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Service Tax - Case Laws
Showing 381 to 400 of 2349 Records
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2014 (11) TMI 334
Waiver of pre deposit - Banking and Other Financial Services - appellant-Bank acts as both card Issuing Bank and also Acquiring Bank - Levy of tax on Interchange commission earned by Assessee - interest and penalty under Section 78 - Held that:- When a Credit card is swiped in a machine in the merchant establishment for verification, the issuing bank would verify and whether the credit card holder is eligible for using card before payment and thereafter it would, in turn, communicate the merchant establishment to complete transaction. In this case, both the banks are in reality providing a service to the card holder and the merchant establishment. The Issuing Bank is only providing service to the card holders to confirm their eligibility for credit which cannot be said to be a service to the merchant establishment or to the Acquiring Bank. service received or provided by an Issuing Bank or an Acquiring Bank in the kind of transaction is not covered in any of the clauses of definition of service. In such a situation, the taxability itself is in doubt. - sharing of the commission between the Acquiring Bank and the Issuing Bank cannot be considered as service transaction but as sharing of income between two service providers. - Stay granted.
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2014 (11) TMI 333
Waiver of penalty - Whether for the short payments of Service Tax, the assessee needs to be penalized under section 76 of the Act and whether Cenvat credit to be denied to them along with imposition of penalty under section 76 and Rule 15(3) of CC Rules for the same - Held that:- no malafides could be attributed to the assessee as the amounts were duly reflected in their ST-3 return and also as the amounts of short payment are rather on the lower side which have been paid voluntarily. - penalty waived extending the provisions of section 80 - Decided in favor of assessee.
Denial of the credit is on account of infirmities in the input invoices. I note that this is not the case of the Department that the input services have not been availed or payments not made for the same. In the circumstances, I find force in the plea made by Shri Rahul Aggarwal, CA for consideration of waiver of penalty and accordingly give benefit of section 80 of the Act and hold that no penalty under section 78 is imposable upon the assessee. I also note that this is not a case of short payment of Service Tax and therefore penalty under Section 76 of the Finance Act 1994 is not at all warranted.
As regards imposition of other penalty is concerned, I hold some imposition is necessary as the invoices on which the Cenvat credit was availed have been found to have deficiencies which of course, which have been later rectified. Accordingly imposition of penalty ₹ 2000/- under Rule 15(3) of Cenvat credit Rules 2004 is justified and no interference is made. Penalties imposed under section 76 and section 78 of the Finance Act 1994 are not sustainable as per grant of benefit of section 80 of the Act. However token penalty of ₹ 2,000/- is held to be liable - Decided partly in favour of assessee.
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2014 (11) TMI 314
Waiver of pre deposit - Construction of residential and commercial complex service - Held that:- Even if there is a transfer of undivided share of land and a separate agreement is entered into for construction of apartment, the agreement would not lead to the service of construction of residential complex but only a part of the complex. This became exigible only after the insertion of explanation. As regards the second differentiation, we do not find any relevance. what was being sold and agreed to be constructed was an apartment which is nothing but part of a residential complex and therefore prior to 01/07/2010, it could not have been taxed and since the nature of transaction does not make the difference of the outcome, the decision in the case of Krishna Homes [2014 (3) TMI 694 - CESTAT AHMEDABAD] would apply since it examines the issue in great detail and has considered all aspects. Unfortunately the decision in the case of LCS City Makers [2012 (6) TMI 363 - CESTAT, CHENNAI] was not brought to the notice of the Bench. In our opinion, what is required to be seen is what exactly is the agreement for. If the agreement is not for the whole complex, for the period prior to 01/07/2010, prima facie, there cannot be any demand. In view of the above discussion, we consider that the appellant has made out a prima facie case for waiver of pre-deposit of balance dues and recovery thereof for 180 days from the date of this order. - Stay granted.
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2014 (11) TMI 313
Cenvat Credit - Scope of input services - Manufacturing Activity carried out by the job worker - Revenue denied the credit to the assessee as his is neither the manufacturer nor the service provider - GTA Service - Sales Promotion Services - Held that:- Manufacture of the goods is carried out by the job workers, and excise duty liability also discharged by them. The Cenvat Credit is relatable to the goods which is manufactured and the person who is manufacturing the goods. Therefore, the Cenvat Credit in respect of inputs service relatable to the manufacture of goods can only be availed by the actual manufacturer and not by anyone else. The respondent, since not undertaking any manufacturing activity nor they discharging the excise duty liability cannot be entitled to take Cenvat Credit merely on the basis that invoices of input service is in their name and payment of service invoices made by them. As regards the loan licence concept it is for the purpose of Drug Act. However, as regards the concept of manufacture, availment of Cenvat Credit, discharging of excise duty liability there is no separate provision in respect of pharmaceutical goods manufactured on loan licence basis by some other manufacturer. As per Central Excise provision irrespective of ownership of the goods, the person who undertakes the manufacturing of the goods shall only be considered as manufacturer. Therefore, the respondent by any stretch of imagination is not the manufacturer of the goods in the present case. If this is so, then the respondent is also not entitled for Cenvat Credit in respect of any services relatable to the goods which is not manufactured by the respondent but manufactured by the job workers. respondent is not entitled for the Cenvat Credit in respect of GTA, Sales Promotion, etc. - Decided in favour of Revenue.
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2014 (11) TMI 312
Waiver of pre-deposit – Classification of service – Legal consultancy service or Management consultancy service – Held that:- It was for the department to establish that the payment made was for service of management consultancy to rebut evidence shown by appellant – Merely because there is no evidence to show that services received are from the Chartered Accountants nor there is any evidence to show that payments made by appellants are towards reimbursement of Chartered Accountant services per se not sufficient to sustain classification under management consultancy – just because IBM US has issued invoice and there is no evidence to show that it is actually reimbursement, it has been held that this amounts to management consultancy service. We are not able to appreciate at this prima facie stage. In view of the above, the demand for service tax under the category of management consultancy service, in our opinion, prima facie is not sustainable.
In the absence of any evidence to show that the foreign service provider was licensed by Telegraphic Authority of India, in terms of precedent decisions on this issue, levy of service tax cannot be sustained - appellant has been able to make out a prima facie case except for ₹ 67,228/-. Accordingly, the appellant is directed to deposit an amount of ₹ 1 lakh within eight weeks - Partial stay granted.
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2014 (11) TMI 311
Management, Maintenance and Repair services - appellant is performing the statutory/sovereign function - appellant is an agent of Government of Maharashtra. - Held that:- Appellant are providing these services in accordance with MID Act 1961 and Rules framed there-under and the activity undertaken by them is mandatory and statutory functions therefore, the activity as per the said Circular are not liable to service tax. Section 97 of the Finance Act, 1994 and the Notification No. 24/2009 dated 27.7.2009 exempts the services of maintenance and repairs of roads. Therefore, the appellant are not require to pay service tax on their activity as discussed above. The appellant are executing their work which is statutory in nature. demand is for two periods - one from 1.10.2011 to 30.06.2012 and the second is from 01.7.2012 to 30.09.2012 when the negative list came into effect but the show-cause notice has been issued on the basis of definition of Management, Maintenance and Repair service has stood prior to 01.07.2012. Therefore, as post 01.07.2012 the provisions are not existing therefore, the demands for the period post 01.07.2012 are not maintainable. - Decided in favour of assessee.
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2014 (11) TMI 310
Nature of Virtual Private Network (VPN) services - import of services - Information access/retrieval or Online information and database access or retrieval service - Receipt of service from foreign service provider - Held that:- data centre is located abroad to which the foreign offices have access for data and its retrieval. The ownership of data is quite clearly with the SBI foreign offices. Equant have not provided any data for access/retrieval. They have simply enabled the connectivity. They have provided connectivity which enables the FOs to access/retrieve data online. The responsibility of Equant is to ensure that network VPN functions properly. The Commissioner has totally misread the meaning of “Services provided in relation to online information and database access or retrieval”.
Clearly the service provided has to relate to information access/retrieval. And EQuant has not provided information and database. The ownership of data is with the FOs. This is a vital fact. The Commissioner's finding that it is not necessary that the original data should emerge or originate from the provider of VPN network is an incorrect reading of section 65(75) and 65(105)(zh). The service provided by Equant will more aptly fall under telecommunication service if provider is licensed under Indian Telegraph Act. Reliance is placed on the case of United Telecom Ltd. (2008 (8) TMI 191 - CESTAT, BANGALORE). SBI India have not received “Online information and database access or retrieval” service from foreign service providers. Therefore, demand of service tax, interest, fees and penalty is not sustainable. - Decided in favour of assessee.
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2014 (11) TMI 277
Packaging services - Assessee provide packaging service to fertilizer manufactured by other company - Held that:- It is cleared that fertilizer cannot be marketed without packaging in the manner specified under the said order, thus packaging of fertilizer is a statutory requirement for sale of the fertilizer. We further find that sale of fertilizer in bulk requires a license to sell in bulk. As the appellant is not having any such license, therefore, packaging is a statutory requirement for sale of fertilizer by M/s Zuari Industries Ltd. If marketing of fertilizer cannot take place without packaging, the appellant is a manufacturer as per section 2(f)(i) of the Central Excise Act, 1944, wherein manufacture includes any process incidental or ancillary to the completion of a manufactured final product. - appellant being a manufacturer is doing the packaging activity and does not fall under packaging activity defined in section 65(76b) of the Finance Act, 1994. - Decided in favour of assessee.
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2014 (11) TMI 276
Construction of Residential Complex Service - Liability to pay tax prior to 1-7-2010 and subsequent to it - Held that:- Prior to 1.7.2010, what was liable was ‘construction of residential complex’ and when there is an agreement between the buyer and the customers for construction of flat, it cannot be said that such an agreement is for construction of residential complex. Therefore, prior to 1.7.2010, when the explanation was added to the definition of ‘commercial or industrial complex service’, tax is not payable. after 1.7.2010, the appellant does not have a case on merits.
Adjustment to tax paid for the earlier period with the tax liability of subsequent period - Held that:- Admittedly, the amount was paid prior to 1.7.2010. Despite discussions for quite some time and despite queries from the Bench, learned counsel could not convince that this amount was not paid after collecting from customers and also could not indicate the date on which such payment was made. We also find this amount has not been appropriated by the original authority also. Therefore, this amount cannot be taken for adjustment with the amount payable subsequent to 1.7.2010 - prior to 1.7.2010, the appellant is not liable to pay tax and adjustment of amount paid prior to 1.7.2010 is not possible - Stay denied for the subsequent period.
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2014 (11) TMI 253
Levy of service tax on sub-contractor - Waiver of pre deposit - appellant's plea is that the principal contractor RNS Infrastructure Limited have deducted the service tax liability and had paid the same to the Department. - Manpower Recruitment or Supply Agency service - Held that:- Appellant has produced relevant documents before the Tribunal as well as before this Court. If the stand of the appellant that the service tax liability is discharged is proved to be correct on the basis of the records furnished, the Department ought to have consider payment of service tax in the light of such statement. This stand is not a new one taken at the first time before the Tribunal, but has been communicated by the principal contractor at the earliest point of time even before the Adjudicating Authority. The appellant is only a civil contractor working under the principal contractor. If records are available with the Department, then there is no reason why the authority should have refused to go into the claim and verify the bona fides of such a plea of payment of service tax. At this point of time, we are not testing the merits of the documents furnished, namely, ST-3 returns and other connected documents. But that will be a prima facie material for us to consider that the issue requires to be properly considered by the Department in the light of what has been stated on 04.10.2010 and supported by the documents. If it is found true, then the consequence will flow therefrom. - Tribunal to verify the claim - stay order of tribunal directing the assessee to deposit entire amount of service tax modified and stay granted partly.
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2014 (11) TMI 252
Rejection of the declaration made under Section 106 - Voluntary Compliance Encouragement Scheme - Held that:- It is to be noticed that at an earlier point of time when recovery proceedings were initiated during the pendency of the 1st appeal filed under Section 85, petitioner was before this Court. In that writ petition, a specific contention was taken up by the Department, that no appeal would be maintainable under Section 85. Evidently, there is a further appeal to the Central Excise and Service Tax Appellate Tribunal as provided under the Finance Act, 1994. The petitioner cannot be permitted to bye- pass such remedy and approach this Court, especially since on a reading of the judgment of this Court, rendered in the earlier round, it is evident that there is a dispute with respect to the satisfaction of the 50% amounts as directed in Section 107 also.
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2014 (11) TMI 251
Denial of refund claim - Notification No. 17/09-CUS dated 7/7/09 - Non submission of original invoices - Service provided by assessee are not port services - Service provider registered under different category - Non mention of goods on invoices - CHA has charged other charges which do not fall under the CHA services - refund claim was filed by describing the transportation of the goods by road, whereas the actual transportation was rail - the claim was filed under the category of THC instead of CHA - Held that:- invoices which are computerised invoices have been down loaded through the internet - Cenvat credit is not to be denied on the basis of computer generated invoices.
Any services provided on the port are ‘port services’ - refund cannot be denied on the ground that service providers are not registered for any particular services - admittedly the said invoices have cross reference to either invoice number or the shipping bill number and/or container number. From the said cross references the description of the goods can be found out and the denial of the claim on the said ground is not justified when admittedly the services have been used for the export of the goods. - much as and as long as the CHA paid the service tax on the entire consideration under the category of CHA services, the service recipient would be entitled to the benefit of the same. No such objection was raised by the Revenue at the time of collection of service tax from the CHA and allowing them to raise such an objection at the time of grant of refund would be against the principles of justice.
There are the inadvertent mistakes having occurred in the hands of the person preparing the refund claim. Similarly claiming the service tax under a different service category by referring to a wrong sub-Section should not result in denial of the refund, if otherwise due to the appellant on merits. - Matter remanded back - Following decision of CCE vs. Gokul Refoilds & Solvents Ltd. reported in [2012 (6) TMI 245 - CESTAT, AHMEDABAD], Western Agencies Pvt. Ltd. vs. CCE reported in [2011 (3) TMI 528 - CESTAT, CHENNAI (LB)] and CCE vs. Dishman Pharmaceuticals & Chemicals Ltd. reported in [2010 (10) TMI 355 - CESTAT, AHMEDABAD] - decided in favour of assessee.
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2014 (11) TMI 250
Valuation of service - Whether commitment charges recovered by the Bank are to be added to the taxable service for charging service tax or these charges are to be treated as interest and no service tax was to be levied on such charges - Held that:- commitment charges are the Charges imposed on the client who decide not to draw the amount of loan that has been at their disposal. These charges are basically to compensate for the loss of interest that the bank would have earned if the customer had drawn money from loan account. It is seen that the charges are related to lending of money to the client and; in order to give limit/overdraft facility, the bank keeps the fund available for the same. Under such circumstances, it is evident that such charges are integrally connected with the lending which is a taxable service. Therefore, commitment charges cannot be separated from lending service. I, therefore, hold that the commitment charges are chargeable to service tax and the amount of ₹ 46,902/- is recoverable from them. - Decided against assessee.
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2014 (11) TMI 249
Waiver of penalty - Delayed payment of service tax - service tax paid before issuance of SCN - Held that:- it is observed that appellants have clearly admitted in their of submissions that amount was paid as pointed out by the audit. This fact itself does not prove their bonafide that they have deposited the amount before the issue of Show Cause Notice suo moto. - penalties are rightly leviable on the appellants.
Availment of Cenvat Credit - Availment of credit on furniture - Held that:- table, chair, stool, cot etc. were of the same genre and were in the nature of office furniture and were not eligible for availment of Cenvat Credit - Decided against assessee.
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2014 (11) TMI 248
Classification of service - On-Line Information and Database Access and/or Retrieval Services or Business support service - Held that:- In consideration for the services rendered, the foreign entity, Reuters Ltd., U.K., is required to pay a fee to the appellant in an amount equal to 108% of the costs and expenses incurred by the appellant in providing those services. Thus, as per the agreement, the services rendered is one of collecting, collating, verifying data and transmission of the same to the foreign-sister concern of the appellant. The information has to be transmitted either electronically or otherwise and the consideration is paid on cost plus basis. Thus, the services rendered by the appellant does not seem to be of the nature of any management or repair services as alleged in the show cause notices and as concluded in the impugned order. The data furnished by the appellant is used by the foreign entity for inclusion in their products for dissemination to the customers situated worldwide. In other words, the activity of the appellant supports the business undertaken by the foreign entity abroad. Thus, we find there is merit in the argument of the appellant that the activities undertaken by them, merits classification under ‘Business Support Services'.
Appellant has rendered the services from India and the appellant has received the consideration in convertible foreign exchange. In view of the above factual position, the services rendered by the appellant would merit classification as ‘export of services' from India. On export of services, service tax liability is not attracted. appellant had not declared any dividend whatsoever. Thus, factually also the impugned order is incorrect inasmuch as no dividends have been declared by the appellant during the impugned period and therefore the question of repatriation would not arise at all. Thus, the impugned orders lack merits. - Decided in favour of assessee.
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2014 (11) TMI 247
Condonation of delay - Appeal wrongly filed before Commercial tax officer - Delay occured in transferring the appeal - when an appeal is filed before a wrong authority, whether that can be taken as the date of filing appeal even if appeal was received by proper appellate authority subsequently - Management, Maintenance or Repair Service - Held that:- there was definitely a mistake committed in filing appeal even though it was drafted correctly and the authority was correctly mentioned. It has to be noted that even Commercial Tax officer did not bother to take any action and did not bother to look into the papers. If they were to do so properly, the appeal papers would have been returned to the appellant or would have been forwarded to the proper authority. This aspect also has to be taken into account. The Govt. office also has to take action on the papers received and no action was taken on the papers received from a citizen of the country. We cannot simply deny a citizen s appellate right just because they filed appeal with a wrong authority. because of the peculiar circumstances in this case, it would be appropriate not to deny opportunity to the appellant in this case and accordingly, we take a view that date of filing appeal before Commercial Tax officer has to be taken as the date on which appeal was filed. Since the date of filing appeal before Commercial Tax officer is within the period of limitation, appeal could not have been rejected on the ground that the same has been filed beyond the period of condonation. - matter remanded back - Decided in favour of assessee.
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2014 (11) TMI 246
Waiver of pre deposit - Security Agency Services - nature of services provided by the Mumbai Police to individuals or organizations in conducting various private and public events - Held that:- prima facie the services provided by deployment of additional police force, either to individuals or for public events, partakes the nature of maintenance of peace and preservation of order. Further, the costs paid by the service recipients gets credited to the consolidated fund of the State, which is also suggestive of statutory/sovereign nature of the function. appellant has made a strong case for grant of stay - Following decision of Security Guards Board vs. Comm. Of Central Excise, Thane II [2011 (9) TMI 113 - BOMBAY HIGH COURT] - Stay granted.
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2014 (11) TMI 231
CENVAT Credit - Adjudication on the basis of revised return - Whether the authority shall act on the belated revised return or on the original return - Held that:- In any circumstance law has to operate for proper application to determine tax liability on the facts settled. If the facts and circumstances establish that there was proper discharge of tax liability and Cenvat credit was available in accordance with law and also these aspects are evident from the record there shall not be difficulty to pass appropriate adjudication order. By this we do not say that a belated return shall receive consideration. Since there are difficulties expressed in understanding the material facts and figures by both sides due to the situation of belated return, we dispense with requirement of pre-deposit and remand the matter to the learned adjudicating authority to grant fair opportunity to the appellant to support its claim - Decided in favour of assessee.
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2014 (11) TMI 210
Technical Inspection and Certification service - appellants engaged in manufacture of body building of buses, trucks etc., also undertake repair maintenance and servicing of commercial vehicles - AGPL after conducting inspection and taking rectificatory action as recorded in the vehicle data sheets send the vehicles back to TML for export - whether the service provide by AGPL is Technical Inspection and Certification Agency Service - Held that:- On receiving this work order AGPL undertakes the jobs as indicated in the vehicle data sheet. The data sheets give details of defects and rectificatory action under various Heads, namely Leakages, Electricals, Mechanicals, Body, Paint, Body Fitments. The rectification job of these defects certainly seem to be activities conducted by any vehicle repair shop. If the argument of Revenue is accepted, every motor garage will become a technical inspection and certification agency. This would lead to a ridiculous situation. Revenue appears to have misread the meaning of technical inspection and certification. We note that the definition conveys the purpose of certification alongwith inspection to meet specified standards. The job card or vehicle data sheets clearly indicate that AGPL are merely rectifying/replacing some damaged/defective parts etc. By no stretch of imagination can this activity be termed as technical inspection and certification. We therefore set aside the order-in-original confirming the demand of duty on the activities undertaken by the appellant.
Whether a service would amount to 'renting of immoveable property' or to 'storage and warehousing service' - Held that:- facts are clearly in favour of AGPL. AGPL has merely rented space out to TML. Although they arranged for security, the expenses on this account are met by TML. The Ld. A.R. stated that it is not clear from records whether the management and safekeeping of the vehicles is done by AGPL. On the contrary, we find that there is a clear finding of the Commissioner that handling, management and safekeeping of the vehicles is the responsibility of TML. Even the security is paid for by TML and so are the telephone expenses and diesel expenses. We find that none of the ingredients which are essential part of 'warehousing and storage service' are fulfilled so as to cover the activity of AGPL under this service - Decided in favour of assessee.
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2014 (11) TMI 209
Re-classification of service for the purpose of cenvat credit - Management Consultancy Service or Business Auxiliary Service - Whether or not duty determined and classification of services made at the service provider's end can be charged by the authorities having jurisdiction over the service recipient's end - advocate explained that if the classification of the services is under Section 65 (105) (r) then 100% credit of input services is admissible to the appellant as claimed - if the classification is made under Section 65 (105) 22b) then credit admissible for use will be 20% of the total credit as claimed by Revenue - Held that:- In view of the interpretation of law made by the Courts, including the Apex Court [2007 (11) TMI 23 - SUPREME COURT OF INDIA], no option is left with the Revenue to change the classification/ assessments of the services at the service recipient’s end. The service tax paid by M/s. IHCL was at the behest of the department and was not altered during the disputed period. Credit of service tax paid on the invoices cannot be denied or utilisation reduced on the grounds that classification of the services was wrongly done at the service provider’s end. - Decided in favour of assessee.
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