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Service Tax - Case Laws
Showing 261 to 280 of 2349 Records
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2014 (12) TMI 36
Challenge to the show cause notice invoking extended period of limitation - Renting of immovable property - Suppression of facts - Intention to evade tax - failure to comply with the requirements of the statutory provisions of the Finance Act, 1994 - Audit of accounts by CAG of non-government company which is not operated out of the funds of the Union of India or any State Government or any Union territory or any entity owned and/or financed by them - Held that:- there is no provision in Chapter V of the Finance Act, 1994, or for that matter in the CAG Act which empowers the CAG to audit the accounts of an assessee which is a non-government company, not in receipt of aid or assistance from any Government or Government entity. Sub-section (2) of Section 94 also does not empower the Central Government to frame rules for audit of the accounts of an assessee by any audit team under the Comptroller and Auditor-General of India. There can be no doubt that statutory rules, framed in exercise of power conferred by statute cannot introduce something not contemplated in the statute, from which it derives its rule making power.
On a harmonious reading of Rule 5A of the Service Tax Rules with the provisions of Chapter V of the Finance Act, 1994, as amended, it may be deduced that any officer authorized by the Commissioner would have to be interpreted to include the members of an audit team, an auditor or an accountant authorized by the Commissioner, and they would all have access to any premises registered under the Rules, for the purpose of carrying out scrutiny, verification and checks as might be necessary, including auditing of accounts, to safeguard the interest of Revenue.
The obligation to provide records to the audit party deputed by the Comptroller and Auditor-General is to be construed as an obligation to provide documents and records, when those documents and records are necessary for audit in accordance with law, subject to the provision of the CAG Act, for example, audit of the receipts of the Government meant for deposit in the Consolidated Fund of India or, may be, an audit on the request of the Governor or the President as indicated above.
Maintainability of writ petition - Held that:- It is well settled that existence of an alternative remedy is not in itself a bar to entertaining a writ petition. A writ petition can certainly be entertained when a notice is impugned as without jurisdiction.
Extended period of limitation - Held that:- Finance Act, 2011, whereby the provisions of the Finance Act, 1994, relating to the service of renting of immovable property have been amended, does not contain any provision which enables the Service Tax Authorities to make any demand beyond the period of limitation prescribed in Section 73(1) of the Finance Act, 1994.
Commissioner proceeded on the basis that there had been contravention, as a result of which, some tax payable had not been paid. The Commissioner of Service Tax did not address the issues, which were required to be addressed, for issuing a notice by invoking the extended period of limitation. - Demand raised by issuance of the impugned show cause notice has been pre-determined. When a demand is pre-determined the same does not remain in the realm of a show cause notice as held by the Supreme Court in Siemens Ltd. v. State of Maharashtra reported in [2006 (12) TMI 203 - SUPREME COURT OF INDIA].
When a notice is issued in support of transactions spread over a period of time and it is found that the extended period of invocation has been invoked, the notice cannot be treated as within limitation for some of the same transactions, once it is found that the extended period of limitation is not invocable - The entire claim except at best for, may be, four receipts is barred by limitation. It is well-settled inter alia by the decisions of the Supreme Court in M/s. Raza Textiles Ltd. (1972 (9) TMI 15 - SUPREME Court), Calcutta Discount Company Ltd. (1960 (11) TMI 8 - SUPREME Court) and Shrisht Dhawan (1991 (12) TMI 271 - SUPREME COURT) that an authority cannot invoke jurisdiction to exercise power by deciding jurisdictional facts wrongly. In exercise of the power of judicial review under Article 226 of the Constitution of India, this Court might examine the existence and/or correctness of the jurisdictional facts on the basis of which jurisdiction to exercise power is invoked.
Conditions precedent for exercise of jurisdiction to invoke the extended period of limitation were wholly absent. The Commissioner has not properly and independently applied his mind to the question of whether the conditions for invoking the extended period of limitation existed, but has acted mechanically, swayed by the report of the CERA team, which in itself appears to be illegal and unsustainable. The Commissioner of Service Tax has not properly applied his mind to the issues required to be addressed for invoking the extended period of limitation. The impugned show cause notice has been issued by wrongful invocation of jurisdiction. - Decided in favour of assessee.
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2014 (12) TMI 25
Denial of refund claim - Export of service or not - Appellant appointed by foreign clients to provide repair & maintenance service during warranty period on their behalf to the buyers in India - Business Auxiliary Service - Repair & Maintenance Service - Held that:- Appellant is a Distributor/agent of their foreign clients and procuring orders for supply of equipment by the foreign supplier. The appellant has no connection with the buyers in India. In fact he is identifying the buyers for the foreign clients, and the foreign clients are selling equipment to the Indian buyers, on principal to principal basis. We further find that as the equipment are having warranty and the foreign client have to provide certain services to Indian buyers and for providing that service, the appellants are providing service to Indian buyer on behalf of the foreign clients. In these circumstances, the recipient of the service is located outside India who used the services of the appellant to provide service to their buyers.
Appellant are providing the service of maintenance of equipment on behalf of their foreign clients to Indian buyers. They have provided the service on behalf of their foreign clients. We further find that during the warranty period, the repairs and maintenance service was to be provided by the foreign supplier and the appellant acted on behalf of the foreign supplier only. It is an admitted fact that the Indian buyer has not paid any amount towards the service provided by the appellant to the appellant during warranty period whereas the appellant who provided the service to Indian buyers has paid the service tax on maintenance service after the warranty period. - Appellant has provided the service of procuring purchase orders for their foreign clients and providing maintenance service to the Indian buyers during the warranty period on behalf of their foreign clients on the instructions of foreign clients are covered by the Rule 3(3) of Export of Taxable Service Rules, 2005. Therefore, the appellant are not required to pay service tax during the impugned period for their activity. Accordingly, they are entitled for refund claim - Decided in favour of assessee.
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2014 (11) TMI 1289
Classification of Works Contract Services - Revision of classification - Commercial or Industrial Construction Services to Works Contract Services - it was held by CESTAT that 'There was thus no doubt in the authority issuing show cause notice dated 22.10.2008 and its corrigendum dated 29.09.2009 that the classification of the services being dealt was ‘Works Contract Services’ with effect from 01.7.2006.' - HELD THAT:- There are no merit in the Civil Appeals - the Civil Appeals are dismissed.
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2014 (11) TMI 1235
Cenvat Credit - capital goods or not - being tower parts, green shelter, printers and office chairs - immovable property - tower would qualify as “part” or “component” or “accessory” of the capital goods i.e. antenna or not - it was held by High Court that subject items are neither capital goods under Rule 2(a) nor inputs under Rule 2(k) of the Credit Rules and hence CENVAT credit of the duty paid thereon was not admissible to the appellants.
HELD THAT:- Issue Notice.
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2014 (11) TMI 1178
Penalty u/s 78 - respondent has paid the tax before the issuance of the SCN - Held that: - the department has introduced voluntary disclosure scheme where if the assessee has paid tax voluntarily the entire interest is waived let alone the penalty - penalty set aside - appeal dismissed - decided against Revenue.
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2014 (11) TMI 1166
Recovery of alleged dues - Whether, in view of these facts, it would be appropriate for the Court to entertain these proceedings under Article 226 by issuing a mandamus for the payment of seven bills stated to be totaling an amount of ₹ 2.65 crores?
Held that: - once a serious matter relating to the evasion of service tax is alleged and drawn to the notice of the first respondent by the revenue authorities and the first respondent has been informed both of the pending investigation as well as to disclose documentary material, it cannot be held that the claim falls within that category where it can be ascertained that there is absolutely no defence or that a mandamus would be warranted - this is not a fit and proper case for exercising the discretion by the Court under Article 226 to entertain a petition seeking a mandamus for the payment of bills and the petitioner ought to be relegated to the ordinary civil remedy.
Petition dismissed.
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2014 (11) TMI 1136
Business Auxiliary service - appellants are franchisee of BSNL for providing the service of promotion and marketing and distribution of various products of BSNL for which they were receiving commission - Held that: - reliance placed in the case of M/s. Daya Shankar Kailash Chand Versus CCE& ST, Lucknow [2013 (6) TMI 340 - CESTAT NEW DELHI], where it was held that activity of purchase and sale of SIM card belonging to BSNL where BSNL has discharged the service tax on the full value of the SIM cards, does not amount to providing business auxiliary services and confirmation of demand on the distributors for the second time is not called for - pre-deposit is waived - demand set aside - appeal allowed - decided in favor of appellant.
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2014 (11) TMI 1132
Refund claim - Held that: - there is no conclusive finding against the appellant i.e. the assessee. An order of remand has been passed keeping in view the facts of this case. The apprehension expressed by the appellant that the authorities would nevertheless and mandatorily reject the refund claim is presumptuous. If the Authorities reject the claim for refund, the appellant would be entitled to question and challenge the said order as per law - appeal disposed off.
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2014 (11) TMI 1116
Principles of natural justice - reimbursement of the expenses is not includible in the assessable value - Held that: - appellants have shown a deliberate behavior of evading service tax. In the stay application they make a mention of financial hardship but have provided no evidence thereof and they have also not explained as to how even if there is any financial hardship, that will fall in the category of undue financial hardship - appeal dismissed for failure of pre-deposit.
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2014 (11) TMI 1093
Seeking exemption from the requirement of making any further deposit of the amount confirmed - Demand alongwith interest and penalties - appellants were distributor/marketing agency of M/s Forever Living India Pvt. Ltd. - Business Auxiliary service - service tax not paid on commission received - Held that:- the impugned demand is based on the amount of commission received by them under multilevel marketing scheme. So their plea that they were selling their own goods is obviously untenable and also devoid of any basis and also this plea was never put forth by them earlier. Indeed the issue is squarely covered against them vide CESTAT order in the case of Shri Surendra Singh Rathore & Others Vs. CCE, Jaipur-I [2013 (8) TMI 149 - CESTAT NEW DELHI]. Therefore, in view of the same , the requirement of pre-deposit is waived of. - Decided against the appellant
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2014 (11) TMI 1091
Invokation of extended period of limitation - Cenvat credit - transportation & distribution of food material, supply of tea & snacks, manpower services, (doctor, pharmacist & nurses), caretaking jobs at auditorium etc. - inclusion of cost of subsidy towards subsidized food as also several other fringe benefits in the cost of production - Held that:- in respect of several of the services, there are already decisions taking a view that the CENVAT credit is admissible and we find the decisions relied upon by the appellants are appropriate and applicable to the facts of this case. Further we also take note of the fact that appellants themselves have admitted that certain portion of the credit are not admissible after the amendment of provisions in the CCR and in our opinion, the appellants should deposit the interest on this amount paid by them for hearing the appeal. Accordingly, the appellants are directed to pay interest amount within eight weeks and report compliance. - Stay granted
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2014 (11) TMI 1072
Waiver of pre-deposit - Construction of Tamil Nadu Police Housing Corporation Ltd., Tsunami District Implementation Unit (TDIU), Peoples Development Association (PDA), Madurai Municipal Corporation and M/s.Harley Ram Nursing Home - Held that:- it is found that the Tribunal consistently granted stay in respect of demand of tax on the construction of houses by Tamil Nadu Police Housing Corporation Ltd. It is also found that the applicant had not produced any evidence in support of laying of roads for Madurai Municipal Corporation. It is also noted that the Tribunal in the case of construction of Tsunami project directed predeposit partly. It is further noted that construction of M/s. Harley Ram Nursing Home is a private entrepreneur which cannot be treated non-commercial construction. On a query from the Bench, the applicant failed to furnish break-up of the demand. On the other hand, Revenue on the basis of annexure to the show cause notice submitted that the demand of tax in respect of Tamil Nadu Police Housing Corporation Ltd. would be about ₹ 73 lakhs. Hence, the applicant is directed to make a predeposit of ₹ 12,00,000/- (Rupees twelve lakhs only) within 8 weeks. Upon deposit of the said amount, predeposit of balance amount of tax along with interest and penalty would be waived and recovery thereof stayed till disposal of the appeal.
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2014 (11) TMI 1066
Invokation of longer period of limitation - Demand - Short payment of Service tax - Held that:- it needs to be established whether the department can at all invoke the longer period of limitation and secondly, whether the bank has made short payment of tax. If the claim, if any, of the department is barred by limitation, the merits need not be gone into. With those observations, matter is remanded back to Deputy Commissioner. - Decided in favour of appellant by way of remand
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2014 (11) TMI 1057
Whether the impugned order has gone beyond the scope of both the SCNs or not - Appellant providing services such as asset management and fund management - Held that:- it is not discernible acting on material or basis which is not alleged/brought to the notice of the opposite party cannot be done, as is obvious and well known. No material can be relied upon behind Appellant’s back, as has been done in this case. It is made in violation of the salutary principles of natural justice. Therefore, the Impugned Order by relying on such extraneous material has clearly exceeded and travelled beyond the allegation made in both the SCNs and it cannot be done.
Tenability of demand for the period 2007-08 to March, 2013 - Major portion of the demand relates to Discounting charges and a small portion of which relates to commission earned on sale of Mutual funds and service charges - Held that:- there is not a semblance of consideration, discussion and finding, with material evidence in support, recorded by the Lower Authority in this regard in the Impugned Order, as was essential - yet the liability has been invoked and confirmed against them, in abstentia, as it were thus (non-discussion of material defence submission). Such casual non-consideration made would fail, as is obvious. It is against the salutary principles of natural justice also (‘right to effective representation’). The law in this regard is clear and well settled. It cannot be done. It goes to the root of the issue involve. By applying the decisions in the cases of CCE v. N.M. Nagpal (P.) Ltd. [2006 (5) TMI 49 - SUPREME COURT] and Alpic India v. CCE [2006 (3) TMI 681 - CESTAT, MUMBAI], the impugned order fails entirely, without prejudice and the liability after 30-6-2012 is dropped with respect to commission earned by the appellant as per Notfn. No. 25/2012-S.T., dated 20-6-2012.
Tenability of interest and penalties imposed - Held that:- as there exists no duty liability on appellant in terms of the Impugned Order, its attendant consequences follow as a matter of course. No interest under Section 75 of the FA would be payable by them as ordered therein. Also, no penalties would be imposable on them, similarly. By relying on the decision of Hon'ble Supreme Court in the case of Balakrishna Industries v. CCE [2006 (8) TMI 182 - SUPREME COURT OF INDIA], the interest and penalty imposed is not tenable.
Whether commission received by distributors of mutual fund company are in the nature of commission chargeable to ST under BAS or BOFS or not - Appellant urged that the ST on commission would be liable under BAS and they have not taken this point before the Lower Authority and is taken only during the Personal hearing - Held that:- even though, appellant have not taken up this issue before the Lower Authority, this being question of law, nothing bars them from raising the issue during Personal hearing. The Lower Authority being bound to follow the Board’s Circular No. 96/7/2007-S.T., dated 23-8-2007, has however failed to do so. . There is absolutely no reference made by him to this Circular also. He cannot do so. No reason is also discernible on record for his inaction and failure in this regard. Without prejudice, even if they have not taken this ground as their defence, the Lower Authority in the given circumstances was duty bound to consider the same, as the onus lies on him also in this regard. However, surprisingly and shockingly, the Lower Authority has demanded and confirmed the ST liability of commission earned on sale of Mutual Funds under BOFS and not under BAS, as is evident. The entire liability in the Impugned Order stood under the Commission received by the appellant on sale of Mutual Funds otherwise as per the records, they would have been well under the threshold limit of ₹ 10 lakhs. Accordingly, the whole foundation of the case collapses on this ground, without prejudice.
Eligibility of refund of ST amount and interest paid thereon - Held that:- as the appellant are well within the threshold limit of ₹ 10 lakhs, they would not liable for ST. However, they have paid the ST liability along with respective interest before the issuance of the Impugned Order, therefore, eligible for refund of the same with consequential relief - Decided in favour of appellant
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2014 (11) TMI 1048
Classification- Transportation of coal - Whether classifiable under Cargo Handling Service or GTA - Held that: Service tax on the impugned service is paid by M/s. SECL under GTA supports the appellants contention that the service is covered under GTA service and not under Cargo Handling Service. The agreement entered by appellant with M/s. SECL is also clearly for transport of coal. Also, the Commissioner vide several orders has also held that the said service is covered under GTA services. Therefore, the impugned service is not classifiable as Cargo Handling Service as per the decision taken by the Tribunal in the case of M/s. Narayan Builders 2013 (9) TMI 146 - CESTAT NEW DELHI, where it was held that mere handling of coal and movement of said goods from railway wagon to the site of thermal power station through the motor vehicle or any other means of transportation involved in such handling would not constitute Cargo Handling Service and also in the case of Anupama Coal Carriers Pvt. Ltd. Vs. CCE, Raipur 2012 (5) TMI 290 - CESTAT, NEW DELHI, that just bringing coal to railway siding would not be covered by Cargo Handling Service. - Decided in favour of appellent
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2014 (11) TMI 1023
Challenge to the Show Cause notice - demand of service tax on import on drilling activities and levy of tax on import of taxes for the period from 1-4-2006 to 17-4-2006. - challenge to the Circular No. 80/10/2004/S.T., dated 17-9-2004 - Held that:- the impugned circular cannot be considered as sole evidence and not the sole guiding factor for issuance of show cause notice. Further, it is stated in the counter affidavit that the circular is of not the basis to levy service tax but to clarify the position. Hence, the petitioner need not have any apprehension about the circular, however, shall give reply to the notice and the respondent, in turn, shall consider the facts of the petitioner’s case and also bear in mind the principles pointed out by the Supreme Court by examining the scope of the Service Tax Act under Section 65(104a) and Section 65(105)(zzv) of the Finance Act.
Hence, the challenge to the impugned circular is to necessarily fail and no ground is made to interfere with the impugned circular dated 17-9-2004 - Writ petition dismissed - Decided against the assessee.
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2014 (11) TMI 1021
Legislative competence of the Parliament - Levy of service tax on air conditioned restaurant and hotel, inn, guest house, club or campsite under sub-clauses (zzzzv) and (zzzzw) of Clause (105) of Section 65 of Finance Act, 1994 - serving of food or beverage, including alcoholic beverages or both, in its premises - providing of accommodation for a continuous period of less than three months - Held that:- Bombay High Court in the case of Indian Hotels and Restaurants v. Union of India [2014 (4) TMI 447 - BOMBAY HIGH COURT ] has observed that, It is therefore, dear that a sales tax is on sale of goods. While selling, supply thereof is contemplated and covered by Article 366(29A)(f) of the Constitution of India. It does not mean that the service during the course of or while supplying the goods is taxed, but the tax is and remains on sale of goods. That is why the State Legislatures were held to be empowered to impose, levy, assess and recover tax on sale of articles of food and drink which have been termed as “goods.”
Parliament had the legislative competence to levy Service tax on sub-clauses (zzzzv) and (zzzzw) of clause (105) of Section 65 of the Act. - Decided against the assessee.
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2014 (11) TMI 994
Denial of refund claim - Bar of limitation - Held that:- Action of the Respondent by contesting the issue on merits itself constitutes a case of ‘deemed protest’ and no time limit will be applicable even as per the second proviso to Section 11B of the Central Excise Act, 1944. However, the amounts were not paid as duty at the time of providing of services but was paid only when the investigation was initiated by the Revenue. In the facts and circumstances the amounts paid will be a case of ‘Deposit’ and will not be a situation of payment of duty when on merits Respondent got a favourable order from the appellate channel. The amount so paid was not recovered on the invoices and department has also not rejected the refund claim on unjust-enrichment. Accordingly, it is held that amounts paid by the Respondent was a ‘Deposit’ and not payment of duty when on merits the case was decided in favour of the Respondent. - Decided against Revenue.
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2014 (11) TMI 991
Port Services - Respondent and ONGC entered into an agreement to permit ONGC to lay pipelines for carrying oil - In consideration for allowing ONGC to lay submarine pipelines through the Port limits, Mumbai Port Trust was paid compensation by ONGC - Compensation was calculated as 50% of the wharfage charges normally payable for such goods handled by the Port - Held that:- Respondent has no control over the goods passing through the pipelines and the respondents are not required to maintain contact, repair or otherwise service, the actual pipeline which was laid within their limits. It is also clear from the agreement that the respondent did not extend any facility, service or personnel in relation to this pipeline or the goods flowing through these pipelines and the amount paid by ONGC therefore, cannot be considered as being amount paid towards any service rendered by the respondent towards the pipeline or the goods going through the pipeline and the amount paid for providing permission to ONGC to lay their pipelines through the port limits. If such permission would not have been granted, ONGC would have had to pass the pipeline through private land increasing the cost of the land and the pipeline. Therefore, the payments were made for the permissions and not to receive any port service from the respondent.
Mere erection of wharfage by itself does not amount rendering a port service and wharf is the structure where the ships dock for loading and unloading of goods. - The term used as ‘wharfage’ is merely to determine the measure of the compensation and not to determine the nature of the service rendered.
Laying of pipelines and payments made by ONGC to the respondent for granting permission to laying pipelines does not cover under the category of ‘port service’. In these terms we do not find any infirmity in the impugned order - Demand id also barred y limitation - Decided against Revenue.
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2014 (11) TMI 989
Penalty u/s 76, 77 & 78 - held that:- While considering the scope and ambit of Sections 76, 77, 78 of the Act, this Court has held in [2011 (1) TMI 52 - High Court of Punjab and Haryana] - Commissioner of Central Excise Commissionerate v. M/s First Flight Courier Limited; [2011 (2) TMI 80 - HIGH COURT OF PUNJAB AND HARYANA] - Commissioner of Central Excise, Commissionerate, Ludhiana v. M/s Akash Cable, [2010 (7) TMI 255 - PUNJAB AND HARYANA HIGH COURT] - Commissioner of Central Excise v. M/s Pannu Property Dealers, Ludhaina that Sections 76, 77 and 78 of the Act, do not envisage imposition of simultaneous penalties. This apart, there appears to be error in the order passed by the Tribunal holding that the appellant did not deposit 25% of penalty within one month of its impositions. The Tribunal lost sight of the fact that adjudicating authority did not impose penalty and therefore, the assessee did not get an opportunity to deposit 25% of the penalty, within one month. - Consequently, but without expressing any opinion on the merits of the appeal and as to the rights of parties, the appeal is allowed, order dated 4-7-2013 [2013 (7) TMI 508 - CESTAT NEW DELHI], is set aside and the matter is restored to the CESTAT - Decided in favour of assessee.
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