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Service Tax - Case Laws
Showing 1 to 20 of 122 Records
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2023 (4) TMI 1398
Seeking withdrawal of appeal - Constitutional validity of levy of service tax on service provided or to be provided to any person by a restaurant having the facility of airconditioning in any part of the establishment - Sub clause (zzzzv) of clause (105) of Section 65 - power of state government to levy Sales Tax / Value Added Tax (VAT) - Subclause (f) of Clause (29A) of Article 366 - it was held by High Court that 'Levy of service tax on service provided or to be provided to any person by a restaurant having the facility of air-conditioning is not unconstitutional.'
HELD THAT:- The appeal stands dismissed as withdrawn.
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2023 (4) TMI 1369
Levy of service tax - incentives for achieving the sales target - Whether can be considered as commission for providing "business auxiliary service" - HELD THAT:- This issue has been decided in M/s DD Motors [2018 (11) TMI 1763 - CESTAT NEW DELHI] hold on the question of whether the service tax is leviable on the amount of the incentive received by the appellant from M/s Maruti Udyog Ltd. for achieving certain sales targets, we hold that same is not taxable under the category of the business auxiliary service as same being in the form of a trade discount received by the appellant from the supplier of vehicles.”
This decision has been followed by the Tribunal in Rohan Motors Ltd. [2020 (12) TMI 1014 - CESTAT NEW DELHI] Assessee appeal allowed.
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2023 (4) TMI 1329
Demand for service tax - Construction services - supply of materials - Services categorized as Erection and Commissioning instead of Works Contract - HELD THAT:- It is seen that on a similar issue the Coordinate Bench of the Chennai in the case of Real Value Promoters Pvt Ltd [2018 (9) TMI 1149 - CESTAT CHENNAI] has held that even for the period subsequent to June 2007, if a Show-Cause Notice is issued demanding Service Tax under another heading whereas the service pertains to Works Contract, the same does not survive.
In this case, the demand is confirmed under Erection, Commissioning and Installation Services, whereas admittedly the appellant has undertaken Works Contract service. Hence the decision of Real Value Promoters Pvt Ltd [2018 (9) TMI 1149 - CESTAT CHENNAI] is squarely applicable. Accordingly, the confirmed demand for the month of June 2007 is set aside.
The appeal is allowed with consequential relief if any.
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2023 (4) TMI 1325
Classification of services - Cargo Handling Services or not - movement of goods from the premises of M/s Essar Steel Ltd. to Essar Steel Ltd.‟s Depot/ Job workers/ premises of their customers - Demand of service tax - Cargo Handling Service - sea freight and rail freight components - Extended period of Limitation - Suppression of facts or not.
Classification of services - Cargo Handling Services or not - movement of goods from the premises of M/s Essar Steel Ltd. to Essar Steel Ltd.‟s Depot/ Job workers/ premises of their customers - HELD THAT:- The statutory definition of cargo handling service makes it clear that loading, unloading, handling of cargo for all modes of transport and any other service incidental to freight would be covered by the definition of “cargo handling”. The definition also very clearly specifies that mere transportation of goods will not be considered as cargo handling service. The definition itself clarifies that if the activity is only of transportation, then the said activity cannot be called as cargo handling service.
The activities undertaken by the appellants under the disputed contract and discussed by the Learned Commissioner in impugned order primarily involves transportation of goods via Road/ Rail/ Sea. The activities incidentally even if involve some loading and unloading of goods while carrying out the principal activities under the contracts, such incidental activities of loading and unloading undertaken by the appellant cannot give the entire contracted activities the character of „cargo handling services‟. As such, the activities undertaken by the Appellant are primarily in the nature of transportation. Also, this Tribunal in COMMISSIONER OF SERVICE TAX, RANCHI VERSUS M/S HEC LTD. [2018 (3) TMI 19 - CESTAT KOLKATA] on a similar issue has held that 'The activities carried out by the assessee-respondents are primarily transportation of goods and loading & unloading, etc., which are incidental to the transportation of goods. Such activities cannot be covered within the services of „Cargo Handling‟ as has been rightly held by the lower authorities.'
Demand of service tax - Cargo Handling Service - sea freight and rail freight components - HELD THAT:- In the present matter revenue could not satisfactorily establish that the disputed activity of appellant is covered under the head of “Cargo Handling Service” - the impugned order passed by the Commissioner deserves to be set aside.
Extended period of Limitation - Suppression of facts or not - HELD THAT:- There is no suppression or wilful misstatement on the part of the Appellant. The Appellant in the present matter also provided all the details/documents/records related to the disputed activity before department, which were statutorily maintained and existed all the time as per statutory requirement under the various taxation laws such as Income Tax, Companies Act etc. In these circumstances charge of suppression or wilful misstatement does not survive against the Appellant. Thus extended period of limitation is also not invokable in the present matter.
The impugned order is set aside - appeal allowed.
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2023 (4) TMI 1319
Exemption from Service Tax - work contract service other than those which are commercial in nature rendered to the Central / State Government, Local Statutory Authorities etc. - Entry 12(a), (c) & (f) in Mega Exemption Notification No.25/2012-Service Tax, dated 20.06.2012 - validity of Notification No.6/2015-Service Tax, dated 01.03.2015 - it was held by High Court that The prayer for a direction to refund of tax already paid by the petitioner also cannot be countenanced as these petitioners are liable to tax - HELD THAT:- There are no reason to interfere with the impugned judgment and order of the High Court. The special leave petitions are dismissed.
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2023 (4) TMI 1316
Seeking withdrawal of appeal - full and final settlement of the dues - HELD THAT:- A certificate in Form IV has been issued to the appellant regarding full and final settlement of the dues. The appeal, therefore, stands dismissed as withdrawn.
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2023 (4) TMI 1198
Taxability - business auxiliary service (bas) - amount received by the appellant from the customers who purchased vehicle for assisting the registration of the vehicles with the Regional Transport Office tax - period prior as well as to 01.07.2012
Period prior to 01.07.2012 - HELD THAT:- The issue for the period prior to 01.07.2012 is covered by the decision of the Tribunal in Arpanna Automotives [2016 (3) TMI 308 - CESTAT MUMBAI] where it was held that In our considered view helping the purchaser with registration with the RTO, cannot be considered by Business Auxiliary Service, in view of the foregoing, we hold the Service Tax demand of the amount retained by the appellant in respect of RTO registration fees is not sustainable. The impugned order is set aside - thus, the Commissioner was not justified in confirming the demand of service tax under BAS for the period prior to 01.07.2012.
Period post 01.07.2012 - HELD THAT:- The issue was decided in favour of the appellant by the Commissioner (Appeals) in the order dated 19.12.2018 where it was held that Further, for an activity to be considered a declared service as defined in clause (e) of the Section 66E of the Finance Act, 1994, the two parties must agree for the act or for refraining from an act, for a consideration. In the case of the appellant, though certain amounts, as mentioned above, were billed/ received, there was no such agreement for an act or refraining from an act between the appellant and any other person and no consideration was agreed upon. In view of the above, the amounts received/billed by the appellant neither constituted a consideration for providing a Business Auxiliary Service or Business Support Service prior to 1.7.2012 nor did the same fall within the ambit of a declared service with effect from 1.7.2012 - It would be seen from the aforesaid order passed by the Commissioner (Appeals) that even for the period post 01.07.2012 the activity could not have been considered as a declared service and, therefore, the demand could not have been confirmed.
Even otherwise, the second and the third show cause notices do not propose to demand service tax under section 65B(44) of the Finance Act and merely refer to the first show cause notice which, as noticed above, proposed demand of service tax under BAS. Apart from the fact that the demand could not have been confirmed under section 65B(44) of the Finance Act for the reason that the activity cannot be considered as a declared service under section 66E(e) of the Finance Act, a demand cannot also be confirmed on an allegation other than an allegation contained in the show cause notice. Thus, the Commissioner was not justified in confirming the demand for the period post 01.07.2012.
Appeal allowed.
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2023 (4) TMI 1197
Refund of Service Tax - principles of unjust enrichment - refund was sanctioned but the same was credited in the Consumer Welfare Fund on the ground that appellant have recovered service tax from their customers and the same was shown as expenditure in the books of accounts - service tax on Tour Operator Service discontinued by Issuance of N/N. 20/2009-ST dated 07.07.2009 having retrospective effect.
HELD THAT:- The very issue involved in the present case is no longer res-integra as the same has been decided against the assessee in CCE & ST – RAJKOT VERSUS M/S EAGLE CORPORATION PVT LTD. [2018 (7) TMI 855 - CESTAT AHMEDABAD] and M/S RAJDHANI TRAVELS, M/S RK TRAVELS, M/S NEW RAJDHANI TRAVELS, M/S TANNA TRAVELS AGENCY VERSUS COMMISSIONER (APPEALS) OF CENTRAL EXCISE [2018 (4) TMI 168 - CESTAT AHMEDABAD] - In the identical set of facts and legal issue involved in the present case as well in the cited decisions wherein it was held that refund of the appellant in the above cases is hit by unjust-enrichment.
Since the appellant have paid service tax in the routine course and subsequently when the service tax was made exempted retrospectively, the incidence of service tax stood passed on. Therefore, the lower authorities have rightly credited the refund amount in the Consumer Welfare Fund - Appeal dismissed.
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2023 (4) TMI 1196
Levy of Service tax - Liquidated damages received by the appellant for tolerating the delay - amounts to declared service within the meaning of Section 66E (e) of Finance Act or not - HELD THAT:- The assertion of the Learned Advocate for the appellant is found to be correct since a more or less similar issue has been considered and settled in favour of the assessee.
In the order in the case of M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI], it is found that the Learned Delhi Bench has analysed the scope and ambit of Sections 65B (44), 66E (e) and 67 (1) of the Act and they have also analysed and applied various decisions of the Hon’ble Apex Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT], UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] and FATEH CHAND VERSUS BALKISHAN DAS [1963 (1) TMI 46 - SUPREME COURT] and thereafter, has concluded that the view of the Principal Commissioner therein that the penalty amount, forfeiture of earnest money deposit and liquidated damages received by the appellant therein towards “consideration” for “tolerating an act” as being amenable to Service Tax under Section 66E (e) of the Finance Act, was not sustainable.
The issue is required to be answered in favour of the assessee, for which reason the impugned order cannot sustain - Appeal allowed.
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2023 (4) TMI 1195
Classification of services - business auxiliary service - commission paid to foreign agents - reverse charge mechanism - benefit of exemption under Notification No. 14/2004-S.T. dated 10.09.2004 - HELD THAT:- The assertion of the Learned Advocate for the appellant is found to be correct, as a more or less similar issue has been considered in the light of the very same Notification No. 14/2004-S.T. dated 10.09.2004 by this very Bench in the case of M/s. Texyard International [2015 (8) TMI 794 - CESTAT CHENNAI] where it was held that The exemption of service tax under BAS was allowed in relation to four industries namely agriculture, printing, textile processing and education. Therefore, the appellant being textile industry, it is covered under the category "textile processing" in the notification.
The liaising with customers and getting export orders is itself a ‘procurement of service’ within the meaning of (a) under Notification No. 14/2004 and the same would also amount to provision of service on behalf of the client as per (c) of the above Notification.
The findings arrived at by the lower authority that the activities of the foreign agents would not amount to any taxable service under Notification No. 14/2004, cannot be agreed upon.
The denial of the benefit of exemption under Notification No. 14/2004 by the lower authority is not sustainable, for which reason the same is set aside - Appeal allowed.
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2023 (4) TMI 1194
Classification of Services - mandap keeper service or not - appellant provides services in relation to birthday parties, kitty parties and marriage parties and has the ability to arrange parties for a group comprising between 700 to 800 people - period 2008-2009 to 2011-2012 - demand has been calculated on the basis of daily receipt and expenditure sheet for the disputed period even though the appellant had explained that all the entries did not relate to appellant company as some of the entry related to family members - misreading of statements - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- A mandap keeper is a person who allows temporary occupation of a mandap for a consideration for organizing any official, social or business function. ‘Mandap’ means any immovable property and includes any furniture, fixtures, light fittings and floor covering let out for a consideration for organizing any official, social or business function. Any service is provided or to be provided to any person by a mandap keeper in relation to the use of mandap in any manner would be taxable under section 65(105)(m) of the Finance Act.
A Circular dated 23.08.2007 issued by the Central Board of Excise and Customs clarifies that halls or rooms let out by hotels/restaurant for a consideration for organizing any official, social or business function would be covered under the definition of mandap and such hotels and restaurant would be covered within the scope of mandap keeper. Accordingly, service tax would be leviable on services provided by hotels and restaurant in relation to letting out of halls or rooms for organizing any official, social or business function.
The defence taken by the appellant that it was operating hotels/ restaurant and serving food on per plate basis was not accepted by the Commissioner in view of the categorical statement of the manager (operations) and the director of the appellant, as also the records resumed by the investigating officers under the panchnama dated 24.12.2011 containing bills relating to mandap keeper service. The contention of the appellant that the documents which formed the basis of the order passed by the Commissioner were not relied upon by the department cannot also be accepted for the reason that Annexure A to the panchnama clearly contains the description of the said documents. The finding recorded by the Commissioner in this regard, therefore, does not suffer for any infirmity.
It is clearly a case where the appellant had suppressed material facts on the department in order to evade payment of service tax and, therefore, the extended period of limitation was correctly invoked under the proviso to section 73(1) of the Finance Act. The imposition of the penalty and interest by the Commissioner in the impugned order also does not suffer from any illegality.
Appeal dismissed.
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2023 (4) TMI 1135
Levy of Service Tax - Classification of service - Construction of Complex Service - Works Contract Service - construction of flats was for the service recipients per se - period from 01.02.2007 to 30.06.2010 - HELD THAT:- It is a matter of record, as observed from the Show Cause Notice, that the appellant, who is a developer, was rendering typical works contract service, for which reason they had started paying Service Tax with effect from December 2007, thereby availing the benefit under the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007. The fact however remains, by virtue of the construction agreements entered into with their prospective buyers, that, in essence, they were rendering works contract service in the construction of flats and this aspect has not been denied by the Revenue either in the Show Cause Notices or in the impugned order.
The CESTAT, Chennai Bench in the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2018 (9) TMI 1149 - CESTAT CHENNAI] has, following the dictum of the Hon’ble Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT], held that in respect of projects executed prior to 01.06.2007, being in the nature of composite works contract, could not be brought within the fold of commercial or industrial construction service or construction of complex service and for the period post 01.06.2007, the liability to Service Tax could be fastened only if the activities were in the nature of services simpliciter - The period of dispute is from February 2007 to June 2010 and from July 2010 to March 2011, and there is no dispute that from December 2007, the appellant is remitting the Service Tax under works contract service.
Thus, the position of law is that there is no Service Tax liability as and when the construction of flat is for the personal use of the service recipient. Admittedly, in the case on hand, by virtue of agreements entered into by the appellant with the prospective buyers, which is reflected in the Show Cause Notice, it appears that there is no dispute that the construction of flats was for the service recipients per se.
Demand do not sustain - appeal allowed.
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2023 (4) TMI 1134
Valuation of service - Air Travel Agent Service - inclusion of commission received by the appellant on the fuel surcharge in the basic fare - Rule 6 (7) of the Service Tax Rules, 1994 - period from December 2008 to February 2009 - HELD THAT:- In the case of M/S AKBAR TRAVELS OF INDIA PVT. LTD. VERSUS THE PRINCIPAL COMMISSIONER OF SERVICE TAX, NEW DELHI [2020 (3) TMI 376 - CESTAT NEW DELHI], the Principal Bench has, after following the order in M/S. KAFILA HOSPITALITY & TRAVELS LTD. VERSUS CST, DELHI [2015 (1) TMI 387 - CESTAT NEW DELHI], chosen to remit the matter back to the file of the Principal Commissioner for passing a fresh order since the Bench was satisfied that the Principal Commissioner had not considered the contentions of the appellant therein that that the commission on fuel surcharge was not paid normally to the Air Travel Agents by the Airlines.
Rule 6 (7) ibid. clearly gives an option to the taxpayer, specifically an Air Travel Agent, to pay an amount calculated at the rate of 0.6% of the basic fare in the case of domestic bookings and at the rate of 1.2% of the basic fare in the case of international bookings instead of paying Service Tax at the rate specified in Section 66 of the Finance Act, 1994, and as per Section 66, the rate of Service Tax was a flat 12% of the value of taxable services. Section 67 ibid. provides for the assessable value to be the gross amount charged by the service provider for such service - What is relevant from the above is that the option is given to the taxpayer to remit the Service Tax either in terms of Rule 6 (7) ibid. or Section 67 ibid., and once an option is exercised by the taxpayer, the Revenue cannot find fault with the option so exercised.
In the case of JAPAN AIRLINES INTERNATIONAL CO. LTD. VERSUS C.S.T. NEW DELHI [2016 (7) TMI 1077 - CESTAT NEW DELHI], the co-ordinate Delhi Bench has, however, held that fuel surcharge was includible in the assessable value, but it is clear from a reading of the said order that the Bench did not consider the order of the very same Bench in the case of M/s. Kafila Hospitality and Travels Ltd. and has chosen to hold so on the basis of the provisions of Section 67 of the Finance Act, 1994 - Admittedly, the appellant has chosen to pay Service Tax in terms of Rule 6 (7) ibid. and therefore, tax cannot be demanded by applying the provisions of Section 67 ibid. Hence, the ratio in M/s. Japan Airlines International Company Ltd. is not applicable.
An airline may pay commission inter alia on various items, apart from the basic fare, which are indicated clearly in the ticket issued to a traveller. The basic fare is clearly indicated, followed by various other charges in such ticket. Hence, when the basic fare is so specifically indicated, the authorities cannot add or delete anything to the same to say that the basic fare should also include those other things - Rule 6 (7) has to be read, therefore, in the context of the break-ups given in the ticket wherein the basic fare stands clearly indicated and viewed thus, the interpretation drawn by the lower authorities to include the commission on fuel surcharge in the basic fare cannot hold any water, for which reason the impugned order cannot sustain.
Appeal allowed.
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2023 (4) TMI 1133
Classification of services - Manpower Recruitment and Supply Service or not - contract for job work on per piece basis - HELD THAT:- The agreement between the appellant and the service recipient in Gujarati language has been produced by the appellant as Exhibit ‘F’ - A perusal of the bills shows that the amount collected is calculated on the basis of some quantity however, the rate column has been left blank. The contract submitted by the appellant in the appeal memorandum also does not contain any rate list attached with the said contract. In this background it is not possible to verify if the bills raised by the appellant are on per piece basis.
Unless the contract is for supply of manpower, the charge of provision of service under manpower recruitment and supply service cannot be made. A perusal of the bills and the contract submitted by the appellant does not make it clear how the bills have been raised. The bills as well as contract are in Gujarati language. The contract does not contain any per piece rate chart.
Matter remanded back to the original adjudicating authority. The adjudicating authority can examine how the bills have been raised - appeals are allowed by way of remand to the original adjudicating authority.
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2023 (4) TMI 1132
Levy of service tax - Works Contract Service - Construction of canals, water pipeline works etc., under EPC mode for state governments - Road works, earthwork and works to NTPC - Goods Transport Agency (GTA) service - Interest on short paid GTA - Renting of Immovable Property (RIPS).
Construction of canals and water pipelines works etc. - HELD THAT:- From the Table given in the Show Cause Notice and Order-in-Original, it is seen that in respect of the 12 projects, the works undertaken by the Appellant are on account of various canal and other pipeline projects undertaken by them by way of Tender and Contract awarded by the Government of Andhra Pradesh. There is no dispute that the works have been rendered only to the Government of Andhra Pradesh. The Larger Bench in the case of M/S. LANCO INFRATECH LTD. AND OTHERS VERSUS VERSUS CC, CE & ST, HYDERABAD [2015 (5) TMI 37 - CESTAT BANGALORE (LB)] held that Construction of canals for irrigation or water supply; construction or laying of pipelines/ conduits for lift irrigation conceived and integrated into a dam project, must be classified as works contract “in respect of dam” and is thus excluded from the scope of “Works Contract Service” defined in Section 65(105)(zzzza) of the Act, in view of the exclusionary clause in the provision - thus, the demand, interest and penalty in respect of Service Tax demand on construction of canals and water pipelines works etc., carried out for the State Government along with interest and penalty.
Works undertaken for NTPC - HELD THAT:- The Appellant should work out the value of services rendered along with the Service Tax demand thereon, based on all the documents available with them. After this, if they take the stand that Service Tax is not payable on any activity undertaken for NTPC, the same should be brought out along with documentary evidence supported by statutory provisions before the Adjudicating Authority - The confirmed demand in respect of NTPC transaction alone is remanded to the Adjudicating Authority to verify all the documentary evidence to be produced by the Appellant on the above counts. The final amount of demand on account of NTPC transaction will be arrived at by the Adjudicating Authority, which is required to be paid by the Appellant along with interest and penalty @ of 25% of the confirmed amount - matter on remand.
Demand on account of GTA services - HELD THAT:- It is seen that when the opportunity was given to the Appellant at the Adjudication stage to come up with all their submissions along with documentary evidence, the Appellant has not done so. They should have produced the documentary evidence to the effect that some of the freight charges were incurred on account of GTO and as to how the same was exempted from Service Tax, if any. Instead of making such detailed submission along with documentary evidence, the Appellant was simply questioning the quantification which has been correctly done by the Department based on the Profit & Loss Account figures of the Appellant. The Appellant does not dispute the figures taken from the Profit & Loss Account. Therefore, there are no merits in the present Appeal with regard to the confirmed demand of Rs. 11,23,161/- on GTA Services - demand set aside.
Renting of Immovable Property - HELD THAT:- In the absence of any evidence forthcoming that the property has been leased out for residential purpose, the Appellant is required to pay the Service Tax. The amendment carried out with retrospective effect from 01.06.2007 has no impact in the present case - The Appeal in respect of confirmed demand of Rs. 2,19,513/- towards Renting of Immovable Property is dismissed.
Appeal allowed in part.
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2023 (4) TMI 1077
Levy of Service tax - Auctioneer’s Service - Business Support Services - Goods Transport Agency Service - suppression of facts or not - extended period of limitation.
Auctioneer’s Service - marketing and other services rendered for selling agricultural produce of its farmer members - HELD THAT:- A numerous judicial decisions have already gone into the differences between Auction and Tender. The Tribunal in M/S. THE SALEM STARCH & SAGO MANUFACTURERS SERVICE INDUSTRIAL CO-OPERATIVE SOCIETY LTD. VERSUS CCE & ST, SALEM [2018 (3) TMI 192 - CESTAT CHENNAI], has analysed the differences between “auction” and “tender” and held that in the traditional method of auctioneering, apart from the auction process per se the auctioneer also provides a gamut of other related services like providing a facility, advertising or illustrating the goods in auction, engage in pre-auction estimates, short term storage services, etc. - while both sale by tender and sale by auction may have a common intendment of selling the goods, the modalities and the processes involved in each are very different and demand do not sustain.
Further, Learned Advocate has drawn our attention to M/s. Attur Agricultural Producers Co-operative Marketing Society Ltd. Vs. CCE, Salem, [2019 (8) TMI 262 - CESTAT CHENNAI] wherein it has been held This is not service rendered to anybody at all. It is true that, in turn, the appellant has been borrowing money from their bank but it does not mean that the appellant is supporting service of the bank. They are borrowing money from the bank on their account and in turn lending it to their members. In view of the above, we find that demands on both these counts are not sustainable and need to be set aside.
The facts in these two appeals are identical. The marketing and other services rendered by the appellant to their farmer members in selling their agricultural produce through tender process would not be coming under “Auctioneer’s Service under Section 65 (105)(zzzr) of the Finance Act, 1994 - demand do not sustain.
Business Support Services - appellants are taking loans from M/s. Salem District Central Co-operative Finance Bank and utilizing this money in providing jewel loans to their farmer members - HELD THAT:- The services rendered by the appellant are relatable only to its members and not to the bank and the charges collected for appraising jewels before sanctioning of loans are in the nature of cost incurred by the appellant for sanctioning of loans. As such, there is no BSS rendered in the instant case. As such, the demands raised under the impugned orders demanding service tax under “Auctioneer Service” and BAS are not maintainable.
GTA Services - Non-payment of service tax on transport of goods by road - appellants have undertaken the work of lifting and delivering of goods to the ration shops under the Public Distribution System - period from April, 2006 to March, 2011 - HELD THAT:- Reportedly the appellant has undertaken transportation of not only food grains and pulses but also sugar and other articles. The exemption for transport of food grains and pulses is available only with effect from 29th February, 2010. There is a finding in the Order-in-Original that the appellant has failed to give any evidence in order to claim exemption under Notification No. 32/2004-ST which provides for 75% abatement if the transporter has certified as to non-availment of cenvat benefit and also the benefit of Notification No. 34/2004-ST where freight paid on individual consignment upto Rs. 750/- and multi-consignment freight upto Rs. 1500/- exempted from payment of tax. The appellants have failed to submit consignment notes, freight vouchers, ledger account details etc. in order to substantiate their claim for these exemptions.
Appellant has relied upon the decision rendered in the case of M/s. Mutual Industries Ltd. Vs. Commissioner of CST, Vapi [2016 (1) TMI 889 - CESTAT MUMBAI], wherein it was held that denial of benefit of 75% exemption under GTA services for want of endorsement on the consignment note to the effect of non-availment of Cenvat credit is not maintainable - Considering this decision, it is held that the appellant is eligible for the benefit of Notification No. 32/2004-ST dated 03.12.2004 in computation of the demand of service tax payable for GTA service rendered - demand of service tax in respect of GTA Service provided is confirmed for the normal period which needs to be computed after according the benefit of Notification No. 32/2004-ST dated 03.12.2004.
Extended period of limitation - Suppression of facts or not - HELD THAT:- The appellants have put forth that no malafide can be attributed to evade payment of service tax and non-payment of service tax was due to the bonafide belief and there was no deliberate intention for not paying tax and it is the responsibility of the Revenue to discharge the burden that the appellants have deliberately omitted to pay tax. GTA service was introduced w.e.f. January 2005 and the understanding was that individual truck owners engaged would not fall under GTA service - The appellants had mostly undertaken carrying food and other items as part of PDS. So it cannot be said that appellant has wilfully suppressed any facts and so demand in respect of GTA invoking extended period cannot be sustained. As such, penalties imposed under Sections 77 & 78 of the Finance Act, 1994 are not warranted.
Thus, the demands confirmed against the appellant under “Auctioneer’s Service” and “Business Support Service” are not justified. Consequently, demand of interest and imposition of penalties are also set aside - However, demand of service tax in respect of GTA Service provided is confirmed for the normal period which needs to be computed after according the benefit of Notification No. 32/2004-ST dated 03.12.2004.
Appeal allowed in part and part matter on remand.
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2023 (4) TMI 1076
Non-payment of Service Tax on commissions paid by the Appellant for external commercial borrowings - alleged mis-match of freight charges reflected in ST-3 vis-à-vis the books of account of the Appellant - HELD THAT:- CBIC has vide Instruction No.1083/04/2022- CX9 dated 23.05.2022 has laid down the guidelines (SOP) for NCLT cases - it was held in the Circular that A timeline of 90 days from the insolvency commencement date is available for filing of claims. However, it has been observed that there is an inordinate delay in filing of claims by Customs and GST authorities. This leads to their claims not being admitted and extinguished once a resolution plan is approved. It is also observed that the authorities then litigate on the rejection of each claims, despite the settled position that no claims can be raised once the plan is approved and no demands can be raised on the Resolution Application who has taken over the company through such a resolution plan.
It is found that from the date of approval of the Resolution Plan by the NCLT, the Appeal filed by the Appellant has abated and this Tribunal has become functus officio in the matters relating to this Appeal. Further it is also settled that the impugned Order-in-Appeal has got merged in the order of the NCLT approving the Resolution Plan. The Appeal stands abated as per Rule 22 of the CESTAT Procedure Rules, 1982 w.e.f. the date of approval of the Resolution Plan by the NCLT, i.e., 24.02.2023.
Appeal disposed off.
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2023 (4) TMI 1075
Levy of Service tax - amount booked as ‘contractual adjustments’ towards contractor’s failure to lift and sell the prescribed quantity of material from the mines during the currency of contract - Forfeiture of earnest money deposit on account of contractors failure to honor the terms of the contract like delayed/non-payment, further sale of material at more than the prescribed ceiling rate, execution of contract fraudulently by giving incorrect information - Amount booked as other receipts which included aforesaid two amount.
HELD THAT:- The impugned order has observed that the appellant has received the amount as consideration for the failure on the part of the contractors to honor the terms of the contract or violating the conditions of the contract. Accordingly, the amount have been held to be taxable under clause (e) of section 66E of the Finance Act.
In M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI], the Tribunal held that liquidated damages recovered on account of breach or non-performance of contract are not consideration in view of any service but are in the nature of deterrent imposed so that such a breach or non-performance is not repeated.
The Circular dated 28.02.2023 issued by the Central Board of Indirect Tax and Customs also provides that service tax cannot be levied on the amount collected for the said purpose - thus demand on contractual agreement do not sustain.
Alleged short-payment of tax to the extent of dead rent/surface rent paid by the appellant to the State Government - reverse charge mechanism - HELD THAT:- For the purpose of levying service tax, the taxable event is construed as the time when the service is provided or agreed to be provided. Thus, in order to determine whether levy of tax is applicable on a particular activity, it is necessary to determine the point of time when such activity is provided or agreed to be provided. In the present case, the agreement between the appellant and State Government for grant of mining rights was executed on 02.01.2016 and on this date, the transactions involving assignment of right to use natural resource was not taxable - prior to 01.04.2016, barring a few exceptions, all services provided by the Government were covered under the negative list and accordingly, not subjected to service tax.
With effect from 01.04.2016, however, section 66D(a)(iv) of the Finance Act was amended and 'all services provided by the government to a business entity were excluded from the negative list of services. Thus, services rendered by the government to a business entity became chargeable to service tax with effect from 01.04.2016 - In the present case, the appellant received services in relation to assignment of right to use natural resources from the State Government by virtue of the agreement dated 02.01.2016 and, therefore, the provisions of service tax, as were in force prior to 01.04.2016, would be applicable. Grant of natural resources was not excluded from the scope of negative list prior to 01.04.2016 and so no tax implication can be fastened on the appellant for such period - demand do not sustain.
Consideration regarding the fee paid to the Directors by the joint venture company - HELD THAT:- In this connection, it needs to be noted that the amount was only ‘held’ by the appellant on behalf of the joint venture/Directors and cannot be treated as income against provision of any service. Even otherwise, the transaction pertaining to this amount is between the joint venture company and the Directors and the appellant has no role to play.
Whether the appellant provided any services to the State Government against the area development charges? - HELD THAT:- For a service to be taxable, it is necessary that there should exists a service provider and service recipient relationship between the two parties. On a careful perusal of order dated 30.12.1996 issued by the State Government, it is apparent that the appellant was made entitled to 30% of the area development charges received by the State Government. These charges were paid to the appellant for meeting its administrative expenses, especially since the appellant is operating as a public sector undertaking of the State Government. There is no mention of any service which would be performed by the appellant in exchange of such amount. Thus, allocation of area development charges by the State Government can be regarded as income of the appellant, but it cannot be treated as consideration towards a service.
It is, therefore, not possible to sustain the impugned order dated 27.03.2019 passed by the Principal Commissioner - Appeal allowed.
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2023 (4) TMI 1074
Refund of Service Tax paid on input services - appellant performs the role of intermediary for the overseas service receiver - place of provision of services - export of services or not - HELD THAT:- The relationship between the appellant and the overseas entities are that of Principal to Principal, and there is no otherwise relationship namely joint venture, partnership or agencies. It is not the case of revenue that the appellant had failed to export the taxable output service or failed to receive the payment for such services in convertible foreign exchange. Thus, the condition of Rule 6A (1) ibid have been fulfilled by the appellant for consideration of the disputed services as export of service for the purpose of grant of benefit of refund provided under the Rule 5 ibid read with notification issued thereunder. Further, it is also found that the concept of ‘intermediary’ appearing in the Rule 2(f) of the POPS Rules, 2012 has been dealt with by the CBIC under the GST regime.
The concept of ‘intermediary’ appearing in the Rule 2(f) of the POPS Rules, 2012 has been dealt with by the CBIC under the GST regime by Circular No. 159/15/2021-GST dated 20.09.2021 - though the said circular was issued under the GST regime but for the purpose of consideration of such phrase under the service tax regime, it should apply mutatis mutandis - the said circular has been issued on the basis of representations received, citing ambiguity caused in interpretation of the term ‘Intermediary services’, and after examination of the difficulties faced by the trade and industry, the said circular was issued, with a view to ensure uniformity in the implementation of the provision of the law across field formations.
In an identical case, this Tribunal in the case of M/S. BLACK ROCK SERVICES INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CGST, COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX GURGAON, HARYANA [2022 (8) TMI 874 - CESTAT CHANDIGARH] has defined the true meaning and purpose of the phrase intermediary holding that the appellant therein cannot be considered as an intermediary and accordingly, allowed the benefit of refund provided under Rule 5 ibid. - Rather, the contract referred in the case is the sub-contracting agreement for the services being provided by the appellant to overseas entity as the main contractor and thus, under no stretch of imagination, it can be held that the appellant is an agent or intermediary, engaged for facilitating business of overseas entity.
There are no merit in the impugned order, in so far as it has upheld the rejection of refund benefit to the appellant. Therefore, by setting aside impugned order, the appeal is allowed in favour of the appellant.
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2023 (4) TMI 1025
Sabka Vishwas Legacy Dispute Resolution Scheme (SVDLR Scheme) - extension of time limit prescribed under the SVLDR Scheme - HELD THAT:- The High Court has, relying upon the decision of this Court, in the case of M/S. YASHI CONSTRUCTIONS VERSUS UNION OF INDIA & ORS. [2022 (3) TMI 110 - SC ORDER] has rightly dismissed the writ petitions.
The Special Leave Petitions stand dismissed.
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