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Service Tax - Case Laws
Showing 1 to 20 of 262 Records
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2014 (12) TMI 1420
Non-payment of service tax - appellants had supplied labour but did not pay service tax under manpower recruitment or supply agency service - Extended period of limitation - HELD THAT:- As per the agreement the appellants were being paid for operating the mill @ Rs. 160/- PMT of the quantity of gods produced, It is thus evident that the payment was based on production as a result of operation of the mull. Under Section 65(68) of the Finance Act, 1994 manpower recruitment or supply agency means “any person engaged in providing any service directly or Indirectly in any manner tor recruitment or supply of manpower temporary or otherwise, in any manner” It is evident that the activity rendered by the appellants does not fall in the said definition inasmuch as they did not supply any manpower to any other person and merely engaged the manpower themselves to operate the mill and. got paid on the basis of production on per metric ton basis It also comes out that the activity done by them amounted to manufacture.
Extended period of limitation - extended period has been invoked on the ground that the appellants had never disclosed these facts and non-payment of service tax which came to notice of the department only at the time of audit and thus the appellants had intentionally not paid service tax with indent to evade the same - HELD THAT:- It is thus evident that mere son-payment of ‘service tax has been ipso fact equated with the Intention to evade which, as is too well settled to need citing of precedent, is legally unsustainable.
In the case of the Rameshchandra C. Patel CST, Ahmedabad [2011 (11) TMI 415 - CESTAT, AHMEDABAD] it was held that the Agreement between parties talking about products to be manufactured sad payments to be made. and silent about number of men or labour to be used or manner in which they have to be used or quantum of payment to be made to them would not be covered under manpower recruitment or supply agency service.
The requirement of pre-deposit is waived - appeal allowed.
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2014 (12) TMI 1417
Refund claim - telecommunication service to international roamers - Export of service - HELD THAT;- The delay is condoned - appeal admitted.
Tag with S.L.P. (C) No. 29712 of 2014.
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2014 (12) TMI 1349
Recovery of service tax - Section 73 (1) of the Finance Act, 1994 - suppression of facts - HELD THAT:- The finding of fact is based on a proper appreciation of the material on record and since no material was placed by the appellant – Department to show that there was suppression of facts by the respondent – Agency, the Tribunal rightly held that the appellant Department was not liable to levy the service tax for a period extending one year - Since none of the ingredients mentioned in the proviso to Section 73 of the Act applied to the facts of the case, the Tribunal rightly found that the imposition of penalty on the respondent was not justified as penalty could be levied under Section 78 of the Act, only if either of the five ingredients in the proviso to Sub Section 1 of Section 73 of the Act, which are also the ingredients mentioned in Section 78 of the Act for imposition of penalty, were satisfied.
Since the finding recorded by the Tribunal does not give rise to any substantial question of law, the appeal is dismissed with no order as to costs.
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2014 (12) TMI 1309
Direction to grant refund which has been allowed by the Commissioner of Central Excise (Appeals) by virtue of his order dated 29.01.2014 - interest on delayed refund - Held that: - order was passed on 29.01.2014. Till date the verification process has not been completed. The petitioner had written to the respondents for granting the refund yet that has not been done - we are disposing of this writ petition with the direction that the concerned Assistant Commissioner of Service Tax shall complete the verification of the relevant documents and sanction the refund claimed by the petitioner within a period of four weeks from today provided there is no stay order granted by the said Tribunal - petition disposed off.
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2014 (12) TMI 1306
Pre-deposit - building construction activity for educational institution - Held that: - Considering such aspect and also interest of revenue, as an interim measure, the appellant is directed to deposit ₹ 12,00,000/- and report compliance on 30.1.2015.
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2014 (12) TMI 1290
Extension of stay order - automatically vacation of stay order after one year - recovery of dues - the decision in the case of M/s. Chhote Lal Virendra Kumar Jain Versus Union of India & Others [2014 (5) TMI 262 - RAJASTHAN HIGH COURT] contested, where it was held that it is the settled principles of law and which is consistent and recognized that where a case is not considered because of multiplicity of business of the Court the party ought not to be prejudiced by that delay and when an act of the Court can prejudice no man, ditto would be for an omission in keeping with the aforesaid principles that if the matter has not been taken up for consideration on a given date at least the litigant cannot be left to suffer for suchreason over which he has no control - Held that: - the decision in the above case upheld - appeal dismissed.
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2014 (12) TMI 1285
Valuation - includibility - whether the free supplies of material provided by the service recipient to the appellant is includible in the taxable value of the service provided by the appellant or not? - Held that: - similar issue decided in the case of Bhayana Builders Pvt. Ltd. v. CST, Delhi [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] wherein this Tribunal held that the free supplies of raw material by service recipient is not includible in the taxable value of services - the free supplies by the service recipient is not includible in the taxable services provided by the appellants - appeal allowed - decided in favor of appellant.
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2014 (12) TMI 1241
Valuation - determination of amount and time when the consideration was received - Construction of Residential Complex Service - Service tax of ₹ 2,27,94,428/- with interest has been demanded from the appellant on the ground that the amount collected from the buyers towards ‘Undivided Share of Land’ can be taken as consideration attributable to the land owners under the Joint Development Agreement and be subjected to service tax - Held that:- As per Notification No. 36/2010-S.T. dated 28.6.2010, in respect of new services introduced by Budget 2010, if value towards any service has been received before 1.7.2010, service tax on such value is exempted.
In this case, the agreement was entered into on 26.4.2010 and on that date the land was handed over, it can be said that consideration of construction of residential complex was received by the appellant on that date.
We also find that the submissions of learned counsel that no monetary consideration was agreed with the land owner and the appellant as per the JDA and therefore, consideration is not ascertainable has also some force. Once consideration is not ascertainable, valuation has to be done as per Section 67 read with Service Tax (Determination of Valuation) Rules, 2006. However, only with effect from 1.7.2012, Rule 3 covered cases where ‘value is not ascertainable’ and prior to this period, it only covered cases ‘where such value is not wholly or partly consisting of money’. - Prima facie case is in favor of assessee - stay granted.
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2014 (12) TMI 1235
Liability of Service tax - Management Consultancy Service - Whether the running, operating and managing the entire hotel business of M/s. Taj Lands End Ltd., Bandra under a ‘License Agreement’, from the date of agreements up to completion of final purchase of the hotel, would be covered under ‘Management Consultancy Service’ and service tax would be payable on the quantum of Gross Operation Profits earned/retained by the appellants or not.
Held that:- the contention of the appellant is convincing that IHCL had entered into a License Agreement with LHPL (later the name of LHPL was changed to Taj Lands End Ltd.) to the effect that the hotel which stood in the name of LHPL was given to IHCL on a license basis to enable the latter to run the hotel on its own. So, although the owner of asset is LHPL, whereas the owner of business of running the hotel is IHCL. Service can be said to be provided by one entity to another only when the first entity undertakes an activity or performs a service for another for a consideration. From the Agreements, it does not appear that IHCL was running the hotel as a service to LHPL. In fact IHCL was part owner of the asset, i.e., LHPL, the remaining part owner being ICICI I-Venture who had parted with a huge loan of ₹ 330 crores which was primarily utilized to repay the existing debt of LHPL. If IHCL was part owner of LHPL, it can hardly be said that IHCL was providing service to itself to the extent of its ownership of LHPL. The other owner, i.e., I-Venture was essentially a lender who was eased out of the ownership in 2006. Thus there is sufficient evidence to show that IHCL was running the hotel on its own and was not doing any service for another entity.
Therefore, it is clear that the IHCL are running the hotel and are not providing consultancy as mere holding of joint discussions between two entities does not mean that one entity is providing service to the other. Also the agreement states unambiguously that, for mutual benefit, IHCL shall run, develop, conduct, operate manage …. carry out all activities of running the hotel. The activities of IHCL in operating the hotel cannot be called as a service rendered under the category of Management Consultancy service results in no service tax payable.
Invokation of extended period of limitation - Held that:- by relying on the decision of Tribunal in the case of I2IT Pvt. Ltd. v. Commissioner of Central Excise, Mumbai [2014 (9) TMI 345 - CESTAT MUMBAI], the extended time period is not invokable once mens rea is not established.
Imposition of penalties - Section 76 & 77 of the Finance Act, 1994 - Held that:- Penalty is not imposable as there is no mens rea on the part of IHCL. - Matter remanded back
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2014 (12) TMI 1234
Rejection of refund claim - SEZ unit - Refund claim rejected on 3 issues, (1) deficiency in invoices (2) the objection that the impugned service is not mentioned in the authorisation issued by the Unit Approval Committee of the SEZ unit (3) that the assessee has not provided basis for payment of service tax along with the evidence of tax payment for which the refund is being claimed.
Held that:- with respect to deficiency noted in the invoice, it is observed that the said invoices are issued by the vendor located outside India, who is not required to follow the procedure prescribed under the Service Tax Rules, 1994. Mere technical discrepancies in the invoices cannot be the ground for denying substantive benefit of refund available to an SEZ unit. It is the policy of the Government to exempt or refund the input taxes incurred by the SEZ Unit. Keeping this policy of the Government in mind and specifically in the light of sections 7 and section 51 of the SEZ Act, 2005, denial of refund claim on this ground is not sustainable.
With respect to the second objection, it is found that the Appellant has produced the authorisation dated 05 October 2009 in which at serial no. 27 Business Support Service is specifically mentioned. It is also found from the GAR 7 challan enclosed to the Appeal that service tax was paid by the Appellant under the accounting code 00440366 which is the accounting code for depositing service tax under Business Support Service category. When the Revenue has accepted service tax payment made by the Appellant under the accounting code of Business Support Service, and when the Business Support Service is included in the authorisation dated 05 October 2009 granted by the Unit Approval Committee, the objection on this count is also not tenable.
With regard to the third objection of reconciliation of service tax payment with evidence of challans, it is found that the same was produced before the lower authority and also before me and the same is satisfactory. - Decided in favour of appellant with consequential relief
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2014 (12) TMI 1215
Extended period of limitation - Condonation of delay - Appellant filed appeal after the prescribed time limit of two months but within the further period of one month which can be condoned by the Commissioner (Appeals) as per Section 85(3A) of the Finance Act, 1994 - Held that: As per the decision of Hon'ble Supreme Court in the case of Singh Enterprises vs. CCE, Jamshedpur 2007 (12) TMI 11 - SUPREME COURT OF INDIA, Commissioner (Appeals) has no power to condone the delay beyond the prescribed period. Therefore,delay cannot be condoned by Commissioner (Appeals). - Decided against the petitioner
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2014 (12) TMI 1206
Waiver of pre-deposit - Renting of Immovable Property - Following the judicial discipline and consistency, as directed in previous cases of municipal corporations and also keeping in view the principle laid down by the Apex court, this appellant is directed to make a further deposit of ₹ 40,00,000/- (Rupees forty lakhs only), subject to verification of ₹ 51 lakhs said to have been deposited - stay granted partly.
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2014 (12) TMI 1197
Restoration of appeal - non receipt of notice - Held that:- As prior to 21-2-2014, this matter had been listed for hearing on 20-12-2013 and at that time this matter had been adjourned to 21-2-2014 and the notice in this regard had been issued by Registered post with acknowledgement due on 17-1-2014. There is no document on record to indicate that the notice was not delivered by the postal authorities and was returned undelivered. Once notice for hearing has been issued to an appellant by RPAD in accordance with the provisions of Section 37C of the Central Excise Act 1944, it has to be presumed that the notice has been received by the appellant and if the appellant disputes the receipt of the notice, burden is on him to produce positive evidence regarding non-receipt. Since no such evidence has been produced, the appellant’s plea that the notice was not received cannot be accepted. In view of this, miscellaneous application for restoration of appeal is dismissed.
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2014 (12) TMI 1186
Waiver of pre-deposit - Valuation - re-imbursement expenses - Manpower Recruitment or Supply Agency services - applicant is not paying service tax on their gross amount received from the service recipient. - Held that:- the applicant is providing service to the client on principal to principal basis. In these circumstances, the applicant is required to pay service tax on the gross amount received for the services provided by them. Further, the applicant has non-informed the value of services provided by it. Therefore, we are of the view that the Department has invoked the extended period of limitation. - prima facie case is against the assessee - 50% stay granted.
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2014 (12) TMI 1165
Waiver of pre deposit - Intellectual Property Right service - Penalty u/s 77 & 78 - Held that:- No element of temporality, either in inherence of title in the technical drawings in favour of the petitioner nor in the period for which the petitioner may beneficially use the know-how pursuant to the permanent transfer of technical drawings nor in the extent of the rights to use the technical know-how is evident. The agreement clearly and exclusively transfers permanently the technical drawings. Therefore, the transaction prima facie falls more appropriately within the ambit of sub-clause (a) of Section 65(66b) of the Act but is excluded therefrom in view of exclusion of permanent transfers from the ambit of the sub-clause. - On a prima facie construction of the terms of the agreement read as a whole and a holistic construction of its conditions and covenants, the conclusion is compelling that there is a permanent transfer of intangible goods, from the Swedish entity to the petitioner. Therefore the transaction falls outside the ambit of Section 65(55b)(a) of the Finance Act, 1994, since only a temporary transfer of Intellectual Property is comprehended within the meaning of sub-clause (a) i.e., Intellectual Property Right and the agreement between the parties discloses not a temporary but a permanent transfer. - Strong prima facie case in favour of the appellant - Stay granted.
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2014 (12) TMI 1164
Penalty u/s 76, 77 & 78 - Suppression of facts - Bonafide belief - Renting of immovable property - Management, maintenance or repair services - whether penal action is invited under Section 76 and Section 78 of the Finance Act, 1994 - Held that:- Appellants have deposited Service Tax on being pointed out by the department. Regarding payment of Service Tax on rendering service of renting of immovable property, they expressed that they had bona fide belief that tax was not payable as Hon’ble Delhi High Court [2009 (4) TMI 14 - DELHI HIGH COURT] has stayed the provisions. It was through retrospective amendment only, tax was made applicable - appellants has made case for waiver of penalty in respect of service of renting of immovable property. However relating to failure to deposit of Service Tax in respect of Management, maintenance or repair services, no justification has come forward as it came out that levy of Service Tax was there w.e.f. 2001. However neither tax was paid nor information relating to disclosure of the availment of the credit in excess was mentioned in returns. Hon’ble High Court of Rajasthan’s judgment [2012 (11) TMI 955 - RAJASTHAN HIGH COURT] squarely fits into the facts of present case of suppression which is willful. - Decided partly in favour of assessee.
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2014 (12) TMI 1142
Condonation of delay - Inordinate delay of 175 days - Held that:- Tribunal has committed an error by rejecting the application filed by the petitioner for condonation of delay caused in filing the appeal and also committed an error by not considering the grounds set out in paragraph nos. 2 and 3. In paragraph nos. 2 and 3 of the application for condonation of delay, the applicants have shown sufficient cause for not preferring the appeal within the limitation period. Thus we are of the considered opinion that sufficient cause is shown by the original appellants applicants in the application for condonation of delay. Even otherwise, opportunity is required to be given to the petitioners to submit their case on merits before the Appellate Tribunal. - Order passed by the Tribunal is hereby quashed and set aside - Decided in favour of assesse.
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2014 (12) TMI 1141
Valuation - Telephone connection service - telegraph authority - The respondent appointed M/s. Reliance Industries Ltd. (RIL) as an agent to market the TRAI approved Tariff Plans with respect to telephone connections services provided by it by means of various schemes floated by the agent in this regard. - These services were provided through Code Division Multiple Access (CDMA) technology and could be availed by the subscribers only on a handset specially programmed and designed. - the agent of the respondent (i.e. M/s. RIL) was allowed to combine certain products, services and privileges offered by it. - Other than an amount of ₹ 14,400/- per subscriber, which was for rental and usage charges of telephone connection service, all other charges collected by the agent from the subscribers of the respondent were retained by the agent as 'club membership' and 'club privileges' charges. - Inclusion of amounts collected from its subscribers towards 'club membership' and 'club privileges' charges in value of taxable services.
Held that:- any service which has not been provided by telegraph authority and that have no relationship with connecting telephone apparatus is not covered under telephone connection service. In this case allegation against the respondent is that through their agent, they have provided additional service such as club membership and pioneer offer. The Revenue wants to include the value of club membership and club privilege charges in the value of service relating to telephone connection.
All the goods and services provided by the agents of the respondent are the goods and services that have been provided by a person other than the telegraph authority, hence one of the conditions of the definition of service of telephone connection is not fulfilled. On this ground alone the attempt to include the value of 'club membership' and 'club privileges' gets defeated.
Inclusion of charges on account of Deceptive advertisements practice - Held that:- The privilege at point (b) is one relating to the service of the telephone connection but its value had always been included in the value of the service provided by the respondent. The agents of the respondent were remitting ₹ 14,400/- per subscriber to the respondent. This amount was towards rent and usage charge of ₹ 400/- per month for 36 months. Out of the amount ₹ 400/-, an amount of ₹ 240/- was the rent of the service provided by the respondent and ₹ 160/- was towards the usage charges. Showing a paid service as a privilege of the DAP Club could at the worst be an alluring and illusory advertisement. Such an advertisement cannot change the real character of the service. The privilege at point (iii) free incoming calls, free unlimited SMS, free CLIP & call waiting service was also the part of Tariff Plan of the respondent. The agents of the respondent had shown it separately as a privilege of the DAP Club but it was part of the approved Tariff Plan of the respondent. The remedy against the deceptive advertisements is not under the Act. - Decided against Revenue.
Inclusion of value of telephone instrument - Held that:- The services relating to providing of the service of telephone connection is not only a transaction for providing a service but also involves sale of goods. - the allegation is that the handset is so designed that without it the service provided by the respondent could not have been be availed by their subscribers. The value of the telephone handset is discernable in this case and the sale tax has also been levied on such transactions. Inadequacy of the value on which the sale tax has been imposed cannot be the ground for inclusion of the value of goods in the value of the service. - Decided against Revenue.
Whether the amount of goods and services can be vivisected - Held that:- The agents have paid sale tax on the value declared by them in relation to the supply of goods. The remaining amounts are either for collection charges for financing of the scheme or for the privileges or services provided to the members of the DAP Club. In such a scenario, it is not correct to say that the transactions under which he agents sold the Tariff Plans along with their own goods and services cannot be vivisected and the entire value of such goods and services be added to the value of the services of the respondent. - Decided against Revenue.
Whether the respondents are liable to pay penalty on account of due service tax collected from the subscriber on fixed wireless service by way of adjustment from the security deposits. - Following decision of CCE & ST., LTU, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. reported in [2011 (9) TMI 114 - KARNATAKA HIGH COURT] - as entire amount of service tax and interest has been paid by the respondent before issuance of the show cause notice on pointing out by the revenue, the penalty are not imposable. - Decided against Revenue.
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2014 (12) TMI 1140
Condonation of delay - Delay in receipt of order - Held that:- It is seen that though in respect of the order-in-original dated 15.02.2008, the department’s plea is that the same had been delivered to Shri Ramesh Kumar of the appellant company on 26.03.2009, no evidence in this regard, has been brought on record. Similarly, in respect of the order-in-original dated 13.03.2009, the department s plea is that the same was dispatched to the appellant by speed post on 26.07.2012. However, under Section 37 C of the Central Excise Act, 1944, the permitted mode of communication of the adjudication order is registered post with acknowledgement due (RPAD) and since the order was not dispatched by RPAD, it cannot be deemed to have been served on the appellant. Both these orders have been received by the appellant on 2.3.2013 and, therefore, the appeals have to be treated as having been filed in time and as such, the impugned order dismissing the appeals as time barred, without going into the merits of the case, is not correct. The impugned order, therefore, is set aside and both these matters are remanded to the Commissioner (Appeals) for decision on merits. - Delay condoned.
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2014 (12) TMI 1139
Denial of CENVAT Credit - Manpower supply service - cleaning of the yard within the factory - weighment of sugar cane - cane area survey and sugar can development - Held that:- As regards cleaning of the yard within the factory, as per the provisions of the factories act provision of Section 11 of the Factories Act it is the responsibility of a manufacturer to keep the factory premises neat and clean, therefore, the cleaning of the factory has to be treated as activity in or in relation to manufacture of the final product. Therefore, the Cenvat credit in respect of this activity would be admissible. - As regards the weighment of sugar cane and its unloading at the factory, this activity has to be treated as activity in relation to manufacture of sugar and molasses. Therefore, I hold that Cenvat credit would be admissible in respect of this activity also and the same has been wrongly denied.
As regards the cane area survey and sugar can development by educating the farmers and by other means, the purpose of this activity is to ensure supply of good quality sugar cane, which is a must for any sugar manufacturing business. In view of this, this activity has to be treated as having nexus with manufacturing business of the appellant - question of eligibility for Cenvat credit of the activities of sugar cane area survey and sugar cane development has to be seen on the basis as to whether these activities have nexus with the business of manufacture of sugar. In my view, while these activities may not have nexus with manufacture of sugar, these activities certainly have nexus with the business of manufacture of sugar, as the supply of good quality sugar cane with good sugar recovery is a must for the business of manufacture of sugar. Therefore, I hold that the Cenvat credit in respect of these activities would be admissible.
Any expenditure incurred by a manufacturer is deemed to be included in the price charged by him from his customers and therefore the manufacture is not required to prove that the expenses incurred by him on various inputs and input services used in the manufacture of the final product has been included in the price charged by him. - the impugned order is not sustainable - Decided in favour of assessee.
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