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Service Tax - Case Laws
Showing 281 to 300 of 346 Records
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2018 (9) TMI 323 - SC ORDER
Classification of service - taking two helicopters on lease from the two foreign lessors ADA, Abu Dhabi and BLFIL, Ireland on dry lease basis - activity is in the nature of sales (deemed sale) or service - Business Support Service or activity as supply of tangible goods for use without transfer of right of possession and effective control - Held that:- The appeal is dismissed on the ground of delay, leaving the question of law open.
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2018 (9) TMI 322 - SC ORDER
Business Auxiliary Services - threshing and re-drying operations of tobacco leaves - demand along with interest and penalties for the period April, 2013 to March, 2014 - Held that:- Identical issue was decided in the case of M.L. AGRO PRODUCTS LTD. VERSUS COMMISSIONER OF CUS., C. EX. & S.T., GUNTUR [2017 (2) TMI 1355 - CESTAT HYDERABAD], where it was held that the activity of the assessees is in relation to the agriculture and not subject to service tax as a Business Auxiliary Service even before or after the negative list was issued on 1-7-2012 - demand set aside - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 321 - BOMBAY HIGH COURT
The questions as proposed do not give rise to any substantial questions of law as issue raised stand concluded by the decision of this Court - appeal is dismissed.
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2018 (9) TMI 320 - ALLAHABAD HIGH COURT
Maintainability of petition - Alternative remedy of appeal - Demand of Service tax - Held that:- As the petitioner has an alternate remedy of appeal, we do not deem it necessary to exercise our extraordinary jurisdiction in the matter - The petition is dismissed on the ground of alternate remedy. The petitioner, if so advised, may move an application in appeal for the exemption/waiver of the condition of pre deposit of 7.5 percent of the tax demanded.
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2018 (9) TMI 319 - CESTAT NEW DELHI
Business Auxiliary Services - business of car finance - during the period w.e.f. July 2003 to December 2004, did not make payment of Service Tax - during the course of investigation itself the appellant obtained a service tax registration on 25.10.2004 for Business Auxiliary Service and have since then started paying the service tax - demand of service tax - time limitation.
Held that:- The nature of activity of the appellant is promotion on marketing of the services provided by the client. The same very much falls under sub Clause (ii) of 65(19) of the Act. The appellants actually were sourcing customers for the above mentioned banks. The actual agencies which provide the financial service by giving loans are those banks. They are actually the clients of the appellants. Thus, the services of the appellants were very much that in the nature of Business Auxiliary Services.
Time limitation - Held that:- It is an admitted and apparent fact that since 01.07.2003, the appellant has not discharged the liability. They only got themselves registered under Business Auxiliary Services on 25.10.2004 but the simultaneous fact remains that during the said period (since 01.07.2003 to 10.09.2004), there was a prevalent confusion about the nature of the impugned activities - In the present case also, the demand is for the period w.e.f. July 2003 to December 2004. The Show Cause Notice was issued on 31.07.2007. Once there was an apparent acknowledged confusion about the impugned activity, nondischarge of the liability thereof cannot be alleged as an act of suppression of fact with an intent to evade tax. Resultantly, the Department was not entitled to invoke the extended period of limitation - demand is barred by limitation of time.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 318 - CESTAT NEW DELHI
Classification of services - advertising agency service - multi system operator services (MSO) - whether the said services would be taxable under the head Cable Operator service or not? - extended period of limitation - Held that:- The definition under section 65 (20) has been amended with effect from 10.9.2004, wherein multi system operator were also been included in the scope of ‘cable operator service’ - Service tax is leviable on the ‘multi system operator’ providers since 10.9.04 and as the appellants have been providing multi system operator services, they are very much covered under Section 65(20) of the Finance Act, 1994 under the ‘cable operator service’ - demand upheld.
Extended period of limitation - Whether the extended time proviso, circumstances in which the appellant operated is invokable or not? - Held that:- The Since the assessee was very much paying service tax as well as filing the Service tax returns for the other services , they cannot claim that they were not aware about the changes that came into effect from 10.9.2004 - longer period of limitation is available to the Revenue.
Appeal dismissed - decided against appellant.
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2018 (9) TMI 317 - CESTAT CHENNAI
CENVAT Credit - common input services which were used by them for taxable as well as exempted services - Rule 6 (3) (c) of CCR 2004 - appellants were earlier availing credit on input services which were used by them for taxable as well as exempted services and were utilizing such credits only to the extent of 20% of the output tax liability in terms of Rule 6 (3) (c) of CCR 2004 during the material time. However, from August 2005, they switched over to the present system of availing full credit on such common input services, for which no separate accounts were maintained, and utilized the full amount of such credits.
Held that:- Admittedly, the appellants were using inputs / input services which are common for exempted as well as taxable output services. In respect of certain services, they have maintained separate accounts in terms of Rule 6(2) which was found to be correct and proper by the original authority. However, the dispute is in respect of certain other common input services they have followed the scheme under Rule 6 (3).
It is clear that Rule 6 (1) is a substantive plenary provision - Hon'ble Supreme Court in CCE Vs Gujarat Narmada Fertilizers Co. Ltd. [2009 (8) TMI 15 - SUPREME COURT] held that sub rule (1) of Rule 6 is plenary. It restates a principle, namely, that CENVAT credit of duty paid on inputs used in the manufacture of exempted final product is not allowable. This principle is inbuilt in the very structure of the CENVAT scheme.
The mechanism adopted by the appellant for following both sub-rule (2) and sub-rule (3) in respect of different common input services defeats the very restrictions placed under different conditions of sub-rule (3). As seen in the present case itself that appellant invoked clause (c) of sub-rule (3) and submitted that they were not hit by restriction of 20% in utilizing credit on tax liability of final output services, on the ground that total credit availed under sub-rule (3) falls short of the same. We note this claim is misleading and ignoring the fact that they have maintained separate accounts and availed full credit in respect of common input services attributable to taxable output services in terms of sub-rule (2).
The appellants should follow legal provision as per Rule 6. Having not followed, they cannot take a plea that there is no provision to deny credit already availed. When the appellants maintained separate accounts for common input services and availed credits under sub-rule (2) of Rule 6, then there is no question of another option for common input services under sub-rule (3) of Rule 6.
Regarding submission of the appellant that the present order is beyond the scope of remand directions of the Tribunal vide final order dated 29.09.2008, we note that the Tribunal made an open remand of the case for a de novo adjudication. As such, original authority examined the issue and passed the order. In the present appeal, we have examined the grounds agitated by the appellant and we are in agreement with the final finding of the original authority.
Extended period of limitation - penalty - Held that:- The appellants were actually following Rule 6 (3) with restrictions of utilisation upto 20% in terms of Rule 6 (3) (c) upto August 2005. Admittedly, they have now knowingly switched over to the present system of selectively following Rule 6 (2) as well as Rule 6 (3) which resulted in the present dispute - extended period and penalty rightly invoked.
Appeal dismissed - decided against appellant.
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2018 (9) TMI 316 - CESTAT CHENNAI
CENVAT Credit - trading activity - common input services availed for taxable service as well as for trading - non-maintenance of separate records - what is the amount that the appellant has to reverse when common input services have been used for taxable service as well as trading when separate accounts have not been maintained?
Held that:- With effect from 1.4.201, the position is very clear for the reason that trading has been made a deemed exempted service and Rule 6(3D)(c) of CENVAT Credit Rules clearly provided for the formula to arrive at the amount that has been reversed. However, for the period prior to 1.4.2011, there was much confusion as to whether trading is an exempted service or can be considered as service at all - In Ruchika Global Interlinks Vs. Commissioner of Central Excise [2017 (6) TMI 635 - MADRAS HIGH COURT], the jurisdictional High Court has held that the trading is to be considered as an exempted service prior to 1.4.2011 also.
The appellant is required to reverse the credit as per the formula in Rule 6(3D)(c) of CENVAT Credit Rules, 2004 in respect of trading. However, the said amount has to be quantified - The appellant also contends that they have reversed the said amount pertaining to trading. This requires verification and for its quantification of the amounts that has to be reversed by the appellant, the matter is remanded.
Appeal allowed by way of remand.
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2018 (9) TMI 315 - CESTAT CHANDIGARH
Rejection of Voluntary Compliance Entitlement Scheme application - acknowledgement of discharge of declared tax dues not issued - Section 108 of Finance Act, 2013.
Held that:- It has been provided under Section 108 of Finance Act, 2013 that on the furnishing details of full payment of declared tax dues and interest the designated authority was bound to issue an acknowledgment of discharge of such dues to the declarant and after such acknowledgement was issued to the declarant no matter is eligible to be opened in any proceedings - The said provisions of Section 108 are not applicable in the present case in the absence of issue of such acknowledgement of discharge of declared tax dues.
Appeal dismissed - decided against Revenue.
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2018 (9) TMI 314 - CESTAT MUMBAI
Waiver of penalty u/s 76 and 78 - case of Revenue is that Commissioner (Appeals) has appropriated the Service Tax and interest paid by the assessee, but has failed to appreciate the fact that it was only on the basis of observation of Audit that non-payment of Service Tax came to light - Held that:- The respondent did not pay the Service Tax even after the decision of Hon'ble High Court of Bombay in the case of Indian National Ship Owners' Association [2009 (3) TMI 29 - BOMBAY HIGH COURT], and it was only when the Audit pointed out in July, 2012, the respondent paid the Service Tax - invocation of Section 76 is justified.
Penalty u/s 76 justified - appeal allowed in part.
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2018 (9) TMI 313 - CESTAT MUMBAI
CENVAT Credit - input service - renting of immovable property service - denial of credit on the ground that the premises No. 67 was not registered with the department - whether the appellant are entitled to cenvat credit of the service tax paid on input service namely, renting of immovable property, relating to Unit No. 67, Atlanta, Nariman Point, Mumbai? - Held that:- It is not in dispute that the appellant have been providing taxable service as well as exempted service (trading activity of rubber product) from Unit No. 67; all the invoices are raised from Unit No. 65 irrespective of whether services are provided from Unit No. 65 or 67 - denial of credit of service tax paid on renting of immovable property service relating to Unit No. 67 cannot be sustained merely for the reason that separate service tax registration was not obtained for the said premise.
Further, Once the department acknowledged that services rendered from the premises No. 67 are both taxable and exempted service and demanded reversal of proportionate cenvat credit attributable to said exempted service, denial of credit on the input service i.e. Renting of Immovable Property sounds contradictory; hence cannot be sustained.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 312 - CESTAT MUMBAI
CENVAT Credit - reversal of proportionate credit - Banking and other Financial Services - input service - Cash Credit/ Over Draft (CC/OD) services - whether the said service is exempt or not? - demand of Interest - time limitation - penalty - Doctrine of pith and substance.
Held that:- It is quite evident that the actual consideration for the CC/OD services is only higher interest rate and nothing else - Since the entire consideration received against the CC/OD services is in nature of interest, the said services provided by them to their customer are exempt from payment of service tax under Notification No 29/2004-ST dated 22nd September 2004 - Since in respect of these services the entire consideration received from the customer is exempt from payment of service tax these services would definitely be covered by the definition of exempt service as provided by this rule.
Doctrine of pith and substance - Held that:- Applying the same doctrine for ascertain the true nature of exemption provided by the said notification, the interest is not only the major component but is the only component for providing the said CC/OD services. What so ever minor amounts appellants may have charged towards the administrative fees etc., will not in fact change the nature of exemption provided to the said services - by exempting the value equivalent to interest recovered for providing these services, in fact, in pith and substance exemption has been granted to the services of CC/OD provided by Banking and Financial Companies.
Since, the CC/OD services provided by the appellant are exempt from payment of service tax to the extent of interest recovered, the view of Commissioner in including the quantum of interest recovered against the provision of said services for determination of the amount to be reversed in term of Rule 6(3A)(c) of the CENVAT Credit Rules, 2004 cannot be faulted with.
Time Limitation - Held that:- It is difficult at this stage, to ascertain whether all the facts in relation to these services and all facts including availment of CENVAT credit and its reversal as per rule 6(3A)(c) of the CENVAT Credit Rules, 2004 were disclosed is a question of fact which cannot be ascertained by us at this moment. Commissioner has also not recorded a specific finding in this regard in his order. In the interest of justice, therefore, the appellant be allowed a fair chance to present these evidences and be subjected to scrutiny/verification by the Department - matter remanded for re-determination of issue on limitation.
Demand of Interest and penalty - Held that:- Since the matter have been remanded for re-determination of issue on limitation, there should be no hesitation in holding that interest under section 75 shall be recoverable on the amounts finally determined - Penalty also needs to be re-determined after determining the issue on limitation.
Appeal allowed by way of remand.
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2018 (9) TMI 295 - CESTAT CHENNAI
CENVAT Credit - input services - Department was of the view that the credit availed on the above input services is not eligible for the reason that the said input services are not used for providing output services - Scope of SCN - Held that:- In the instant case, what is alleged in the show cause notice is that as per Rule 2(l) of the CENVAT Credit Rules, 2004, input service means ‘any service used for providing output service’. As trading activity undertaken by the appellant is not taxable service, hence the appellant is not eligible to avail credit on the alleged / impugned input service. This being so, the appellants have clearly fallen foul of Rule 3 of the CENVAT Credit Rules, 2004 since that is the particular provision which lays down the types of duties or taxes or cesses suffered on input, input services etc. which alone can be availed as CENVAT credit.
In the present case, only Rule 3 and Rule 6 has not been invoked. When credit is not admissible under Rule 3, the appellant cannot content that Rule 6 ought to have invoked and that trading is held to be exempted service prior to 1.4.2011. The appellant cannot blow both hot and cold.
Wrong utilization of CENVAT credit - Demand of ₹ 35,91,928/- with interest - Held that:- Since this being only a part of the total credit amount of ₹ 3,22,07,534/-, the demand of which has already been upheld, it would cause double jeopardy, hence demand of ₹ 35,91,928/-, along with interest, will become a unjustifiable demand and therefore set aside.
Penalty u/s 78 - Held that:- This issue involves interpretation whether the availment of impugned credits are in order or otherwise - penalties not warranted and is set aside.
The impugned order is modified to the extent of setting aside the demand of ₹ 35,91,928/- and the penalty imposed under section78 of the Finance Act, 1994 without disturbing the remaining part of the impugned order except penalty - appeal allowed in part.
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2018 (9) TMI 263 - SC ORDER
Reverse charge mechanism - Tour operator services - respondent performed part of their service outside - export of services or not? - Held that:- Leave granted - To be heard along with Civil Appeal No. 4285 of 2016.
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2018 (9) TMI 262 - MADRAS HIGH COURT
Extended period of limitation - penalty - non registration, non payment and non filing of returns - bonafide belief - no suppression of facts - Whether the Department was justified in invoking the extended period of limitation and also imposing penalty?
Held that:- In the instant case, there was no allegation of fraud or suppression or wilful mis-statement against the assessee. The Department, even in the said SCN, stated that the assessee was liable to pay service tax and get himself registered from the year 2007-08 whereas he got himself registered only in the year 2012.
The law on the subject as to whether the extended period of limitation could have been invoked when there were two views within the Department itself i.e. when certain Original Authorities hold that the services are taxable services and certain Appellate Authorities hold otherwise - When there is scope for doubt in the mind of the assessee on a particular issue, the longer period under the Proviso to Section 11A of the Central Excise Act, 1944 cannot be invoked.
Extended period cannot be invoked - Appeal dismissed - decided against Revenue.
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2018 (9) TMI 261 - KARNATAKA HIGH COURT
Liability of Interest - short payment and belated payment of such duty - Held that:- The issue is still pending before the larger Bench and is yet to be considered by the larger Bench - In the interregnum the appellant has already paid the duty and interest demanded by the department-respondent.
The appeal could be disposed of by reserving liberty to the appellant to approach the department for appropriate relief including refund after the consideration and disposal of the issue by the larger Bench - appeal disposed off.
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2018 (9) TMI 260 - CESTAT ALLAHABAD
Man Power recruitment or Supply Agency services - it was alleged that the appellant suppressed taxable value and short paid service tax for the period from 2009-10 to 2011-12 - Principles of Natural Justice - Held that:- The Original Authority did not take into consideration any defence by the appellant. The impugned order is passed in violation of principles of natural justice.
Matter remanded to the Original Authority with a direction to offer the opportunity of submission of defence reply and subsequent to the same offer the opportunity of personal hearing to the appellant - appeal allowed by way of remand.
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2018 (9) TMI 259 - CESTAT BANGALORE
Real Estate Agent Services - Non-discharge of Service Tax - Managing projects of M/s. Mckino & M/s. Axa Business - Assignment & transfer income - Assessment & bifurcation fees Khata transfer fees - Forfeiture of amounts received - Held that:- On going through the agreement between the appellants as a real estate developers and prospective buyers, it is found that the contract is on a principal to principal basis - the amounts received by the appellants in respect of 3 activities undertaken by them i.e. ‘assignment transfer income’, assessment and bifurcation fees, ‘Khata transfer fees’ and ‘forfeiture’ amounts find their origin in the agreement with prospect to buyers in which the appellants are developers only and are not workings as real estate agents - the activity undertaken by them is not in the capacity of a real estate agent but undertaken as real estate developers - demand set aside.
In the case of Ansal Properties and Infrastructure Ltd. [2017 (9) TMI 1071 - CESTAT NEW DELHI] it was held that demand pertaining to consideration received for change of name for flat owners by way of substitution new buyers name with the earlier flat owners is not chargeable to Service Tax.
Management of construction of projects - Held that:- The appellants have been supervising the construction projects of M/s. Mckino & M/s. Axa Business Services - their role was to supervise the construction and if the contractor fails to meet the expectations of their principals to undertake the construction themselves therefore, it is not a mere advice ‘consultancy or technical assistance’ in respect of ‘management of real estate’ - no Service Tax can be demanded from the appellants on this count under the head ‘Real Estate Agent Service’ - demand set aside.
The demands pertaining to the services are set aside along with interest and penalties - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 258 - CESTAT BANGALORE
Refund of service tax - Input services - denial of credit on the ground that certain input services are not covered by the definition of input services and also on the ground of nonsubmission of documents required to process the claim - Held that:- The Order-in-Original as well as impugned order, both have rejected the refund claims on other grounds which are not taken in the show-cause notices and therefore they have travelled beyond the showcause notices which is not legally permissible - further, the impugned order also violates the principles of natural justice because the appellant has not been given the reasonable opportunity to defend himself on the ground on which the refund claims have been rejected.
Denial of refund on the ground that the appellant has not produced the approved list of specified input services from the UAC of SEZ - Held that:- Keeping in view the intention of the Government in enacting the SEZ Act and giving special fiscal concessions to SEZs, It is held that this is only a procedural and is not a mandatory condition as held by the Commissioner(Appeals) - this ground on the basis of which refund claims have been rejected is not tenable.
CENVAT Credit - rejection on the ground that appellant has availed the cenvat credit and hence he is not entitled to file the refund claim - Held that:- The appellant has already reversed the CENVAT credit without any utilization and it has been shown in ST-3 return filed for the period April 2015 to September 2015 and once he has reversed the CENVAT credit without utilization, it tantamounts to not taking credit - refund allowed.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 257 - CESTAT MUMBAI
Penalty under Section 76 of the Finance Act, 1994 - the appellant did not discharge its tax liability within stipulated time frame and the same was deposited into the Government exchequer subsequently, but before the issuance of SCN - Held that:- The issue arising out of the present dispute regarding the imposition of penalty under Section 76 of the Act under similar set of facts, is no more res integra, in view of the decision of this Tribunal in the case of Virtual Marketing (India) Pvt Ltd. [2016 (11) TMI 18 - CESTAT MUMBAI], where under similar set of facts and circumstances, by invoking the provisions of Section 80 of the Act, the Tribunal has set aside the penalties imposed on the appellant therein - penalty set aside - appeal allowed - decided in favor of appellant.
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