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Service Tax - Case Laws
Showing 1 to 20 of 2343 Records
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2015 (12) TMI 1669
Works contract - composite turnkey contract - work executed by the appellant in favour of DMRC amounts to a composite indivisible works contract but was erroneously classified by Revenue as ECIS during the period upto 01.06.2007 - Held that: - the preambular portion of the definition of works contracts excludes works contract provided in respect of railways from the scope of definition of the taxable service, during relevant period - appeal allowed - decided in favor of appellant.
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2015 (12) TMI 1645
Refund claim - the CESTAT directed the respondents to remit the amount paid by the petitioner towards service tax and interest under protest, forthwith - Held that: - although there is no stay order passed by the Supreme Court, the refund has not been made to the petitioner for over two years - the respondents are directed to process the refund and to pay the refund due to the petitioner - petition allowed - decided in favor of petitioner.
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2015 (12) TMI 1623
Clearance of molasses - demand of duty on the ground that the sludge had reportedly been used in the castings units for preparing binders/cores, as the same could not be used anywhere else and the same is correctly classifiable under Tariff sub-heading 3824.90 and attracting Central Excise duty @ 16% adv - whether the appellant is liable to pay duty on sludge during the period or not? - Held that: - the reliance is placed on the decision of Apex Court in the case of Bajaj Auto Ltd. [2015 (8) TMI 197 - SUPREME COURT] wherein the Apex Court hold that aluminium dross and ash emerged only as by-products during die-casting of aluminium parts as no manufacturing process involved and hence no excise duty is payable thereon. We hold that as molasses is not manufactured item, the duty is not payable thereon - In this case also as molasses/sludge emerges without any manufacturing process and in that case the excise duty is not payable by the appellant - appeal allowed - decided in favor of appellant.
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2015 (12) TMI 1607
CENVAT credit - Non-maintenance of separate accounts with regard to input and input services - Held that: - For dropping the show cause notice proceedings, the adjudicating authority in the order dated 11.4.2012 has held that the assessee is required to maintain proper records for taking and utilization of Cenvat credit in compliance of the provisions of Rule 9(2) of the said Rules, which do not prescribe any separate record in respect of dutiable goods and taxable services. The only provision for maintenance of separate records under the Cenvat Credit Rules, 2004, I could not find under Rule 6(2) for the said rules, which provides separate records for the dutiable goods or taxable service and the exempted goods/services. This was not the situation in this case as the goods manufactured and services provided by the assessee were not exempted. Thus, I do not see any violation in maintenance of common record for Cenvat credit taken & utilized by the assessee.
Since the adjudicating authority on proper analysis of the facts involved in this case has arrived at the above conclusion, I am of the opinion that the views taken by the authorities below cannot be interfered at this juncture since the issue involved is factual in nature - appeal dismissed - decided against Revenue.
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2015 (12) TMI 1604
Levy of service tax - transportation of sugarcane from the cane collection centre to the sugar mill, initially paid by the appellant sugar mill but deducted from the price of the sugarcane payable to the farmer on the basis of an average rate - Held that: - The issue herein has been squarely decided in favour of the appellant in earlier appeal between the parties in the case M/s. Nandganj Sihori Sugar Co. Versus CCE. Lucknow [2014 (5) TMI 138 - CESTAT NEW DELHI], wherein under same facts and circumstances deciding in favour of the appellant, this Tribunal held when the transporter did not issue consignment notes or GRs or challans or any documents containing the particulars, in Explanation to Rule 4B of Service Tax Rules, 1994, the transporters cannot be called Goods Transport Agency and, hence, in the appellant’s case the service of transportation of sugarcane provided by the transporter would not be covered by Section 65(105)(zzp). Accordingly, this Tribunal held that there will be no service tax liability on the appellant sugar mill as they have not received the service from a Goods Transport Agency. In view of this, Tribunal set aside the orders in the earlier appeal allowing the appeal. We also take notice of the fact that under the purchase agreement and the relevant State Act, the price fixed by the State Government of Uttar Pradesh to the farmers for the purchase of sugarcane includes the cost for delivery of sugarcane by the farmer to the sugar mill. Thus, we hold that the actual recipient of the transportation service is the farmer and not the sugar mill, when admittedly transport cost has been recovered from the price of the sugarcane payable to the farmer. In view of this matter, we allow the appeal and set aside the impugned order - decided in favor of appellant-assessee.
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2015 (12) TMI 1600
Levy of interest on delayed payment of service tax under Section 75 of the Finance Act, 1994 - imposition of penalties under Sections 76, 77 and 78 of the Finance Act, 1994 - Security Services - appellant had not filed ST-3 returns for the period from October 2004 to March 2005 and April 2005 to September 2005 and they have also not paid the service tax dues pertaining to the said period. On the same being pointed out by the audit party, the appellants paid the service tax of ₹ 22,87,217/- and interest amounting to ₹ 43,350/- on different dates - Held that: - there is no dispute regarding tax liability, which is upheld. The appellant had paid almost the entire amount of service tax due, except a small portion before issuance of show cause notice. It is also observed that the remaining amount was paid immediately after the adjudication order. We find force in the arguments of the learned counsel that the penalty equivalent to service tax, under Section 78 of the Finance Act, 1994 is not warranted in view of the facts of the case. Therefore, penalty imposed under Section 78 of the Finance Act, 1994 is set-aside. However, we find force in the arguments of the learned Authorized Representative that the appellants had not filed ST-3 returns and had not paid the service tax dues though they were aware of their liability. Hence, we uphold the penalties imposed under Section 76 and 77 by the adjudicating authority. As the amount of penalty is not quantified in the order-in-original, we direct the adjudicating authority to quantify the same in accordance with the impugned order-in-original - appeal allowed by way of remand.
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2015 (12) TMI 1599
Demand - port services - storage and warehousing services - Held that: - Ports are statutorily required to handle goods and vessels; to that extent they provide a safe harbour for ships with berths for holding them fast. These are generally presented as pilotage and berth hire. In relation to goods, ports provide space for storage - either in the open or in covered godowns - and ports collect wharfage. Handling of cargo is not a part of the core activities of the port. Even if the port authority in a major port does handle it, it is performed through the Dock Labour Board which is an official stevedore - It would, therefore, appear that ports licence entities to interact with them and with others in relation to vessels and cargo, steamer agents, stevedores, ship chandlers, etc., which are not in the nature of authorisation to perform such activities that the port otherwise undertakes.
Storage and warehousing service - Held that: - the definition of ‘storage and warehousing’ in Section 65(102) of Finance Act, 1994, we find, that it specifically excludes service in relation to agriculture produce. On this count, too, the demand of tax on the service rendered by the appellant is untenable - The appellant handles cargo which involves loading, unloading and transporting. Moreover, such handlers are often required to provide space for aggregation and security of cargo till they are ready to be moved to the vessels carrying these. The ‘storage and warehousing’ that is intended to be taxed is a specialised field that has for long held a vital position in commodity logistics. Such warehousekeepers are recognised in law as transit custodians with enacted responsibility and rights over the goods. Even to the extent of according the right of transfer of ownership through the transfer of warehouse receipt. The storage space provided by the appellant does not fall within that category but is one of renting of space. The demand of tax, therefore, is not sustainable.
Appeal allowed.
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2015 (12) TMI 1588
Demand - transportation of goods by road - "Business Auxiliary Services" - reverse charge mechanism - Held that: - the demand pertains to the period 2007-08 to December, 2009. The dispute on the taxability on the foreign services on reverse charge basis was under dispute only for the period prior to 18/4/2006, however, thereafter there was no doubt about taxability of services therefore the plea of the Ld. Counsel that the matter was under dispute is of no relevance for the period 2007-08 to December, 2009. I also note that Ld. Commissioner, considering the fact that the transaction was recorded in the books of account of the appellant, reduced the penalty to 50% invoking new Section 78. In view of the facts and circumstances of the case, I find that appellant could not make out a case of reasonable cause for non payment of service tax in time. I do not find any infirmity in the impugned order, hence the same is maintained - Appeal dismissed - decided against appellant.
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2015 (12) TMI 1580
Interpretation of the notification dated 1-6-2007 - tribunal [2016 (7) TMI 89 - CESTAT NEW DELHI] has held that, construction of hospitals for charitable organization (e.g. B.L. Kapoor Hospital) is covered within the scope of the scope of commercial construction and hence liable to S.T. under C.I.C.S.. - HC dismissed the revenue appeal.
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2015 (12) TMI 1576
Demand of interest - appellant utilized accumulated Cenvat credit while discharging Service Tax liability from Cenvat credit on GTA Services under reverse charge mechanism - whether interest is required to be paid by the appellant for wrongly availing and utilizing Cenvat credit - Held that:- demand of Service Tax for the period 1-1-2015 to 31-3-2007 was paid in cash on 13-9-2007 & 27-9-2007 belatedly. Therefore, interest liability for wrongly utilization of Cenvat credit and late payment of duty in cash is attracted and has been correctly upheld by the first appellate authority. - Decided against the appellant
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2015 (12) TMI 1574
Cenvat demand - input services used in the manufacture of rectified spirit - 2% of total production of rectified alcohol is not used in the manufacture of denatured alcohol - original authority indicated that approximately 98% of is used for de-natured alcohol cleared on payment of duty - Held that:- there is no assertion with evidence by the Revenue regarding actual clearance of exempted rectified spirit by the respondent to the extent of 2% of total production. An inference made is the reason for this appeal. However, even, if it is considered that such 2% of rectified spirit has been cleared by the respondent, the plea made by the respondent as recorded by the original authority regarding applicability of Rule 6(5) of Cenvat Credit Rules, 2004, has to be considered the services or of such nature, which do not attract the provision of sub-rules (1), (2) and (3) of Rule 6. - Decided against the Revenue
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2015 (12) TMI 1573
Refund claim - Circular No. 108/02/2009, dated 29-1-2009 - non-leviability of service tax for the transactions made with the buyers of the flats - service tax paid by mistake of law and appellant had not collected the same from the customer/buyers - Held that:- this special kind of agreement, where the builder has not sold the flat directly but made the buyers as owners of the land and those owners in turn entered into an agreement with the said builder for construction of flats for their own personal use, the provisions of Section 65(91a) of the Finance Act, 1994 are clear that said residences (flats) would not be covered under the definition of residential complex. Consequently these activities or the transactions in question would not attract liability of payment of service tax under the service of construction of complex service as per the provisions of Section 65(105)(zzzh) which defines the taxable service of construction of complex.
The service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during the relevant period. It is made clear that service is definitely under the exclusion category and not liabile for payment of service tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund claim under the provisions of refund claims wherein the adjudicating authority will also examine the claim under both the criteria i.e. time bar as well as ‘unjust enrichment’.the service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during the relevant period. It is made clear that service is definitely under the exclusion category and not liabile for payment of service tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund claim under the provisions of refund claims wherein the adjudicating authority will also examine the claim under both the criteria i.e. time bar as well as ‘unjust enrichment’.the service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during the relevant period. It is made clear that service is definitely under the exclusion category and not liabile for payment of service tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund claim under the provisions of refund claims wherein the adjudicating authority will also examine the claim under both the criteria i.e. time bar as well as ‘unjust enrichment’. - Appeal allowed by way of remand
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2015 (12) TMI 1572
Demand of interest and imposition pf penalties - for the period post 18.04.2006 - raised an amount as External Commercial Borrowing (ECB) in the form of Convertible Bond - to raise ECB, appellant had paid amounts to various entities situated abroad as an amount towards the service rendered - appellant discharged service tax liability and has also availed the CENVAT credit of such service tax liability on the amount paid as tax under reverse charge mechanism.
Held that:- appellant's challenge to demand of interest is basically on the ground that the said demand of tax was not sustainable on the ground that the show-cause notice is issued for the demand of tax on 11.03.2008 while the fees were paid to various entities during the period October 2004 to September 2006 and the demand of tax was paid on 28.05.2007. We find strong force in the contentions raised by the appellant in as much if the appellant would have taken the plea of limitation, he may have succeeded and no demand of tax would be sustainable on him by applying the judgement of Tribunal in the case of Jain Irrigation Systems Ltd [2015 (9) TMI 160 - CESTAT MUMBAI]. Therefore, we set aside the demand of the interest and the penalties imposed on the appellant by the impugned order which is challenged before us. - Appeal disposed of
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2015 (12) TMI 1571
Seeking setting aside the penalties imposed - non-discharge of service tax liability in time due to financial crises and ill health of the husband of the Proprietor - discharged the entire service tax liability and interest thereof before the issuance of show cause notice - Held that:- it is found that the appellant has not discharged the entire interest liability which is fastened on them due to non discharge of service tax liability. There is no dispute that the appellant is liable to discharge the service tax liability under the category of Manpower Recruitment or Supply Agency Services. We also find that the appellant had charged and collected the service tax from their clients but did not deposit the same into the Government treasury. Also there is no evidence submitted regarding many clients of the assessee did not pay them the amount as billed. Therefore, we have to hold that the appellant having charged and collected the service tax liability and not deposited in the Government treasury and having also not to discharge the interest liability, the impugned order is correct and appellant is not eligible for the relief under Section 80 of the Finance Act, 1994. - Decided against the assessee
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2015 (12) TMI 1567
Demand - non-payment of service tax under photography services during the period 2004-05 - appellant contended that they have started business in the year, 2004 and they are not conversant with the legal provisions. However, they got themselves registered with the Service Tax Department in April, 2005 - substantial income on simple sale of items, like, cameras, camera covers, film rolls etc. - Held that:- it is found that the pure sales of materials has no bearing to the service tax liability and cannot be added to the taxable value. This aspect was not examined by the lower authorities. We find that the appellants are liable to service tax during the impugned period on the value of services provided, but not on simple sale of various items, which are not part of taxable service provided to any person. With these facts in position, the demand requires re-working deducting the simple sale of items, which are not connected to any service rendered by the appellant. The service tax liability will stand reduced to that extent.
Imposition of penalty - Sections 76, 77 and 78 of the Finance Act, 1994 - appellant submitted that the penalties under Sections 76 and 78, cannot be imposed for the same offence - Held that:- it is found that various judicial pronouncements have clarified that imposition of both the penalties on the same issue, is not legally tenable. Accordingly, penalty under Section 76 is set aside. Penalty under Section 78, will stand to the extent of service tax liability re-worked as above. Penalty under Section 77 is also upheld. - Decided partly in favour of appellant
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2015 (12) TMI 1566
Service tax liability - supply and installation of Metal Crash Barriers along the side of highways - Held that:- regarding the nature of service rendered by the appellant it is clear from the work order as well as the observations of the lower authorities that these are composite work involving supply of materials and provision of service. These are rightly to be categorized under works contract and the Hon’ble Supreme Court in the case of CCE, Kerala v. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT], held that prior to 1-6-2007 there is no charging section for levying service tax on works contract.
It is also found that the classification followed by the lower authorities is not sustainable. From the nature of work and the material involved it is clear that supplying and fixing Metal Crash Barriers along the highways cannot be considered as erection and commissioning of any plant and machinery or similar equipments. The Metal Crash Barriers are essentially part and parcel of highways and appellant’s plea that the exemption available to the construction of road will cover these structures also has much force. The Manual of Specifications and Standards for National Highways, issued by Government of India, Ministry of Shipping, Road Transport & Highways mentions Metal Beam Crash Barriers as one of the manufactured materials for use in the highways. Therefore, the impugned order is not sustainable. - Decided in favour of appellant with consequential relief
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2015 (12) TMI 1565
Whether the Cenvat Credit availed on manufacturing activity, can be utilized for discharging the deemed liability on payment made for technical know-how to the provider of service located outside India - Held that:- the issue is squarely covered by the precedent ruling of this Tribunal, in the case of Kansara Modler Ltd. Vs. CCE [2014 (1) TMI 1095 - CESTAT NEW DELHI], and the Hon’ble High Court of Punjab and Haryana in Nahar Industrial Pvt. Ltd. [2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT]. Accordingly, the appellant is the person, liable to pay service tax for the technical know-how, which is received from outside India, as such, he is provider of taxable service under Rule 2(r) and consequently, becomes output service provider under Rule 2(p) of CCR. Further, Rule 5 of Taxation of Service (Provided from Outside India & Received in India), Rules 2006, refers to availing of Cenvat Credit and not to utilization of credit. Accordingly, I hold that the Ld. Commissioner (Appeals) is in error in not treating the appellant as output service provider. Therefore, the impugned orders are set aside. - Decided in favour of appellant
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2015 (12) TMI 1559
Condonation of delay – challans evidencing payment of duty was missing - application to bank for duplicate copy and due to this reason delay in fling appeal – Held that: - the applicant had not taken any steps seriously. There is a gross negligence and inaction on the part of the applicant. So, there is no reason to condone the delay of filing appeal – appeal dismissed – decided against appellant.
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2015 (12) TMI 1558
Recovery of credit availed with interest – CENVAT credit - business auxiliary services – input services - Branches Sharing Expenses - Service Tax Group Resource Sharing Expenses – sister concerns - The sister concerns provide the required marketing support in connection with the manufacturing operations to the appellant company - service tax paid by sister concern accepted by the department – Held that: - The department cannot blow both hot and cold. When the department has accepted tax on the services provided by sister concerns to appellant, then they cannot deny credit saying that no services were rendered – denial of credit unjustified – appeal allowed – decided in favor of appellant.
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2015 (12) TMI 1555
Adjustment of excess paid service tax – rule 6(3) of STR, 1994 – change of rate of tax – short-payment of service tax – demand of tax, interest and penalty – alternative treatment advance payment of service tax - rule 6(1A) of STR, 1994 – Rules 4A and 4B of STR, 1994 - Held that: - when the assessee paid excess amount of tax to the exchequer, law of the land is very clear under Article 265 of the Constitution of India, which says that “No tax shall be levied or collected except by authority of law.” If Revenue becomes very rigid on strict compliance of the procedure every time and all the time, there could be situations where such rigidness and strictness on the part of the Revenue could become contrary to the provisions of the Article 265 of the Constitution of India. Thus, a liberal interpretation and generous view of these Rules needs to be taken. A combined and liberal view of the Rules is taken, whereunder the adjustment of the excess service tax paid would be allowed during the later period to the appellant assessee – appeal allowed – decided in favor of appellant.
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