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Service Tax - Case Laws
Showing 1 to 20 of 144 Records
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2023 (5) TMI 1336
Payment of freight for transport of goods by road on the entire value of taxable Service - Entitlement to Abatement under Notification 32/2004-Service Tax - refund claim - Challenge of self-assessment - Unjust enrichment - Compliance with conditions for availing abatement under Notification 35/2004 - HELD THAT:- We observe that the conditions have been imposed on the GTA to give such a declaration on consignment notes. Thus making a declaration on consignment is a burden imposed on GTA and not on service receiver who is made liable to pay Service Tax. Only that they have to be a little vigilant in this regard that GTA’s make such a declaration to make them eligible for the abatement. We observe that the Transporters have issued a certificate to the effect that they have not availed credit on capital goods or inputs, which was accepted by the original adjudicating authority, but rejected by the Revision Authority.
The Appellant has produced certificates received from the transporters to the effect that no credit on capital goods or inputs was availed by them as required in terms of notification 35/2004-Service Tax dated 03.12.2004. The evidences submitted by the Appellant clearly indicate that they have fulfilled the conditions stipulated in the notification and accordingly, we hold that the lower authority has rightly sanctioned the refund claim.
During the course of hearing the Ld A.R raised some issue regarding not challenging the self-assessment by the Appellant, non examination of the unjust enrichment angle by the original authority etc. We observe that they were not the issues raised in the Revision order by the Commissioner. Accordingly, we find no infirmity in the order passed by the original authority sanctioning the refund.
Thus, we set aside the impugned Revision order dated 28.10.2009 passed by the Commissioner and allow the appeal filed by the Appellant.
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2023 (5) TMI 1334
Manpower Recruitment or Supply Agency Service - Seeking amendment in the cause title as well as in the ST-5 Form annexed to the appeal memorandum - Refund of unutilized Cenvat credit - HELD THAT:- We find that the impugned order in this case has failed to appreciate that the staff selected for employment were the employees of the foreign service recipient and not the employees of the appellant. Further, the agreements entered into between the appellant and the overseas entity were not properly scrutinized by the Ld. Commissioner (Appeals), which is evident from the fact that the appellant does not have necessary certificate to carry on the business of Ship Management Services.
Hence in our considered view, the services provided by the appellant pursuant to the agreements, would appropriately be classifiable under Manpower Recruitment or Supply Service, for which the appellant got themselves registered with the service tax department. We find that considering an identical issue, the Tribunal in the case of Commissioner of Central Excise, Mumbai Vs. Jubilant Enpro Pvt. Ltd.[2013 (3) TMI 735 - CESTAT MUMBAI], has held that the correct classification of services provided by the appellant therein should fall under the taxable category of ‘Manpower Recruitment or Supply Service’ and not under ‘Ship Management Service’.
Thus, we conclude that during the disputed period, the appellant had provided ‘Manpower Recruitment or Supply Service’ to the overseas entity and that as per the terms of the agreement, since the recipient of service was located outside India, the service should be considered as export; and as a consequence, the appellant should be entitled for the benefit of refund of input tax credit availed by it.
Therefore, by setting aside the impugned order, the appeal is allowed in favour of the appellant.
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2023 (5) TMI 1269
Refund claim - Service Tax paid on reverse charge basis for the GTA Services utilized by them during the period May 2013 to October 2013 - refund rejected on the ground that the products cleared by them are not in the category of food stuff and the refund claim is hit by ‘unjust enrichment clause’ - HELD THAT:- It is observed from the order passed by the lower Authorities that as submitted by the Learned Counsel they have not given proper consideration to the detailed certificate issued by the Chartered Accountant wherein he has clearly stated that (i) Cenvat Credit has not been taken by the Appellant (ii) The amount of refund claim filed, has been shown as amount receivable/dues from the Service Tax Department.
When such an important document has been filed, the officials are required to give proper consideration for the same and give a clear finding as to why the same was not considered as proper evidence towards ‘unjust enrichment clause’. They have failed to do so.
Coming to the argument of the Learned AR that the initial assessment was not disputed and the Appellant has not gone for re- assessment, in this case, this point will not arise. Here the Appellant is not service provider who has filed their self-assessment order under ST 3 Return. They are service recipients and are bound to pay the Service Tax on RCM basis. In the case of RCM, the recipient does not the assess the Service Tax component nor can he challenge the same by way of re-assessment.
It is deemed fit to remand the matter to the Adjudicating Authority for the following limited purpose:-
(i) The Appellant will produce the original copy of the Chartered Accountant’s Certificate dated 22/03/2014. They will also submit copies of their Balance Sheet from period 2010 to till the present financial year to substantiate their claim that this amount is still being shown as receivable/recoverable from the Service Tax Department.
(ii) The Adjudicating Authority is directed of confine himself to examine these two aspects and pass a considered decision without rising any further issue on account of any other document.
Appeal allowed by way of remand.
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2023 (5) TMI 1195
Short payment of service tax - subsequent adjustment with excess tax paid - appellant submits that the mistake of short or excess payment has occurred due to the newly introduced Works Contract Service - Rule 6 (4A) of STR, 2004 - HELD THAT:- On going through the records of the case and the reconciliation statements submitted by the appellant, it is clear that the appellant has certainly short paid service tax in initial months of April, August and September and excess paid in the months of May, June and July. On reconciliation they have paid the service tax liability along with interest and reflected the same in the returns for the period October 2007 to March 2008. We find that the adjudicating authority simply goes by the show cause notice and bases his confirmation of service Tax on the appellants on the entries made in the ST-3 returns, referring to Rule 6(3) of STR.
The Adjudicating authority has not considered the submissions of the appellant and the reconciliation statements submitted thereof; the Adjudicating authority did not discuss the submissions made by the appellants and the Chartered Accountants Certificate. He proceeds only on the premise that the appellant has violated the provision of Rule 6 (3) of STR, 1994 - it is found that the adjudicating authority did not counter or negate the claims and submissions of the appellants. Not even a single piece of evidence has been adduced to show that the appellants have in fact violated the provisions of Rule 6 (3) of STR, 1994. Except for making a bald averment that the appellants have violated the provisions of Rule 6 (3) of STR, 1994, no other discussion is made to show as to how the conclusions were drawn.
The appellant can adjust the service tax excess paid against his service tax liability for the succeeding month or quarter; sub-Rule 4A of Rule 6 of STR starts with a non-obstante clause and, therefore, the procedure prescribed for the earlier rules, if any, are not applicable in the instant case; the appellant is eligible to avail the provisions of Rule 6 (4A) of STR, 1994. The fact that the appellant has made good the service tax short paid by them, along with interest, is not refuted either in the SCN or the impugned order. Therefore, there is considerable force in the submissions of the appellant.
The Tribunal in the case of M/S. SCHWING STETTER (INDIA) PVT. LTD. VERSUS CCE, LTU, CHENNAI [2016 (6) TMI 239 - CESTAT CHENNAI] has observed that the excess amount paid in the month of May, 2011 adjusted by the appellants in the subsequent months tax liability is absolutely in order. Therefore, invoking Section 73(1) for a non-existing 'short-payment' is not sustainable. Accordingly, the impugned order is set aside.
Tribunal in the case of DELL INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE [2015 (12) TMI 1555 - CESTAT BANGALORE] has observed that when the assessee paid excess amount of tax to the exchequer, law of the land is very clear under Article 265 of the Constitution of India, which says that “No tax shall be levied or collected except by authority of law.” If Revenue becomes very rigid on strict compliance of the procedure every time and all the time, there could be situations where such rigidness and strictness on the part of the Revenue could become contrary to the provisions of the Article 265 of the Constitution of India.
The impugned order cannot be sustained and is liable to be set aside - Appeal allowed.
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2023 (5) TMI 1194
Refund of service tax paid - Custom House Agents - Technical Testing and Analysis Agencies - denial on the ground of time limitation - denial also on the ground that the conditions set out in the N/N. 17/2009-ST dated 07.07.2009 have not been fulfilled by the appellant.
Time Limitation - HELD THAT:- As per para 2(f) the notification No.17/2009, the refund has to be filed within a period of one year. In these appeals, it is seen that the refund claim for different quarters has been entirely rejected by the authorities below. It is submitted by the Ld. Counsel that a few shipping bills may be beyond the time limit. The authorities below ought to have considered the refund claims in regard to shipping bills which are within the time limit of one year. The entire claim for a quarter cannot be rejected merely because few of the shipping bills pertaining to that quarter is beyond the period of one year. The invoices which are filed within the period of one year ought to have been considered for the different quarters - This issue is therefore required to be remanded to the adjudicating authority who is directed to look into the matter as to the shipping bills which are within the time limit of one year.
Rejection of refund claim on input services availed for testing and analysis - HELD THAT:- The authorities below have held that testing is done for raw material and therefore it cannot be said that these services have nexus with the finished products which are exported. Even if the services are used for testing of raw materials such services have nexus with the manufacturing of finished products and therefore eligible for credit/refund. Further, the period involved is prior to 01.04.2011 when the definition of “input services” had a wide ambit as it included the words “activities relating to business”. It is also to be stated that there is no condition attached to the notification with regard to refund claim in regard to testing and analysis services. The rejection of refund claim on the ground.
Rejection of refund claim for the reason that the invoices are issued by the service provider in the address of their Head office at Guindy whereas the input services have been availed by the manufacturing unit at Pallavaram - HELD THAT:- The appellants furnished the address of their Head office to the service provider as it happened to be the Head office. The service provider mentioned such address in the invoices and also for the reason that they received payment from the Head office of the appellant. The Department does not dispute that the appellant has received the services as per the invoices. When there is no dispute with regard to the services availed and the service tax paid, it is opined that rejection of refund is without any basis.
The issue with regard to rejection on the ground of time-bar has to be remanded to the adjudicating authority for de novo consideration. In such de novo adjudication, the adjudicating authority shall take into consideration the discussions and view expressed above by us in regard to issue of testing and analysis services and the issue of invoices mentioning the address of the Guindy unit - The appeals are allowed by way of remand to the adjudicating authority.
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2023 (5) TMI 1193
Levy of Service Tax - business auxiliary service - Tea, an agricultural produce or not - eligibility for exemption in terms of N/N. 13/2003-S.T. dated 20.06.2003, as amended by N/N. 08/2004-S.T. dated 09.07.2004 - denial of benefit on the ground that Black Tea is manufactured by the appellant after multiple processes wherein green tea leaf is converted into Black Tea, which would fall under Chapter 9 of the CETA, 1985 and that the same would no longer remain an agricultural produce of green leaf tea.
HELD THAT:- The meaning of 'agricultural produce', as extracted in the above paragraphs per Notification No. 08/2004 ibid. undoubtedly covers, inter alia, Tea, but, as specified therein, does not include manufactured products such as sugar, edible oils, processed food and processed tobacco. Therefore, the activity of manufacture is limited to products such as sugar, edible oils, processed food and processed tobacco and nothing beyond that - the production of Black Tea involves processes for which there is no bar in the said Notification. Further, the said Notification does not distinguish between Tea or Green Tea or Black Tea, and it is also well understood that there is no alteration to the essential characteristic other than, perhaps, making it marketable as either Green Tea or Black Tea.
Even the processes involved in converting Green Tea into Black Tea does not alter the basic characteristic of the Tea as such and the same could not be considered as a non-agricultural product under any stretch of imagination.
The demand raised against the appellant is not sustainable, for which reason the impugned order is set aside - Appeal allowed.
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2023 (5) TMI 1154
Levy of Service tax - selling passenger cars and also provide free services to their customers during warranty period - cost of materials/spares reimbursed by M/s. TATA Motors - cost of spares and accessories reimbursed for free services provided during the warranty period has to be included in the taxable value or not.
HELD THAT:- The department has relied upon Rule 5 (1) service tax (determination of value 2006) which reads “wherein expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs shall be treated as consideration for the taxable services provided or to be provided and shall be included in the value for the purpose of charging service tax on the said notification”. This Rule was under consideration before the Hon’ble Supreme Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] and it was held that reimbursable expenses cannot be included in the taxable value. The period involved is prior to the amendment of Section 67 of the Finance Act, 1994.
The very same issue as to whether the cost of spares and material used for free services during warranty period has to be included in the taxable value or not was considered by the Tribunal in the case of ABT LTD. VERSUS CCE, COIMBATORE, CHANDRA AUTOMOBILE INDIA PVT. LTD. AND SREE SARADHAMBAL AUTOMOBILES P. LTD. [2018 (5) TMI 716 - CESTAT CHENNAI] and it was held that the cost of spare parts cannot be included for purposes of levy of service tax. Such demand of service tax is not justified and hence are set aside.
The demand cannot sustain - Appeal allowed.
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2023 (5) TMI 1153
CENVAT Credit - rendering both taxable and exempted services and having not maintained separate accounts - providing the interconnection service, was also collecting interconnect usage charges (IUC), the tax on which was being remitted by the appellant only from 01.06.2007 - non-payment of service tax on interconnection service - period from April 2005 to May 2007 - extended period of limitation.
Suppression of fact or not - providing interconnection service and receiving charges for the same - suppressed the fact of not maintaining separate accounts, as required under the statute.
Whether the Revenue is justified in holding that the appellant had utilized the CENVAT Credit in excess of the 20% limit prescribed under Rule 6(3)(c) of the CENVAT Credit Rules, 2004 and whether the consequential demand for recovery of the alleged credit used in excess of 20% is justified?
HELD THAT:- In the impugned order, the Adjudicating Authority has clearly admitted that Show Cause Notice No. 71/2008 dated 28.03.2008 was issued to M/s. Vodafone Essar South Limited, Chennai and Show Cause Notice No. 14/2010 dated 29.04.2010 was issued to M/s. Vodafone Essar Cellular Limited, Coimbatore and it appears that the above Show Cause Notices were for the periods from September 2004 to March 2007 and April 2005 to May 2007 respectively. Further, he appears to have accepted the plea of the appellant in their reply to the Show Cause Notice No. 71/2008 that, in view of the clear provisions of Rule 6(5) ibid., they were entitled to avail and utilize the whole of the CENVAT Credit in respect of the specified services unless the same were used exclusively for providing exempted output service; that it is not the case of the Revenue that the appellant had used any of the specified services exclusively for providing exempted output service and that the restriction under Rule 6(3)(c) would not apply to services specified in Rule 6(5) ibid.
It is clear from the findings of the Learned Commissioner that he has held that the ceiling of 20% under Rule 6(3)(c) is not applicable to capital goods and 17 input services specified under Rule 6(5).
The Bench has also considered the Board Circular No. 137/203/2007-CX-4 dated 01.10.2007 to hold that ceiling of ‘20% of the service tax payable’ on utilization of credit for payment of service tax, as prescribed in Rule 6(3)(c) has to be compared not with total credit utilization, but with the utilization of credit, other than capital goods credit and service tax credit in respect of the 17 input services mentioned in Rule 6(5). That is to say, all the credit pertaining to input services under Rule 6(5) and capital goods credit, should be permitted to be utilized; the restriction is only in respect of the input services credit not falling under Rule 6(5) and inputs.
In the impugned order, the Learned Commissioner however, denies the above benefit to the appellant by holding that the appellant did not provide any evidence or supporting documents to prove their claim - the above conclusion cannot be agreed upon for the reason that the same set of documents, apparently, were relied upon and the Learned Commissioner has also nowhere denied the fact that the eligibility to utilize the whole of CENVAT Credit could not be denied in respect of the specified services unless the same were exclusively used for providing exempted output service and nor is it the case of the Department that the restriction under Rule 6(3)(c) would not apply to the services specified in Rule 6(5).
Extended period of limitation - HELD THAT:- The fact remains that other than alleging wilful suppression of facts, the Revenue has not adduced any documentary evidence in support of its allegation to justify the same - in the very same order in IDEA CELLULAR LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, ROHTAK [2009 (2) TMI 91 - CESTAT NEW DELHI], the Learned Principal Bench has, following the ratios of the Hon’ble Supreme Court, held that something positive rather than mere inaction or failure on the part of an assessee has to be proved before invoking the extended period of limitation, though the Learned Bench has sustained the demand therein for the normal period - The same ratio applies to this case also.
The demand as well as the impugned order, to the extent it is appealed, cannot sustain, either on merits or on limitation and hence, the same is set aside - Appeal allowed.
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2023 (5) TMI 1152
Condonation of delay in filing appeal - sufficient explanation for delay provided or not - appeal dismissed only for the reason that it was filed beyond the statutory time period contemplated under section 85 of the Finance Act, 1994 - HELD THAT:- A perusal of sub-section (1) of Section 85 shows that any person aggrieved by any decision or order passed by the Adjudicating Authority, may file an appeal to the Commissioner of Central Excise (Appeals). Sub-section (3A) of section 85 provided that the appeal shall be presented within two months from the date of receipt of the order of such Adjudicating Authority but the proviso provides that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, allow it to be presented within a further period of one month.
In the instant case, the Commissioner (Appeals) has found that the appeal that was filed on February 11, 2019 was not only filed beyond the period of two months from the order dated January 16, 2018 but was even beyond the extended period of one month and so dismissed the appeal for the reason that there was no power to condone any delay beyond one month after the expiry of one month - The Commissioner (Appeals), however, as is clear from the order dated July 22, 2019, observed the appellant had not submitted any explanation for delay in receipt of the order. Once the appellant had indicated in ST-IV form that the order was received by the appellant only on December 21, 2018, then it was for the Department to have controverted that the order had been received by the appellant earlier to this date and an explanation for the delay should not have been expected from the appellant.
Thus, as the order was actually served upon the appellant only on December 21, 2018 and the appeal was filed on February 11, 2019 which would be within two months from the date of receipt of the order, the dismissal of the appeal by the Commissioner (Appeals) only for the reason that it was filed beyond the statutory period prescribed under sub-section (3A) of section 85 of the Finance Act deserves to be set aside. The impugned order dated July 22, 2019 is, accordingly, set aside and the matter is remitted to the Commissioner (Appeals) to decide the appeal on merits - appeal allowed.
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2023 (5) TMI 1151
CENVAT Credit - common input services used in providing taxable services and exempted services - non-maintenance of separate record for the Cenvat credit availed as per Rule 6(2) of the Cenvat Credit Rules, 2004 - non-payment of amount as provided under Rule 6(3) ibid - whether the adjudicating authority was correct in holding that once the credit availed on common inputs /service is reversed, the appellants are not required to reverse the amount as contemplated under Rule6(3A)(ii) of the said Rules?
HELD THAT:- Adjudicating authority has recorded a finding that there are plethora of decisions of various appellate forums wherein it was consistently held that when the entire Cenvat credit stands reversed, it is as good as not availing the credit. The learned Commissioner has relied upon the decision of High Court in the COMMISSIONER OF C. EX., BANGALORE-III VERSUS HIMALAYA DRUG COMPANY [2011 (2) TMI 1165 - KARNATAKA HIGH COURT]; COMMISSIONER OF CENTRAL EXCISE VERSUS ASHIMA DYECOT LTD. [2008 (9) TMI 87 - HIGH COURT GUJARAT] upheld by the Supreme Court in COMMISSIONER VERSUS ASHIMA DYECOT LTD. [2009 (3) TMI 975 - SC ORDER]; COMMISSIONER OF CENTRAL EXCISE VERSUS ASHIMA DYECOT LTD. [2008 (9) TMI 87 - HIGH COURT GUJARAT]; HELLO MINERALS WATER (P) LTD. VERSUS UNION OF INDIA [2004 (7) TMI 98 - ALLAHABAD HIGH COURT] and some decisions of the Tribunal.
The issue is no longer res integra. In the instant case, the appellants have reversed the entire credit availed by them on common inputs and to this extent the case law of LALLY AUTOMOBILES PVT. LTD. VERSUS COMMISSIONER (ADJUDICATION) , CENTRAL EXCISE [2018 (7) TMI 1679 - DELHI HIGH COURT] relied upon by the authorised representative is not applicable to the facts of the case as the issue decided in Lally Automobiles Pvt. Ltd. was about reversal of proportional credit and requirement of arriving at the amount to be reversed and on reasonable and logical principles.
No case has been made out by Revenue for setting aside the impugned order - impugned order does not suffer from any infirmity and so appeal filed by the Revenue is dismissed.
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2023 (5) TMI 1150
Modification in the quantum of penalty - Exemption from service tax in respect of value of goods and materials sold by the service provider while providing the service - benefit of N/N. 12/2003-ST dated 20.06.2003 - Maximum penalty of Rs.2,74,400/- in terms of Section 77 (1) (a) of the Finance Act, 1994 - failure to take registration - invocation of extended period of limitation.
Whether the appellant has been rightly denied the benefit of Notification No. 12/2003-ST dated 20.06.2003, which provide for exemption from service tax in respect of value of goods and materials sold by the service provider while providing the service? - HELD THAT:- The lower adjudicating authority has held that the appellant has not produced any evidence regarding consumables or spare parts used while providing the AMC service to its customers and the service provider has charged service tax on the gross amount received for the AMC and 4C Bills raised upto April, 2009 and adopted the method of artificially splitting the AMC charges from 20.04.2009 onwards in the ratio of 75% to supply portion and 25% of AMC charges to service portion to avail the benefit of exemption from service tax in respect of value of goods and material sold by the service provider to the recipient of service. Under the Notification No. 12/2003-ST dated 20.06.2003, the appellant is required to provide documentary proof specifically indicating the value of the said goods and materials used in providing the service. The appellant is engaged not only in providing AMC services but also in selling computers, printers and peripherals.
In the absence of any documentary evidence of value of consumables and other materials used co-relating to AMC services, the benefit of notification is rightly denied to the appellant.
Maximum penalty of Rs.2,74,400/- in terms of Section 77 (1) (a) of the Finance Act, 1994 - Whether the penalty imposed at the maximum of Rs. 200/- for every day during which the failure to take registration continued amounting to Rs. 2,74,400/- is justified in the facts of this case? - HELD THAT:- Though imposition of penalty and the amount computed is absolutely legal, a lenient view can be taken in view of the amendments carried out to this Section in Finance Act, 2013, providing for imposition of penalty of Rs.10,000/- at the maximum. The ends of justice will be adequately met considering all the facts in this appeal if the penalty imposed under 77(1) (a) of the Finance Act, 1994 is limited to Rs. 10,000/-. So, modification of the penalty to Rs. 10,000/- ordered, considering the fact that the appellant has obtained necessary service tax registration on 08.04.2009.
Whether the extended period is rightly invoked in the background of the facts obtained in this appeal? - HELD THAT:- The appellant has collected service tax without registration and without filing ST-3 returns and failed to credit the same into the Government account. As such, the extended period is rightly invoked for demand of service tax and also for imposition of penalties in this case.
The impugned order does not call for any interference and so the appeal is rejected but for modification of the penalty imposed under Section 77(1)(a) of Chapter I of the Finance Act, 1994 to Rs. 10,000/-.
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2023 (5) TMI 1131
Refund claim - rejection on account of certain invoices not being submitted within the limitation period of one year in terms of Section 11B of the Central Excise Act, 1944 - rejection also on the ground of availment of CENVAT Credit on account of non-registration of premises as well as availing CENVAT Credit on certain invoices even before payment of Service Tax.
Non-registration of premises - Whether the respondent herein is eligible to avail the CENVAT Credit on inputs / input services without registration of its premises? - HELD THAT:- The Hon'ble Madras High Court in the case of COMMISSIONER OF SERVICE TAX-III, C has held that in the absence of any statutory provision prescribing registration of premises as mandatory for availing input service tax credit, the assessee could not be denied refund of unutilized CENVAT Credit on input services.
The Hon'ble 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 held that Registration not compulsory for refund.
The denial of CENVAT Credit for non-registration of premises is not justified in the facts of these appeals.
Availment of credit which is not due during the quarter - Whether the respondent-assessee can avail CENVAT Credit on inputs or input services before payment of tax thereon and also before the date of invoice? - HELD THAT:- The respondent had availed CENVAT Credit to the tune of Rs.18,169/- prior to the date of payment of tax, i.e., the CENVAT Credit was availed for the refund claimed from April 2013 to June 2013 when the Service Tax was paid on 04.07.2013. The respondent has admitted that it is a procedural lapse, but their substantive right cannot be taken away when there is no dispute as to the eligibility of CENVAT Credit of Service Tax paid and when conditions like payment of tax and receipt of service have been found to be satisfied.
Reliance is placed by the Learned Advocate for the respondent on the decision rendered in the case of COMMISSIONER OF CENTRAL EXCISE, SURAT-II VERSUS WHITE EN-ALL PVT. LTD. [2003 (10) TMI 533 - CESTAT, MUMBAI] wherein it was held that It is not in dispute that, the goods are duty paid, they have used in the manufacture of finished goods, and the only lapse on the part of the respondents is that instead of taking credit on 8-4-1994 the credit was taken on 6-4-1994. It is nobody’s case that, had the credit been taken on 8-4-1994, the same could be held as inadmissible. It is also not brought on record that this credit was utilised before 8-4-1994. Therefore on considering the facts and circumstances of this case, I hold that the credit could not be denied and for this lapse there is no case for imposing penalty.
Reliance placed in the case of M/S INDIA CEMENT LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, TIRUPATI [2018 (5) TMI 603 - CESTAT HYDERABAD] where CENVAT Credit was denied on the ground that the appellant therein had availed the credit before the payment of Service Tax and it was held that in the absence of any dispute that the appellant has discharged the tax liability as per the provisions of the Service Tax Rules and there being no dispute as to the eligibility to avail CENVAT Credit, availing CENVAT Credit before few days in advance is only a procedural lapse; credit cannot be denied on this basis.
The order passed by the Commissioner (Appeals) does not call for any interference - Appeal filed by the Department are dismissed as not maintainable.
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2023 (5) TMI 1130
Reverse Charge Mechanism - levy of service tax - suppression of value - legal, professional and consultancy expenses - security expenses - manpower and security service - invocation of extended period of limitation - HELD THAT:- The show cause notice does not contain the gist of allegations for raising the demand on RCM basis. The provisions of service tax read with the rules thereunder do not provide for raising of demand on the basis of apparent difference in the figure of expenses in the balance sheet and the amount offered for service tax in the ST-3 Returns. This court takes judicial notice that the demand under service tax on reverse charge mechanism, has to be worked out and calculated transaction wise-wise and invoice-wise. In absence of such exercise, it is found that the show cause notices is vague and fit to be held misconceived and mis-directed.
The impugned order set aside - appeal allowed.
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2023 (5) TMI 1081
CENVAT Credit - providing taxable as well as exempted services - non-maintenance of separate records - contravention of Rule 6 (3) of Cenvat Credit Rules, 2004 - availment of credit of input services utilized in the execution of works contract service.
HELD THAT:- The appellant has filed/submitted ST-3 returns for the period April to September 2009, in which they have certainly shown the amount received towards exempted services other than export in respect of Industrial or Commercial Construction Service and nil in respect of Residential Construction Service and Works Contract Service. However, on going through the ST-3 returns for the period 2009-2010, we do not find any such declaration on the part of the appellant. The appellant claimed that they have not availed Cenvat credit, either on inputs or on input services, in respect of exempted services, in the category of Commercial Construction Service or Residential Construction Service, wherever provided - it is incorrect on the part of the Adjudicating authority to came to a conclusion that the appellant availed Cenvat credit on the basis of ST-3 returns which shows income under exempted services. It is not the case of the appellant that he has not provided any exempted services.
It is found that the concept of partial exempted service came into effect from 01.07.2012 by virtue of Notification No. 28/2012. Therefore, the contention of the appellant is agreed upon that during the relevant time, there was no concept of partial exemption and even after 01.07.2012 such partial exemption was with the condition that the said exemption, if any, should be subject to non-availment of Cenvat credit on inputs and input services.
The appellant claimed Cenvat credit only in respect of input services used for providing Works Contract Service - It can be seen that there is no bar under the said rule for availment of Cenvat credit on input services. The bar was only on inputs. Moreover Adjudicating authority erred in holding that the appellant has availed simultaneous benefit of abatement and of Cenvat credit. The appellant submitted that the condition of non-availment of Cenvat credit has been fulfilled in respect of Construction Services and only in respect of Works Contract Service, where there is no express bar on the availment of Cenvat credit on input services, they have availed such credit.
Neither the SCN nor the impugned order identify the specific import services availed both for dutiable and exempted services; they do not qualify the credit availed on common input services. Without doing so confirming the demands on the basis of mere allegations in the SCN is not legally tenable.
The appellant has submitted a certificate dated 14.02.2011 issued by M/s Nirbhaya & Associates Chartered Accountant - the said certificate also provides site-wise credit availed by the appellant. The Adjudicating authority has not discussed anything about the said Chartered Accountant certificate. He has not recorded any findings as to why the Chartered Accountant certificate should be dis-regarded. It is not correct on the part of the Adjudicating authority to pass an order without going through the contents of the said Chartered Accountant certificate; without causing reasonable verification of the same and without negating in the same with cogent evidence and reasons. The Courts and the Tribunal have time and again held that a certificate issued by a professional cannot be dis-regarded or over-looked without adducing cogent evidence to prove that the said certificate is incorrect.
The impugned order is passed without properly going through the submission of the appellant and without going through the records of the case. Adjudicating authority’s findings in respect of availment of Cenvat credit in respect of ICCS, RCCS are factually incorrect. Adjudicating authority erred seriously in applying the concept of partial exemption which came into existence on 01.07.2012 to the impugned order period which is much before that date - Appeal allowed.
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2023 (5) TMI 1080
Recovery of Service tax with interest and penalty - levy of service tax on the amount deducted by the appellant from the vendors towards liquidated damages as they failed to supply the goods/execute the work within the stipulated time - HELD THAT:- For the period prior to 01.07.2012 collection of amount towards liquidated damages was not included in any of the specified taxable services under any of the clauses of sub-section (105) of section 65 of the Finance Act, 1994. Thus, no service tax could have been levied on the amount of liquidated damages so collected.
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.
It is, therefore, not possible to sustain the demand - Impugned order set aside - appeal allowed.
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2023 (5) TMI 1027
Levy of Service Tax - Business Support Service (BSS) - value added services provided by the overseas entity - appellant is the recipient of such service in India - commission charged from the appellant - reverse charge mechanism.
Value added services - HELD THAT:- Apart from supplying the rough diamonds to the appellants, the overseas entity had supplied the value added service to the appellant, which were levied with the service tax demand by the department confirming those services to fall under the scope and ambit of the taxable service namely Business Support Service. The VAS services include supply of planning tools services which include continuity of supply, Intention to offer, Consistency of Boxes, sight holder Extranet services, SOC integrity (3rd party verification) provision of key Account Manager provided by them, as also Business sustainability services like consumer demand, consumer confidence, Best practice principles (BPP) (given at no additional cost along with supply of planning of tools services) which include creating consumer confidence for natural diamond, certification process to ensure that the diamond are mined from conflict-free zones and are not involved into illegal or illegitimate activities.
The value added services provided by the overseas entity are part and parcel of the rough diamond supplied by them and considering the commission amount on such services, the Customs Department had assessed the bills of entry by including such value in the transaction value for the purpose of levy of Customs duty. It is not the case of Revenue that the value added services were otherwise can be arranged or provided by the appellant in furtherance to their business activities; rather availment of the said services were condition precedent, meaning thereby that, those services have to be compulsorily availed from the overseas entity and there is no choice for not availing those services.
From the clarification in D.O.F. No.334/4/2006-TRU dated 28.02.2006 issued by the TRU, it is observed that the intention of the legislature was to collect service tax on the outsourced services only - In the present case, since for provision of the value added services, the appellant had not outsourced services to the overseas entity, it cannot be said that such services provided by the overseas entity should be taxed under the category of Business Support Service. Thus, the confirmation of the service tax demand in the adjudication order on Business Support Service will not stand in judicial scrutiny.
Business Auxiliary Services provided by M/s. H Goldie & Co. Ltd. to the appellant - HELD THAT:- In an identical situation, Tribunal has dismissed the appeal in favour of the importer holding that the activity provided as a commission agent should fall under the category of Business Auxiliary Service. Further, the appellant has also concedes the fact that it is not contesting the demand confirmed under Business Auxiliary Service. Therefore, the appellant is liable to pay service tax confirmed in the adjudication order with regard to that category of service. Hence, there are no infirmity in the impugned order insofar as it has confirmed the adjudged demands under the Business Auxiliary Service.
The matter should go back to the original authority for the limited purpose of quantifying the service tax demand with regard to the Business Auxiliary Service, which should be paid for the units by the appellant - Appeal allowed in part.
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2023 (5) TMI 1026
Levy of Service Tax - Business Auxiliary Service (BAS) - Sharing of Revenue - services provided by unincorporated joint venture to its constituent members - principal-to-principal basis or not - tax on share of Gross Win received from the Joint Venture Entity - the Joint Venture Entity. The period in dispute is from October, 2008 to March, 2013 - applicability of circular No. 179/5/2014-S.T., dated 24/9/2014 issued by Tax Research Unit of CBIC in F. No.354/187/2013-TRU - HELD THAT:- A perusal of the joint venture agreement indicates that out of the net collections from the clients (after deducting the winning amounts), these are settled, by paying 55% to M/s GGCPL and 45% to M/s BAPL.
Upon analysis and scrutiny of the joint venture agreement, including the terms and conditions mentioned therein, the adjudicating authority by relying on the circular No.109/03/2009 dated 23/02/2009 issued by CBIC, had held that there is no relationship of service provider or service receiver between the parties to joint venture agreement and there is no consideration received by either side for the claim of rendering certain service. In conclusion, he had dropped the demand of service tax raised in respect of “Business Auxiliary Service”.
This precise issue of retaining certain amount by a hospital towards the necessary infrastructure facilities provided by it to the doctors who render medical services, for which the patients are charged as fees, and the total fees paid are settled between the hospital and doctors at the ratio of 22:78 had come up for consideration earlier before two benches of the Tribunal in the case of M/S SIR GANGA RAM HOSPITAL VERSUS COMMISSIONER OF SERVICE TAX, NEW DELHI [2020 (11) TMI 536 - CESTAT NEW DELHI].
The demand of service tax for which show cause notice dated 17/4/2014 was issued to the respondent relate to taxable service provided or to be provided, to a client by any person in relation to ‘business auxiliary service’ under Section 65(105) (zzb) of the Finance Act, 1994. From the legal provisions on taxable service relevant to this case, joint venture agreement, the clarification issued by CBIC and the various decisions cited on the issue as discussed above, it transpires that there is no involvement of two persons, to execute the terms of agreement; one is to be considered as service provider and other to be service receiver - by relying on the circular No.109/03/2009 dated 23/02/2009 issued by CBIC, had held that there is no relationship of service provider or service receiver, between the parties to joint venture agreement and there is no consideration received by either side for the claim of rendering certain service. He has further held that the agreement specifically provides that the profit/loss arising out of the business should be shared by both sides.
Thus, service tax liability cannot be fastened on the respondent - appeal of Revenue dismissed.
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2023 (5) TMI 1025
Denial of CENVAT credit - service tax paid on hotel halls booked for business activity and hotel stay expenses - Nexus with output services (of market research) - HELD THAT:- The show cause notice was issued by Revenue for denial of CENVAT Credit on above stated input services. Since, the show cause notice was issued by Revenue, burden of proof was on Revenue to establish that the hiring of halls and hotel rooms had no nexus with the output services. Whereas the finding as recorded by both the original and appellate authorities did not indicate that the burden of proof is discharged by Revenue. Both the Order-in-Original and Order-in-Appeal in the present matter are not sustainable.
The above stated two activities are input services for the appellant for providing output services of market research and, therefore, service tax paid on above stated input services is admissible to the appellant for CENVAT Credit - appeal allowed.
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2023 (5) TMI 1024
SEZ unit - Refund claim - SEZ units are not liable for payment of service tax on the input services as per various notifications issued by the Government of India - input services or not - Renting of Immovable Property Services - Club & Association Membership Services - Waste Management Services - nexus with output services or not - Cleaning Services - Event Management Services - Business Support Services - supporting documents i.e. invoices / details not submitted - Common / shared input services utilised at both the premises i.e. within the SEZ and outside SEZ.
Contention that Renting of Immovable Property Services, Club & Association Membership Services and Waste Management Services are not included in the list of specified services approved by SEZ authorities - HELD THAT:- The competent authority under the SEZ Act, i.e. the Development Commissioner after consideration of the facts and circumstances of the case of the appellants, had included all those disputed services in the list subsequently approved by him. However, such approved list was not examined by the authorities below and the refund applications were not considered favourably by them - Since, the relevant factual aspects are required to be examined at the Original stage, the matter should go back to the Original Authority for examination of the approved list subsequently issued by the Development Commissioner and also to examine the judgements delivered on this ground by the judicial forums.
Denial of the refund benefit on the ground that certain services have no nexus with the output service - HELD THAT:- The authorities below have not specifically denied the fact that the appellant is operating as a SEZ unit for manufacture of electronic motor and such operations were as per the guidelines framed under the SEZ policy. In other words, there is no contra findings by the authorities below that the appellants are also engaged in the business of supplying the manufactured goods within the Domestic Tariff Area (DTA ). Thus, under such circumstances, since the entire goods were manufactured by utilizing the disputed services, the nexus between the input and the output services cannot be questioned by the refund sanctioning authority. However, the original authority had not examined or recorded any findings on the issue whether, the appellants have sold some goods within the DTA as a different unit. Therefore, on the ground of co-relation between the input service and the exportation of goods under the SEZ, the matter has to be verified again at the original stage.
Non-submission of the documents for claiming the refund benefit - HELD THAT:- Learned Advocate appearing for the appellant submitted that all those documents are available with the appellants and the same can be submitted by them before the original authority for proper verification. Since, the appellants accept the facts that they have relevant documents in their possession, and for proper examination of those documents, the matter should also be remanded back to the original authority.
Appeal allowed by way of remand.
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2023 (5) TMI 1023
Refund claim - doctrine of unjust enrichment - Period of limitation - freight inward and freight outward for the period pertaining to April 14 to March 2015 - service tax paid on transportation of Chemical Fertilizer from the different buyers and transported the same by Road to their Pulgaon Factory and the same type of transporting is Exempt Under Notification No- 25/2012 - HELD THAT:- Undisputedly the refund claim has been filed by the appellant much beyond the prescribed period of limitation as per the Section 11 B of the Central Excise Act, 1944 as made applicable to the cases of Service Tax by Section 83 of the Finance Act, 1994. The finding recorded by both the authorities, on this aspect cannot be said to be perverse and should not be interfered with. The impugned order has relied upon series of the decision rendered in the matter by various authorities, which support the view taken.
A part of refund claim has been rejected by the impugned order on the ground of time bar on the reasoning similar to one which was adopted. As it is upheld that impugned order there recording the finding on the issue of time bar which is identical in the present cases this order needs to be upheld on this issue.
In case of COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT], a five judges bench of Hon’ble Supreme Court has held that Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification and When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue.
In view of the decision of the Hon’ble Apex Court, interpreting an exemption notification, in strict manner so as to deny inadmissible refund claimed in respect of service tax paid on the inward transportation service cannot be faulted with. Accordingly the impugned order to the extent it hold that refund claim in respect of inward transportation service is inadmissible cannot be faulted with.
It is now settled law that all the refund claims need to be examined as per the provisions of the section 11B and it is for the claimant to establish that the burden of the tax paid has not been passed on to the consumer of the goods or services. In case the claimant fails to establish the same the refund even if admissible needs to credited to Consumer welfare Fund. Hon’ble Supreme Court has in case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [1996 (12) TMI 50 - SUPREME COURT] has held that Where the petitioner-plaintiff has suffered no real loss or prejudice, having passed on the burden of tax or duty to another person, it would be unjust to allow or decree his claim since it is bound to prejudicially affect the public exchequer. In case of large claims, it may well result in financial chaos in the administration of the affairs of the State.
Both the authorities have after consideration of the facts on recorded have arrived at the finding that the burden of the tax claimed as refund has been passed on by the appellant to their consumers. The finding recorded by both the authorities, on this aspect cannot be said to be perverse and should not be interfered with. The impugned order has relied on the cost accountant certificate to hold that the burden of the tax paid has been built in the price to the end consumer. The cost accountant certificate supports the view taken. Once the burden of the tax paid has been passed on to the consumer, the admissible refund needs to be credited to consumer welfare fund as has been held in the impugned order.
Appeal dismissed.
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