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Service Tax - Case Laws
Showing 241 to 260 of 2349 Records
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2014 (12) TMI 125
Waiver of pre-deposit - Period of limitation - Section 73(1) - Held that:- Reading of the Section 73(1) clearly indicates under what circumstances period of one year limitation could be considered and when period of five years has to be read instead of one year. Without referring to what exactly was the case of the appellant, so far as issue of limitation is concerned, the Tribunal proceeded to opine in one line that the demand is not time barred as contended by the appellant. As a matter of fact, the appellant also raised a contention that no prima facie case as shown in the show cause notice was forthcoming. If once the Tribunal decides the limitation issue, even if the demand is in order, then the department may not be entitled to collect the amount of service tax and then further impose any penalty. Therefore, the issue of limitation as provided under Section 73 read with the proviso is very relevant and unfortunately, nothing is said about this aspect of the matter in the impugned order. Accordingly, we set aside the order dated 19-8-2013 directing the Tribunal to consider Section 73 of the Finance Act with reference to the date of demand and other relevant facts so far as the present case is concerned and then proceed with the conditional order of stay or otherwise. - Decided in favour of assessee.
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2014 (12) TMI 124
Waiver of pre deposit - Held that:- Petitioner had submitted that the petitioner would comply with the conditions imposed by the second respondent Tribunal, by its order, dated 23-6-2006, made in Stay Order [2006 (6) TMI 498 - CESTAT CHENNAI], within the period specified by this Court. In such circumstances, the second respondent Tribunal may be directed to take on file the appeal filed by the petitioner, in [2013 (11) TMI 1258 - CESTAT CHENNAI] and dispose of the same, on merits and in accordance with law, on the petitioner complying with the conditions imposed by the second respondent Tribunal while granting the stay order, on 23-6-2006. - Writ disposed of.
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2014 (12) TMI 123
CENVAT Credit - Whether the Tribunal below committed substantial error of law in holding that the respondent had paid service tax on ‘input service’ by way of utilization of cenvat credit despite the fact that as per Rule 3(4)(e) of the Cenvat Credit Rules, 2004, the utilization of payment of service tax is available on output service - Held that:- appellant has placed reliance on the instructions of the Board dated 3-10-2005, which has clarified Section 68(2) of the Finance Act, 1994. These instructions of the Board are not relevant for the purpose of deciding this Tax Appeal. For the aforesaid reasons, no substantial question of law arises - Decided against Revenue.
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2014 (12) TMI 122
Waiver of pre deposit - Invocation of extended period of limitation - Interest u/s 75 - Penalty u/s 78 - Held that:- Discretion exercised by the appellate authority in passing the inter-locutory order does not suffer from any legal infirmity warranting interference of this Court. The claim made by the petitioner before the Commissioner (Appeals) has not been substantiated so far. The documents in support of the claim are yet to be co-related to the duty which might have been paid by the petitioner’s corporate office, transporter or vendor. The aforesaid documents are yet to be produced before the Appellate Authority. There is no document on the record for us to presume that the petitioner has discharged the liability through anyone else of paying service tax - Decided against assessee.
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2014 (12) TMI 121
Validity of levy of service tax on Money changing activity - Legality of valuation rules - conversion of foreign currency to Indian rupee - banking and other financial services - Export of service or not - amounts of foreign currency remitted to India - Held that:- The argument that sub-clause (iv) of clause (a) of sub-section (12) of Section 65 applies only to private “money changers” is to be rejected at the outset. There is no warrant for such assumption from the words employed in sub-clause (iv). It takes in securities and foreign exchange broking and purchase or sale of foreign currency, including money changing, whether such service be rendered by a private company or one exclusively dealing in money changing operations or a Bank; nationalised or otherwise, who is authorised to carry on such activity. The emphasis is on the service provided and the taxing event is also the service rendered. The provision does not distinguish establishments; nor confine the levy to those establishments exclusively conducting money changing operations. The contention raised, hence, has absolutely no legs to stand and is rejected.
The further contention is with respect to exemption provided to activities including transaction in money. Going by Explanation 2 of Section 66B(44), such exemption does not apply to conversion of currency from one form to another. Hence, no exemption can be claimed by the petitioner with respect to the service it receives, in so far as the respondent-Bank converts its foreign remittances to Indian currency. - This Court cannot confuse the remittance with the conversion, since both are distinct events and it is the latter that is the taxable event.
Valuation - legal validity of taking entire transaction value into consideration - Held that:- The petitioner is correct, in so far as accepting that the petitioner is liable to the tax on the charges [“commission” and “exchange”] levied by the respondent-Bank; which levy is made on the gross amount charged by the service provider by sub-clause (i) of Section 67(1) and that consideration is in terms of money. But such levy and collection, does not prevent the taxation authorities from looking into whether there is any other ostensible consideration for the service provided, which is not in terms of money or which is not ascertainable, in which event tax will have to be levied as prescribed in the rules.
The petitioner’s contention, hence, with respect to the tax being levied on the entire remittances has to be negatived. The entire remittance is taken, only for the purposes of valuation and that too the units of currency alone and the tax is levied only on that component, which the Bank stands to gain by purchasing the currency at a lower rate than the RBI reference rate. As per the illustration, 50 paise per US Dollar is the ostensible consideration received by the Bank for each dollar conversion and when 1000 Dollars are converted, the taxable value would be ₹ 500; 0.50 paise for each US Dollar. The petitioner’s contention on that count fails, since the prescription of the measure in the rules as sanctioned by the statute, is perfectly in consonance with the statutory provisions.
Legality of sub-rule (7B) of Rule 6 of the Rules of 1994, which provides for an option to pay service tax, in relation to the services provided on purchase or sale of foreign currency, including money changing - Held that:- This Court does not find any illegality in the levy of ‘service tax’ made and collected by the respondent-Bank on the services provided, of the conversion of foreign currency, to the petitioner. When the foreign currency is entitled to an exchange rate, in the market, as notified by the RBI, and a ‘money changer’ including a Bank involved in such activity purchases that foreign currency at a lower rate, then that difference is the ostensible consideration the service provider derives, which is not in terms of money but still determinable on its money equivalent. Whether it is actually received or not in terms of money; the rules prescribe a value determination on that consideration, to be expressed in terms of money, for the purpose of levy of service tax. No challenge on such determination can be sustained and the levy made is perfectly in consonance with the statute and the rules.
Writ petition dismissed - Decided against the assessee.
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2014 (12) TMI 117
CENVAT Credit - GTA - input services - Revenue is of the view that the shortage has occurred of inputs, consequently the input service credit was denied to the appellant - Held that:- There is no dispute on account of availment of CENVAT credit on inputs. When there is no dispute regarding receipt of inputs, therefore, whatever transportation has been paid by the appellant on Inward Transportation Service are entitled for input service credit. Further, the measurement Tolerance is on account of receipt of inputs and supply of finished goods. In these terms, it cannot be said the appellants have received the input in short quantity. Therefore, service tax on inward transportation is entitled as input service. Appellants have rightly taken the CENVAT credit on input service on Inward Transportation Service. Accordingly, impugned orders are set aside - Decided in favour of assessee.
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2014 (12) TMI 87
Club and Association Service - Business Exhibition Service - Penalty u/s 77 & 78 - Following decision of Federation of Indian Chambers of Commerce and Industry vs. CST [2014 (5) TMI 183 - CESTAT NEW DELHI], Sports Club of Gujarat Ltd. vs. Union of India [2013 (7) TMI 510 - GUJARAT HIGH COURT] and Ranchi Club Ltd. vs. CCE & ST, Ranchi Zone [2012 (6) TMI 636 - Jharkhand High Court] - service tax demand in respect of Club and Association Service alongwith penalty of equivalent amount under Section 78 is not sustainable and is set aside.
Levy of penalty in respect of Business Exhibition Service - Held that:- Since the appellant had paid the service tax of ₹ 2,12,011/- in respect of Business Exhibition Service even before the adjudication alongwith interest and since no option had been given in the adjudication order in terms of proviso to Section 78 of the Finance Act, 1994 to pay lower penalty by paying the same within a period of 30 days from the date of communication of order, in accordance with the judgment of Hon’ble Delhi High Court in the case of K.P. Pouches (P) Ltd. vs. Union of India (supra), the benefit of lower penalty in terms of proviso to Section 78 cannot be denied and accordingly the penalty under Section 78 is reduced to 25% of the service tax demand upheld - Penalty u/s 77 is reduced to ₹ 1000 - Decided partly in favour of assessee.
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2014 (12) TMI 86
Goods Transport Agency Service - Bar of limitation - Whether or not demand issued on 18.5.2005 for the period December 1997 to May 1998 in the case of GTA Services is within the period of limitation when read with Section 73 of Finance Act, 1994, Section 68 (1) and section 71A of the Finance Act, 1994 - Held that:- As per Hon'ble High Court of Gujarat decision in the case of CCE & Cus, Vadodara-1 vs. Eimco Elecon Limited (2010 (7) TMI 477 - GUJARAT HIGH COURT) on the same issue, the show cause notice dated 11.11.2004 for the period 16.7.1997 to 02.6.1998 was considered to be time barred. It is observed that Hon'ble High Court of Gujarat has passed the observation while holding that no short levy can be demanded from the Respondent in that case even after the retrospective amendment was brought into operation by the Revenue as per amendments carried out in Section 68(1) and Section 73 and addition of Section 71A of the Finance Act, 1994. - Decided in favour of assessee.
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2014 (12) TMI 85
Denial of refund claim - SEZ unit - Refund filed under Notification No. 41/2012-ST dated 29.06.2012 and notification no.52/2011-ST dated 31.12.2011 instead of Notification No.40/2012-ST dated 20.06.2012 - Held that:- Appellant have filed the refund claim under Notification no.41/2012-ST dated 29.06.2012/52/2012-ST dated 31.12.2011, the applicable notification is Notification no.40/2012-ST dated 20.06.2012, which is applicable in respect of the SEZ units and which provides for refund of the service tax paid on the services received by a SEZ unit or SEZ developer for use in or in relation to the authorized operations. Just because the appellant have mentioned the wrong exemption notification in their refund claim, the same cannot be rejected and as such, their refund claim must be considered in terms of the Notification no.40/2012-ST. The notification no.40/2012-ST is subject to certain conditions and according to the department, these conditions have not been fulfilled and that a letter dated 23.04.2013 mentioning the deficiencies had been issued to the appellant, but there was no response from the appellant. The appellant’s plea is that this letter was never received by them - Therefore, matter remanded back - Decided in favour of assessee.
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2014 (12) TMI 84
Waiver of pre deposit - Banking and Financial Service and Business Auxiliary Service - Dishonour of cheque - Penalty u/s 76 & 78 - Interest u/s 75 - Tribunal asked for pre deposit of 1 crore - Financial hardship - Held that:- As regards the financial hardship pleaded by the assessee, the affidavit filed before the Tribunal, really points out that the assessee had a huge loss of nearly ₹ 200 crores. In the circumstances, placing reliance on the balance sheet entries, the assessee sought for total dispensation of the pre-deposit. As far as this aspect is concerned, the Tribunal has exercised its discretion on this and considered the financial hardship. We do not find any justifiable ground to substitute our view on this. However, on the reference to Rule 5 before the Delhi High Court is concerned, which the Tribunal will consider in the dispute raised by the assessee, as against the order directing the assessee to deposit a sum of ₹ 1 crore, interest of justice would be met by directing the assessee to deposit a sum of ₹ 50 lakhs within a period of six weeks from today. We make it clear that the reference to the Delhi High Court [2012 (12) TMI 150 - DELHI HIGH COURT] would not stand in the way of the Tribunal considering the case of the assessee on merits. - Decided partly in favour of assessee.
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2014 (12) TMI 83
Waiver of pre-deposit - disallowance of Cenvat credit - various input services for construction of the airport and the passenger terminal building - Held that:- Contention of the petitioner that the demand made by the 2nd respondent by the Order-in-Original, dated 29-1-2010 is barred under Section 11A of the Act is the question which requires consideration in the main appeal pending before the Appellate Tribunal and therefore no finding as such can be recorded at this stage. So far as the waiver of pre-deposit as provided under the first proviso to Section 35F of the Act is concerned, it is the discretion that has to be exercised by the Appellate Tribunal subject to such conditions as it may deem fit to impose, so as to safeguard the interests of the revenue. Satisfaction of the Appellate Tribunal that the deposit of duty demanded would cause undue hardship to the appellant is the condition precedent for exercising the discretion so conferred under the first proviso to Section 35F of the Act. Demand stands reduced to ₹ 24,40,75,164/- after appropriating and adjusting the amounts reversed by the petitioner, we consider it appropriate to modify the condition imposed in the impugned order, dated 8-7-2013 and direct the petitioner to deposit 50% of demand - Partial stay granted.
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2014 (12) TMI 82
Waiver of pre deposit - Outdoor catering service - Held that:- Adjudicating authority whose order is in appeal before the Tribunal has not considered the appellant’s evidence in support of its claim that they are entitled to the benefit of Notification No. 12/2003-S.T., dated 20 June, 2003. The adjudicating authority was prima facie incorrect in law in holding that where outdoor catering service is provided no question of exemption in respect of food sold is available. Notification No. 12/2003-S.T., dated 20 June, 2003 does not exclude outdoor catering services from its purview. The Tribunal also in the impugned order does not consider the above aspect, after recording the same. Moreover the decision of the Tribunal in the matter of Rajeev Kumar Gupta (2009 (3) TMI 122 - CESTAT, NEW DELHI) prima facie seems to apply. Therefore, in the facts and circumstances of the case we are of the view that interest of justice would be served if the appellant is directed to make a pre-deposit the amount of ₹ 25 lakhs as against ₹ 50 lakhs ordered by the tribunal - stay order modified.
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2014 (12) TMI 81
Challenge to the inquiry notice / summon notice - Legality of order of the order passed by the ld. single judge bench dismissing the writ petition [2013 (8) TMI 749 - CALCUTTA HIGH COURT] - appellant subjected to exhaustive scrutiny with regard to its tax liability by the respondent as well as by CERA associated with the office of the Comptroller and Auditor General - Held that:- In the instant case, the subject matter of challenge are impugned summons issued by the authority from Kochi in the State of Kerala. Impugned summons have been received in Kolkata by the appellant company. Such fact is an incidental one and does not constitute an integral part of cause of action so as to vest jurisdiction in this Court.
It has been pleaded that the appellant-company had been subjected to alleged similar enquiries at the behest of respondent No. 3 and other authorities in Kolkata, we are of the considered view that in the factual matrix of the instant case as impugned summons had been issued by respondent No. 1 authority from Kochi and the appellant-company is required to respond to the same at Kochi also, the principle of forum conveniens, as aforesaid, would dissuade the Court from exercising its discretionary writ jurisdiction - Decided against assesee.
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2014 (12) TMI 43
Chartered accountants Services or Management consultancy Services - Whether the appellant is covered under the category of Management Consultancy Services for the services provided by him - Held that:- The appellant is a practicing Chartered accountant and has been registered with the authorities as such. We find that during the period prior to 1.8.2002, the Chartered Accountant services were liable to be taxed and Notification No. 59/98-ST dtd 16.8.1998 specifically exempted the taxable services provided by the practicing Chartered Accountant or a Company Secretary or a Cost Accountant; services which are rendered to a client other than taxable services which were enumerated in the said Notification. In our considered view, the interpretation put forth by the appellant of the said notification are acceptable, as the services which are in question in this case are not covered under the said Notification 59/98-ST till 1.8.2002.
The Tribunal has been holding that only services in the nature of providing consultancy or advices for improving the Management of a business entity only will be covered by the definition and not executory type of responsibilities of management got done through another agency. For example collection of bad debts is a responsibility of a Management. If somebody is engaged for collecting bad debts the person engaged cannot be considered to be providing Management or Business Consultancy Services. Though the definition at Section 65(65) includes any service in connection with management of any organization, the scope of the definition gets restricted to services in relation to consultancy as is evident from the name given to the service and commercial understanding of the expression ‘Management or Business Consultancy’. Impugned orders are unsustainable and liable to set aside and we do so - Following decision of Sridhar & Santhanam [2008 (12) TMI 104 - CESTAT CHENNAI] - Decided in favour of assessee.
Export of services - Held that:- Appellant has been taking a consistent plea before the lower authorities that the services rendered by them are in respect of the clients situated abroad are in the form of export of services. The said plea of the appellant was supported by documentary evidence of receipt of the amounts for consideration by the appellant’s bank in freely convertible foreign exchange and credited to the appellant s account in Indian Rupees. One such example which we find is in respect of an amount received by Union Bank of India and credited to the appellants account, was as per the direction of Netwest Bank which indicated a credit of amount in Pounds and converted into Indian Rupee, is sent to account of appellant in Union Bank of India. Services were rendered by the appellant to a person or a client situated abroad, in itself qualifies as export of service and the export of services are not taxable. In our considered view, appellant has made out a strong case in his favour in respect of non payment of service tax on the services which are exported - Decided in favour of assessee.
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2014 (12) TMI 42
Classification of service - business auxiliary service or manpower supply service - harvesting and transportation of sugarcane from the farmers’ fields to the sugar factory - Held that:- Tenor of the agreement is for the specific tasks of “harvesting of sugarcane and transportation of the same from the farmers’ fields to the sugar factory”. The agreement is not for supply of any manpower to the sugar factory. The consideration paid also has no nexus to the manpower employed. - As per Section 65(68) of Finance Act, 1994 ‘ “manpower recruitment or supply agency” means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise to any other person’ and the taxable service is defined under Section 65(105)(k) as “service rendered to any person by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner”. The appellants are not manpower recruitment agencies as they do not recruit any persons; they also do not supply manpower to the sugar factory. What they have undertaken is harvesting of sugarcane and transportation of the same to the sugar factory. To undertake this work, they have engaged labour/transport contractors who have undertaken the work of harvesting of sugarcane and transportation of the same. In any service activity, manpower is required. That does not make the service as supply of manpower.
From the statutory definitions and the contracts entered into by the appellants, it is clear that there is no element of manpower supply or recruitment by the appellants to the sugar factory and therefore, the services rendered by the appellants cannot be classified under manpower recruitment or supply agency services, by any stretch of imagination. It is also worth noting that the appellants do not undertake this work for anybody else except for the sugar factory concerned. In other words, they do not supply manpower to any customer who approaches them. Therefore, the impugned demands by classifying the activity under “manpower supply service” are not sustainable in law. Following the decisions of this Tribunal in the cases of Amrit Sanjivni Sugarcane Transport Co. Pvt. Ltd. [2013 (8) TMI 58 - CESTAT MUMBAI], Samarth Sevabhavi Trust [2013 (8) TMI 218 - CESTAT MUMBAI] and Bhogavati Janseva Trust & Others (2014 (9) TMI 482 - CESTAT MUMBAI) - Decided in favour of assessee.
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2014 (12) TMI 41
Demand of service tax on Reverse Charge Mechanism - amount remitted to the branch offices located outside India towards various expenditure and salaries paid to the employees working in the branch offices abroad - Extended period of limitation - Whether a service is provided and consumed outside India or has been consumed/ received in India - Held that:- From the interpretation made in the case of M/s. British Airways vs. CCE (Adj.) Delhi [2014 (6) TMI 626 - CESTAT NEW DELHI (LB)] it has to be seen in the present proceedings whether while procuring services branch offices of the appellant abroad have acted only in the capacity of ‘facilitators’ and the services so procured were consumed in India or the services so availed were consumed outside India.
Learned Senior Counsel appearing on behalf of the appellant relied upon guidelines of 2006 & 2008, issued by Organisation for Economic Co-operation and Development (OECD) Centre for Tax Policy & Administration, Paris; on Emerging concepts for Defining Place of Taxation on VAT/ GST to cross Border Trade in Services and Intangibles.
In the light of the emerging international concepts on reverse charge mechanisms and the judgment of M/s. British Airways vs. CCE [2014 (6) TMI 626 - CESTAT NEW DELHI (LB)], the foreign branches/ establishments of the appellant have not acted as ‘facilitators’ but have actually consumed those services abroad for which local VAT/GST of the respective country has been paid. The representative invoices produced by the appellant indicate that local VAT/GST paid is ‘Nil’ when billing by overseas service providers is directly raised upon the appellant in India on which service tax is paid by the appellant on reverse charge basis.
When billing is raised on the branch office for a service consumed abroad then local VAT/GST applicable abroad is paid by the branch offices on such transactions. Therefore, payment of local VAT abroad will be an indicator to decide whether a service is provided and consumed outside India or has been consumed/ received in India. The agreements/ documents available with the appellant have to be accepted for the purpose of determining place of providing and consumption of a service in India, as no foul play can be anticipated in the case of appellant who is paying thousand of crores of rupees as service tax and is also eligible to cenvat credit of the service tax payable on reverse charge basis. - demand set aside - Decided in favor of assessee.
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2014 (12) TMI 40
Imposition of penalty - Waiver of penalty u/s 80 -Held that:- As rightly pointed out on the side of the appellant/assessee, such opportunity has not been given by the Appellate Tribunal for coming to a conclusion as to whether the appellant/assessee is entitled to get such kind of benefit/exemption. Since sufficient opportunity has not been given for getting such kind of exemption, this Court is of the view to set aside the final order passed by the CESTAT and remit the matter to its file. - matter remanded back to tribunal.
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2014 (12) TMI 39
Waiver of pre deposit - Whether in the facts and circumstances of the case, the CESTAT is right in not considering the fact that the appellant’s bona fides are proved by the fact that the appellant had paid service tax on flats sold to third parties even prior to the introduction of explanation to Section 65(105)(zzzh) w.e.f. 1-7-2010 and therefore the benefit of waiver of pre-deposit ought to be given to the appellant - Held that:- As on the date when the application was disposed of on 31-12-2013, it was not the first hearing and the case was heard earlier. According to the assessee, the case was adjourned for the purpose of furnishing certain materials. However, the nature of such materials is not placed before this Court. Be that as it may the reason assigned for non-appearance on 31-12-2013, prima facie appears to be genuine in the absence of any rebuttal for the same. Considering the above fact and also the contention that the assessee has already paid a sum of ₹ 83,44,454/- out of the total demand, we deem it appropriate that the assessee should be given an opportunity to place all the materials before the Tribunal. It also appears that the Department representative who appeared before the Tribunal had not placed before the Tribunal, the amounts paid by the assessee prior to the issuance of the show cause notice as claimed by the assessee in the application seeking stay/waiver of pre-deposit. - Matter remanded back - Decided in favour of assessee.
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2014 (12) TMI 38
Challenge to the service tax inquiry - Levy of service tax on restaurants - Restaurants already subjected to sales tax - Held that:- If we read the language employed in Section 14 of the Act, then we can have a presumption without any doubt that the authorities have only issued summons intending to enquire into alleged evasion. Therefore, the petitioner will appear before the authority concerned to know what is the real intention of the issuing authority (sic) vis-a-vis its nexus and if the real intention of the issuing authority is to proceed against the petitioner as a proposed assessee or payee of evaded tax, obviously at that stage, the aforesaid judgment of the Kerala High Court [2013 (7) TMI 431 - KERALA HIGH COURT] would be absolutely relevant. Therefore, we think that at this stage, the petitioner shall go to the Officer concerned, who has issued the summons. The aforesaid judgment of the Kerala High Court shall also be placed by the petitioner before the Officer concerned, who must see the said judgment and take note of it and follow the same without any demur. This exercise shall be completed within a period of four weeks from the date of communication of the order. Till such date, no coercive measures shall be taken by the respondent-authorities. - Decided against the assessee.
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2014 (12) TMI 37
Waiver of pre deposit - Classification of services - business of packing parcels from parties in India handing to courier agencies - Business Support Service or not - Export of services - Held that:- It is to be noted that after the matter was remanded for de novo consideration, the appellant despite opportunity being granted, after 11 months after remand, despite reminders by the Adjudicating Authority, they were unable to produce any records except for certificates from M/s. United Business Xpress India Pvt. Ltd and Professional International Couriers Pvt. Ltd., but failed to produce copies of the agreements or terms of arrangement between the parties concerned or copies of the invoices or details of payment of service tax by the principal courier considering the certificates produced from M/s. United Business Xpress India Pvt. Ltd. and Professional International Couriers Pvt. Ltd., the adjudicating authority confirmed the demand. The Tribunal rightly rejected the plea of the appellant to look into those documents at interim stage as they could be looked into only at the time when the appeal is finally heard. In such circumstances, we do not find any error in the order of the Tribunal. Accordingly, the order of the Tribunal is confirmed. - Decided against assessee.
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