicating Authority. The Adjudicating Authority, who has been conferred with the power to decide the case, exercises its power and procedure of adjudication under Section 11-A of the Act, which itself is a self inbuilt mechanism, where a case of the petitioner has to be decided as per the procedure contemplated under Section 11-A.
This Court is of the view that there cannot be a revival of an abated proceeding, which had been abated by operation of law, by giving a judicial verdict to revive abated proceedings, before the Settlement Commission.
Though there are various apprehensions expressed by the petitioner, but it is too premature stage to consider any consequential action, which may be punitive in nature to be taken, or which could be a ground for the petitioner to carve out an exception for him to permit him to avail his recourses before the Settlement Commission by overriding the effect of the abatement, as a consequence of the legal implications of Sub- section (6) of Section 32F - Petition dismissed.
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2022 (5) TMI 1250 - CESTAT NEW DELHI
Construction for the purpose of Commerce and Industry or not - Hut Bazaar as was constructed by the appellant for Nagar Palika Parishad, Dhamtari - Whether Hut Bazaar was intended as Nagar Palika Parishad, Dhamtari to be used for any commercial gains instead that of the welfare use thereof? - HELD THAT:- Clause No. 14 (d) of the Mega Exemption Notification further clarifies that any infrastructure provided for the agricultural produce, the services of construction thereof shall be exempted from the tax liability. The department has not produced any document to show that the stalls of ‘Hut Bazaar’ were rented out or auctioned to the farmers. Though the show cause notices alleges the amount proposed to be recovered as a liability towards an amount received after auction of ‘Hut Bazaar’ but there is no single document to support those allegations. The Adjudicating Authority below has denied the money collected by the Government Authorities to whom the services have been provided by the appellant, to be an amount of auction. It is rather mentioned by Commissioner (Appeals) in the order under challenge that the ‘Bazaar Shulk’ / the nominal fee was lifted w.e.f. 01.04.2018.
The issue of collection of nominal fee with respect to the stalls for facilitating the farmers is not an activity of commerce. It is held that Commissioner (Appeals) though had been thoroughly meticulous about the entire demand proposed in the show cause notice but has been wrong while considering the construction of ‘Hut Bazaar’ as an activity of commerce and industry.
Appeal allowed.
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2022 (5) TMI 1249 - CESTAT MUMBAI
Refund claim filed by legal heir of the proprietress - seeking refund tof amount paid by the proprietary concern after the expiry of proprietress, in respect of the amount due in terms of VCES introduced by the “Chapter VI: Service Tax Voluntary Compliance Encouragement Scheme, 2013” vide Section 104 to 114 of the Finance Act, 2013 - HELD THAT:- The decision of SHABINA ABRAHAM AND OTHERS VERSUS COLLECTOR OF CENTRAL EXCISE & CUSTOMS [2015 (7) TMI 1036 - SUPREME COURT] was rendered taking note of the absence of machinery provisions for continuance of proceedings under Section 11A, etc after the expiry of the proprietor. Same is not the case as no such proceeding is there but refund claim has been made in respect of the amounts deposited in terms of the VCES, and as per Section 109 of the Finance Act, 2019 no refund of the amounts paid under the said scheme will be refunded under any circumstances.
Appeal dismissed.
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2022 (5) TMI 1199 - CESTAT HYDERABAD
CENVAT Credit - Input Service Distribution - excess availment of Cenvat credit of more than 20% of credit - Rule 7 of the CCR, 2004 - levy of interest and penalty on the amount of Cenvat credit availed by it on Capital Goods to the full extent in the first year of purchase instead of 50% - HELD THAT:- The issue regarding availment of ISD credit by the Tirupati unit for materials used in other units, the Appellant has submitted that there was no restriction in availment of Cenvat credit as distributed by the ISD unit under Rule 7 of the CCR, 2004.
The issue is settled by the judgment of the Hon’ble Karnataka High Court in the case of COMMISSIONER OF C. EX., BANGALORE-I VERSUS ECOF INDUSTRIES PVT. LTD. [2011 (2) TMI 1130 - KARNATAKA HIGH COURT] wherein it was held by the Court that Merely because the input service tax is paid at a particular unit and the benefit is sought to be availed at another unit, the same is not prohibited under law. It is in this context, the manufacturer is expected to register himself as a input service distributor and thereafter, he is entitled to distribution of credit of such input in the manner prescribed under law - in the instant case of the Appellant also there is no dispute as to the availment of Cenvat credit by the Appellant and the distribution by ISD. The only allegation raised in that the said services are not used by the Appellant and hence Cenvat credit should not be allowed.
Utilisation of excess Cenvat credit by ignoring the provisions of Rule 6(3)(c) of the CCR, 2004 - HELD THAT:- The Appellant has produced certain reconciliations by way of additional submissions which were not produced before the lower authorities.
Since the entire issue in this regard revolves around the calculations as submitted by the Appellant, it is deemed fit to remand the matter to the Adjudicating authority to verify the correctness of the calculations of the Appellant after providing an opportunity of being heard and thereon pass a reasoned and speaking order for the same. The Appellant will be at liberty to produce all relevant statements and records as may be required during such remand proceedings. Thus to the above extent the appeal is allowed by way of remand to the adjudicating authority.
Interest on the excess Cenvat credit availed by the Appellant on capital goods in the first year of purchase - penalty in violation of Rule 4(2)(a) of the CCR, 2004 - HELD THAT:- The matter is squarely covered by the judgment of the Hon’ble Karantaka High Court in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT] where it was held that Section do not stipulate interest is payable from the date of book entry, showing entitlement of Cenvat credit. Interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly - In the instant case of the appellant it is not disputed that the said amounts has been utilised by the Appellant also, hence considering the above we are of the opinion that interest is payable by the Appellant for the amounts utilised towards payment of service tax from the date of availment till the due date of availment and for the purposes of computation of the same, we remand the matter to the adjudicating authority.
Penalty - HELD THAT:- Since the demand of Cenvat credit itself has been dropped in the adjudication proceedings, the question of imposition of penalty under Rule 14 of the CCR, 2004 does not arise.
Appeal disposed off.
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2022 (5) TMI 1198 - CESTAT HYDERABAD
Rejection of rebate claim - export of service or not - rejection on the ground that the same does not qualify as export of service as well as on the ground of unjust enrichment - period from January 2010 to November 2010 - HELD THAT:- This Tribunal in a similar matter pertaining to MRAS services in M/S MEDALLION CONSULTING PRIVATE LIMITED VERSUS CST, DELHI [2017 (4) TMI 96 - CESTAT NEW DELHI] has held that Part performance of service outside India shall be treated as performed outside India.
In the instant case, on perusal of the invoices issued by the Appellant to various overseas customers, it is clear that the benefit of these services are accruing to the customer located outside India. Thus, there is no doubt that the services will qualify to be export of services under the provisions of the Export of Service Rules, 2005.
Unjust enrichment - HELD THAT:- The services to be export of services, then the issue of unjust enrichment does not require our consideration as it is a settled issue that unjust enrichment principles are not applicable to export transactions as held by this Tribunal in the case of VODAFONE CELLULAR LTD AND VODAFONE ESSAR CELLULAR LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2014 (3) TMI 117 - CESTAT MUMBAI].
Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 1166 - ORISSA HIGH COURT
Non-discharge of tax liability - Petitioner neither got service tax registration nor paid any service tax on the taxable consideration received - demand alongwith interest and penalty - HELD THAT:- It transpires that adjudication with reference to evidence on record is required to be made as to whether the conduct of the Petitioner by not discharging its Service Tax liability is a pointer for invocation of jurisdiction under Section 73 of the Finance Act. It is also necessary for the appropriate authority on the basis of pleadings and material particulars available on record to decide whether there was justification in subjecting the assessee-petitioner to adjudication in view of existence of the circumstances spelt out in proviso to Section 73 of Chapter V of the Finance Act, 1994 so that extended period of limitation is attracted. In the considered view of this Court, these questions do require factual adjudication. Needless to note that plea of limitation is mixed question of fact and law. The appellate authority is vested with power to deal with both question of law as also fact.
The Petitioner after arguing for some time sought for permission to withdraw the writ petition to avail alternative remedy of appeal as is available under Chapter-V of the Finance Act, 1994. This Court, therefore, declines to express its views on merit of the case. However, the Petitioner is at liberty to prefer appeal - Petition disposed off.
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2022 (5) TMI 1165 - CESTAT AHMEDABAD
Levy of Service Tax - Cargo Handling Services - Storage and Warehousing services - benefit of cum Duty price - invocation of extended period of limitation - Circular No.18/2009-Customs dated 08 June, 2009 - HELD THAT:- The facts of the case are that the appellant’s are container freight station. The appellant’s are providing services on the basis of a tariff card. There are standard packages which involved the complete service of container freight station (including storage for a specified limited time) at a particular rate. All the appellant’s are paying service tax on such services in case of import of goods. All CFS are not paying service tax on such services in respect of export of goods being net covered in service tax net - All appellant’s are charging a “Storage and Warehousing” fees only in case the cargo stays in CFS beyond the period included in such package rates given in tariff cards. In those circumstances for charges for storages beyond the Warehousing period included in package rate, all appellant’s are paying Service Tax under category of “Storage Warehousing Services”. All CFS are paying Service Tax on reverse charge basis for transportation of cargo under taken by their contractors from CFS to port and vice verrce.
For the period of Storage included within the consolidated package for handling import or export cargo no separate Service Tax need to be paid under the category of Storage and warehousing charges. However, for the period exceeding such period i.e. (the period included in the packages) if any storage and warehouse charges are collected the same are liable to service tax both in respect of import and export cargo - there are no merit in the argument of Revenue that the activity of Cargo Handling in the Container Freight Station is incidental to the Storage and Warehousing activity. From the discussion it is apparent that storage in the container freight station is only incidental to the cargo handling activity. The main purpose of the Container freight Stations is to handle cargo for the purpose of import or exports. The main purpose of the container Freight Stations is not Storage and Warehousing. In these circumstances, we do not find any merit in the order of Lower Authorities.
In the impugned orders that only the “Cargo Handling Services” provided in respect of transportation of goods would be classifiable as “Cargo Handling Services” is misplaced and liable to be rejected - Appeal allowed.
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2022 (5) TMI 1120 - CESTAT MUMBAI
CENVAT Credit - duty paying invoices - whether availment of CENVAT Credit by the appellant on the basis of a debit note availed by M/s IGSSTPL without receiving any service is admissible as per law? - HELD THAT:- As per the agreement, under sub-clause (xxii) of definition under clause (1), the obligation of the Development Manager shall include repayment of loan to Yes Bank together with all cost of services thereof; repayment of Development Manager loan together with all cost of services thereof and repayment of all third party capital together with all cost of services thereof. To appreciate the factual position of the impugned case, it is found appropriate to go through the relevant clauses of the agreement between the appellant and M/s IGSSTPL.
On going through the various clauses of the agreement, it is found that the appellants have entered into an agreement with M/s IGSSTPL; as a consideration of the agreement, a sum of Rs.520 Crores, was to be paid to the Development Manager; all the development activities including planning, organizing, designing, construction, marketing of the project were to be done by the Development Manager and also Development Manager was required to repay the loan amount availed by the appellant from the Yes Bank - The learned Commissioner further goes on to find that the said financial service is not used by M/s Neelkamal Realtors Towers Pvt. Ltd for providing any output services and that M/s IGSSTPL are not in the business of providing financial service, but are in the construction service. The said financial services are consumed by the Development Manager i.e. M/s IGSSTPL and, therefore, the availment of CENVAT Credit of the same, by the appellant, is contrary to the provisions of CENVAT Credit Rules, 2004. He further finds that transaction in money is outside the ambit of service. The passing on to the burden by the Development Manager to the appellants as to be seen is only the transaction in money and not a financial service provided by M/s IGSSTPL.
While deciding the inadmissibility of CENVAT Credit, one needs to be clear as to what is the service rendered; who is the service provider; who is the service recipient; what is the consideration; whether Service Tax has been paid on the same; what is the output service provided by the input credit receiver i.e. the appellants in this case and whether there exists a nexus between the input service on which credit is taken and the output service provided. It is not clear from the records of the case and rival submissions as to whether all the above criteria is fulfilled - In the instant case, the Development Manager who has undertaken the work of construction and development of free land as per the contract entered into with the appellants. As per the terms of the agreement, M/s IGSSTPL would also avail loan from M/s DHFL and transfer the same to the appellants.
It is not possible to come to a categorical conclusion on the basis of the available documents/records, so as to examine the claims of rival parties herein. While holding that credit of Service Tax cannot be availed just because M/s IGSSTPL had raised a debit note on the appellants without rendering any particular service and without raising any invoice on the appellants indicating categorically the details of the service provider, service recipient, the service provided and the remuneration thereof - the ends of justice will be met only if all the relevant issues are considered afresh by the adjudicating authority taking into account all the facts involved in the case.
The appeal is allowed by way of remand to the adjudicating authority by keeping all the issues open.
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2022 (5) TMI 1119 - CESTAT AHMEDABAD
CENVAT Credit - input services - Construction/ Works Contract Service for re-carpeting of road in their industrial estate - credit denied on the ground that it is a new construction of road under works contract service which is excluded in the definition of Input Service under Rule 2(l) of Cenvat Credit Rules, 2004 - HELD THAT:- The fact is not under dispute that the industrial estate already existed and for moving around the Industrial Estate the tar roads were also existing. The works contract/ construction was executed for the purpose of re-carpeting of existing road. Therefore, the said services are for the purpose of repair and renovation of the exiting industrial estate. It is observed from the notes of the Board meeting for the purpose of re-carpeting of the road that it is for re-carpeting and not for new construction of road. Therefore, this service is for repair and renovation and not for originating the new construction.
This issue has been considered in the decision of this Tribunal in the case of RELIANCE INDUSTRIES LTD. VERSUS C.C.E. & S.T. -RAJKOT [2022 (4) TMI 729 - CESTAT AHMEDABAD] where it was held that any service relating to modernization, renovation of the existing factory is admissible as input service which is the direct case of the appellant.
From the above decision of this Tribunal it is clear that any construction and works contract if used for repair and renovation of existing factory, the same falls under inclusion clause of definition of Input Service, accordingly, the Cenvat credit is admissible - Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 1042 - CESTAT NEW DELHI
Clubbing of clearances - Clearing & Forwarding Agent Services - transportation of goods by road with issuance of consignment note for Ultratech - Whether the Revenue is correct in clubbing the two services, which are provided under different agreements as a composite service of C&F agency and demand tax? - Scope of SCN - extended period of limitation - HELD THAT:- Admittedly the demand in the show cause notice was proposed under the head– cargo handling service, whereas in the impugned order-in-original, the demand have been confirmed under the head C & F Agency Service. Thus evidently, the adjudicating authority have travelled beyond the scope of show cause notice. Thus, the impugned order is bad on this score alone.
This agreement is entered into between Ultratech Cement Ltd and M/s S S Enterprises (proprietor Gunesh India private Ltd). Under the clause, scope of work contained in para 2 of the agreement, it is provided that the appellant-assessee shall call the company officials/depot incharge every day to receive instructions regarding arrival of Rakes at the railway siding situated at Kota RH and also collect information regarding arrival of rakes from the Railway Office. The appellant is also required to track the consignment from the railway online system - The appellant is also required to co-ordinate with secondary transporter engaged by the company to load the cement against orders of customers as per the instructions of company officer. In case, any truck of customer is placed, than the same will also be loaded as per the company's instructions. Admittedly, under this agreement the appellant have deposited the service tax on the full value of consideration and there is no dispute in this regard.
The scope of work as provided in the para-2 of the agreement (RUD–2), provides that the appellant shall place trucks for transportation of consignment of the company from railway platform/shed/godown to the various destinations including those of dealers/stockist/individual customers as per the company’s instructions on regular basis. The transport work shall be mainly carried out to different places in Rajasthan from Mata ka Than godown under Jodhpur depot. The list of specified destinations is as per the approved freight list forming part of the agreement - under this agreement under the scope of work, the appellant have correctly treated the work as GTA service and service tax have been rightly discharged by the recipient–Ultratech Cement Ltd under Reverse Charge Mechanism. Thus, the confirmation of demand on the appellant is bad and accordingly set aside.
Extended period of limitation - HELD THAT:- There is no case of suppression, contumacious conduct or mis-statement on the part of the appellant. Accordingly, the extended period of limitation is not attracted and have been wrongly invoked by revenue.
Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 987 - GAUHATI HIGH COURT
Validity of Demand-cum-Show-Cause Notice - seeking direction that the respondent authorities should provide an opportunity of pre-show cause notice consultation to the petitioner - whether the Circular dated 11.11.2021 is clarificatory in nature thereby clarifying the Master Circular dated 10.03.2017? - Suppression of facts or not - HELD THAT:- A Perusal of the said Circular dated 11.11.2021 stipulates that the concept of pre-show cause notice consultation in Central Excise and Service Tax was introduced vide the Board’s instructions dated 21.12.2015 as a trade facilitation measure. Thereupon in para 5 of the Master Circular No.1053/02/2017-CX dated 10.03.2017, the said principle of pre-show cause notice consultation was reiterated. Subsequent thereto, a reference was received from the DGGI to clarify whether the DGGI formation fell under the exclusive/inclusive category of the CBEC instructions dated 21.12.2015 or otherwise and in that regard it was clarified that the exclusion from pre-show cause notice consultation is case-specific and not formation specific. In Clause 5 of the said Circular it was reiterated that the pre-show cause notice consultation shall not be mandatory for those cases booked under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 for recovery of duties or taxes not levied or paid or short levied or short paid or erroneously refunded for the reason mentioned in sub-clauses (a) to (e) of Clause 5. A perusal of the said Circular does not bring anything new.
As the stand taken by the respondent authorities in the impugned show cause notice dated 31.12.2020 that the petitioner had suppressed material facts, the same would come within the exception as mentioned in Clause 5 (d) of the Circular dated 11.11.2021 and as such it was not mandatory for respondent authorities to have a pre-show cause notice consultation. Another aspect also needs to be looked into, i.e., whether the authority which had issued the Demand-cum-Show Cause Notice dated 31.12.2021 had the authority to do so. The power so exercised by the authority is a statutory power conferred upon the respondent authorities under Section 73 of the Finance Act of 1994 and as such the issuance of the said show cause notice cannot be said to be without jurisdiction.
Whether there was suppression of facts in the case of the petitioner? - HELD THAT:- Taking into consideration that this Court is at the stage of deciding whether the said Demand-cum-Show Cause notice dated 31.12.2020 is beyond the jurisdiction and this Court having held that the respondent authorities issuing the Demand-cum-Show Cause Notice have exercised the authority within the realm of the Finance Act, 1994, this Court would not like to go into the said question as any opinion rendered may affect the petitioner or the respondent as the case may be.
Taking into consideration that the petitioner has approached this Court and the matter has been pending adjudication, this Court deems it proper to permit the petitioner to submit his show cause reply within a period of 30 (thirty) days from the date of this judgment before the adjudicating authority as mentioned in the Corrigendum dated 21.02.2022. Upon furnishing the said show cause reply, the respondent adjudicating authority, i.e., the respondent No. 5 is directed to offer the petitioner an opportunity of hearing either online or physically in person or through the authorized representative - this writ petition stands disposed of.
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2022 (5) TMI 986 - CESTAT MUMBAI
Rejection of the application filed under the Service Tax Voluntary Compliance Encouragement Scheme (VCES), 2013 - time limitation - construction of residential complex - rejection on the ground of pendency of enquiry initiated against it before 01.03.2013 that suffered an adjudication process and gone on appeal to the Commissioner of CGST & Central Excise (Appeals-II), Mumbai - period from October, 2007 to December, 2012 - HELD THAT:- It can be noticed that there is a stipulation under Section 106(2) that if any enquiry, investigation or audit is pending on 01.01.2013, VCES declaration shall be rejected. However, no such documentary evidence/proof of such pending enquiry as define in Section 2(g) of the CrPC or investigation under Section 2(h) of the CrPC was found to be available in its true sense that would empower invocation of jurisdiction by the Central Excise Officer under Section 14 of the Central Excise Act except that a letter of authorisation bearing no. 6/2013 was issued on dated 20.02.2013 by the Assistant Commissioner authorising the Superintendent of Anti-evation Consideration Cell to carryout necessary verification of service provided by M/s. Kamla Group or its associated company and Service Tax liability that has been discharged by them before the deadline prescribed in the scheme i.e. before 01.03.2013.
In the instant case notice for personal hearing proposing rejection of application filed under VCES was issued to the Appellant on 1st September, 2015 (page 80 of the appeal memo) which is admittedly after laps of one year of filing of the VCES application on 18.12.2015 and therefore such a proceeding including rejection order is liable to be quashed as unsustainable in law.
The order passed by the Commissioner of CGST & Central Excise (Appeals-II), Mumbai vide rejecting the VCES application filed by the Appellant is hereby set aside - Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 985 - CESTAT MUMBAI
Levy of service tax - scheme of levy under section 66B of Finance Act, 1994 imposed on all ‘services’, as defined in section 65B (44) of Finance Act, 1994, that were either not excluded by section 66D of Finance Act, 1994 (negative list) or not exempted by notification issued under section 93 of Finance Act, 1944 - composite engagement to deliver goods outside the country, for which consideration was received from the recipient of services located outside India - services performed outside the ‘taxable territory’ - Place of Provision of Services Rules - HELD THAT:- It would appear that there is no demand for the pre - ‘negative list’ period and that it was only the inevitable passage of ‘export goods’ through India at commencement of outward journey till loading on ‘foreign going’ vessel/aircraft that was considered to be necessary and sufficient reason for invoking rule 4 of Place of Provision of Service Rules, 2012. In this implied convergence of rule 4 and rule 10 of Place of Provision of Service Rules, 2012, the transaction between M/s ATA Freightline Ltd, New York and M/s ATA Freightline (India) Pvt Ltd was split – as one within India and one thereafter – by appropriating the accountal segregation adopted by the appellant.
Place of Provision of Service Rules, 2012 is not a provision for charging of tax; it is limited to determination of location of taxable entity as an adjunct to the charging provision in section 66 B of Finance Act, 1994. The impugned order has not evaluated the impugned activity from that perspective. In the context of identifiable recipient of service located outside the taxable territory, and concomitant absence of ‘goods provided by recipient of service’ as well as the marked absence of recipient of service in the truncated segment of impugned activity and of the goods being put to use for rendering of service, rule 4 of Place of Provision of Service Rules, 2012 is not applicable. That the activity is transportation of goods is the foundation of the proceedings against the appellant, as is evident from the contrived segmentation of stages according to geography and from the unarguable existence of recipient outside India; rule 10 of Place of Provision of Service Rules, 2012 is unambiguously clear about the consequent non-taxability.
Appeal allowed - decided in favor of appellant.
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