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Service Tax - Case Laws
Showing 41 to 60 of 346 Records
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2018 (9) TMI 1661 - CESTAT CHENNAI
Reversal of CENVAT Credit - Prescribed formula - Since appellant were providing both taxable and exempted services, they opted for reversal of proportionate credit of service tax in terms of the formula given in Rule 6 (3A) of Cenvat Credit Rules, 2004 - reversal as per formula prescribed under Rule 6 (3A)(b)(iii) - Held that:- There is no dispute that the appellant has discharged the service tax liability on Financial Leasing Services by availing the exemption under N/N. 4/2006, dated 01.03.2006. The said notification specified that service tax is required to be paid on a value equal to 10% of the total amount representing interest. Balance 90% will enjoy exemption from payment of service tax.
For Financial Leasing Services under section 65 (105)(zm), there is no doubt that service tax is payable even though a part of it is exempted by the above notification. Since service tax is payable, the said service cannot be covered by the definition of “exempted services” - once it is concluded that the Financial Leasing Service is not an exempted service, there is no justification in considering the portion of the value of taxable service exempted vide N/N. 4/2006, dated 01.03.2006 to be included in the formula for determining the amount to be reversed.
Appellant has already reversed the Cenvat credit determined in terms of the above formula without including the portion of the value exempted under N/N. 4/2006 - there is no justification to order any further reversal.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1660 - CESTAT CHENNAI
Construction of Residential Complex Service - it was alleged that appellant had failed to file proper statutory half-yearly ST-3 returns with correct taxable value - demand alongwith interest and penalties - Held that:- The very same issue decided in the case of Ramalingam Construction Co.(P).Ltd. Vs. Commissioner of Central Excise& Service Tax, Salem [2018 (7) TMI 620 - CESTAT CHENNAI], where it was held that The periods of demand in all these disputes related to construction of residential complexes for KHB etc. spans from 2005 to 2015. There are merit in the appellant’s contention that demands on this score prior to 1.6.2007 is liable to be set aside in view of the decision of the Hon’ble Apex Court in CCE & CC Kerala Vs Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]. For the period subsequent to 1.6.2007, In a number of decisions, the higher appellate forums have consistently held that there is no liability to pay service tax for the reason that the complex so constructed are intended for personal use which is excluded in the definition of construction of residential complex.
Demand set aside - appeal dismissed - decided against Revenue.
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2018 (9) TMI 1659 - CESTAT CHENNAI
Rectification of mistake - case of applicant is that the Delhi Bench of the Tribunal has extended the benefit of Composition Scheme in the case of M/s. Vaishno Associates Vs Commissioner of Central Excise and Service tax, Jaipur-I [2018 (3) TMI 417 - CESTAT NEW DELHI] - Held that: The Tribunal, in the said decision has denied the benefit of the Composition Scheme as the appellant has failed to exercise the option under the relevant Rules - To a specific query from the Bench learned Advocate, admitted that the said decision of the Tribunal was not brought to the notice of the Bench during the hearing. In the circumstances, there is no ground for modification of the final order already issued.
Any such modification as prayed by the appellant would amount to review of the order already passed, which is not permissible under rectification of mistake application - Under ROM only such mistakes which are apparent from the record may be corrected.
ROM Application dismissed.
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2018 (9) TMI 1658 - CESTAT CHENNAI
Ascertainment of rate of Service Tax - taxable event - point of taxation rules - demand of differential service tax and interest under Section 73(1) and 75 of the Finance Act - case of respondent is that the rate of tax is the rate in force on the date of providing service and that the respondent had correctly paid the service tax - whether the appellant is liable to discharge service tax @2% or 4% on the service charges realized during the month of March, 2008?
Held that:- An identical issue has been decided by this very Bench of the Tribunal in the case of Commissioner of Service Tax, Chennai Vs. M/s. Consolidated Construction Consortium Ltd. [2018 (2) TMI 480 - CESTAT CHENNAI], where reliance placed on Hon'ble High Court of Gujarat in the case of Commissioner of Central Excise Vs. Schott Glass India Pvt. Ltd. [2009 (1) TMI 45 - HIGH COURT OF GUJARAT] has held that taxable event is the time of rendering the taxable service and not realization of payment thereof.
Appeal dismissed - decided against Revenue.
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2018 (9) TMI 1657 - CESTAT CHENNAI
Classification of services - appellant had outsourced their matrimony activity to other associate centers and had entered into franchise agreement with these associate centers - whether classified under Franchise service or under transfer of intellectual property service?
Held that:- The recital of the agreement in the first paragraph itself states that the appellant (formerly Bharatmatrimony.com) is referred as a franchisor and the associate member with whom the agreement is entered is referred to as the franchisee - it is not an agreement for mere transfer of intellectual property. In fact, the franchise agreement stipulates for payment of franchise fee charged by the franchisor upon the franchisee.
The argument of the ld. counsel that it involves only transfer of intellectual property cannot be accepted for the reason that the agreement involves conditions wherein the manner of functioning and operation of the associate center is laid down. Thus the franchisor has a right to dictate or direct how the franchisee has to carry on the business. There is also a condition for the franchisee to attend the training conducted by them - demand with interest upheld.
Time limitation - Held that:- The mere fact that audit was conducted cannot be a ground to contend that the extended period cannot be invoked. Further, in the present case, show cause notice is issued on 14.3.2008 for the period January 2006 to March 2007. The appellants have not disclosed in the ST-3 returns that they were engaged in franchise service - time limitation not applicable.
Penalty - Held that:- Taking note of the fact that the audit had occasion to see the agreement in 2006, the penalties are unwarranted and requires to be set aside.
Demand with interest upheld - penalty set aside - appeal allowed in part.
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2018 (9) TMI 1656 - CESTAT CHENNAI
Valuation - inclusion in assessable value - Threading charges - Negative Storage charges - case of appellant is that threading charges are nothing but cost of the film on which they have discharged VAT liability and Negative Storage Charges relate to reimbursement of electricity charges and rent recovered from the clients - Held that:- It is noted that right from the initial adjudication proceedings and even at this stage appellants have not been able to produce the necessary evidence in support of these claims. This being so, the demand confirmed by the original authority and upheld in the impugned order will sustain - demand upheld.
Penalty u/s 78 - Held that:- The entire issue is one of interpretation - It is also to be kept in mind that had the appellant been able to produce the necessary evidence, they may well have got relief in respect of service tax liability on Threading charges and Negative Storage charges - Penalty not warranted and is set aside.
Appeal allowed in part.
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2018 (9) TMI 1599 - BOMBAY HIGH COURT
Substantial question of law - Held that:- The questions as proposed do not give rise to any substantial questions of law as issue raised stand concluded by the decision of this Court in CST Vs. Kumar Beheray Rathi [2018 (2) TMI 1056 - BOMBAY HIGH COURT] - appeal dismissed.
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2018 (9) TMI 1598 - BOMBAY HIGH COURT
Classification of Services - Whether the service provided by M/s. Rochem AG Swizerland to the Respondent herein is covered under the “Intellectual Property Right Service' falling under Clause (zzr) of Section 65(105)? - Held that:- This question become academic as it is undisputed that the show cause notice has been issued on 1st February, 2010 seeking to recover service tax for the period 2007-08 - Supreme Court in the case of Commissioner of Customs, Mumbai Vs. B.V. Jewels [2004 (9) TMI 104 - SUPREME COURT OF INDIA], has held that where the Tribunal finds that the demand by the Revenue is barred by limitation. There is no need to go into the merits of the controversy - the question does not give rise to any substantial questions of law being academic. Thus not entertained.
Time Limitation - Whether the provisions of extended time period laid down in Section 73(i) are invokable in the present case? - Held that:- This question also not giving rise to any substantial question of law and is dismissed.
Appeal dismissed.
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2018 (9) TMI 1597 - CESTAT CHENNAI
CENVAT Credit - capita goods removed from outside the premises - removal from Stores to 290 exchanges - Rule 14 of the CCR 2004 read with proviso to Section 73 (1) of the Finance Act, 1994 - Held that:- The issue stands squarely covered by the decision in the appellant’s own case, in the case of BSNL Vs CCE Jaipur [2017 (5) TMI 896 - CESTAT NEW DELHI], where it was held that In the absence of any allegation of diversion of capital goods for other than intended purpose or their clearance to third party, the Revenue is not justified in denying credit on such capital goods which are admittedly installed and utilized for providing taxable output service - Demand do not sustain.
CENVAT Credit - duty paying documents - Rule 9 of CCR - reason for rejection is that post offices are not registered with the department and such Statements / bills / invoices raised by them do not become a valid document prescribed under Rule 9 - Held that:- Appellant has adduced proof of the Registration Certification No. TMPAS5321NST001 issued to the Senior Post Master, Head Post office, Trichy, copy of which has also been filed in pages 46-47 of the paper book. This being so, just because the registration certificate has not been mentioned in the TRC document issued by the Post Master, this by itself should not be a reason for denial of input service credit, especially when considering that all the other particulars required as per Rule 9 ibid have been indicated in all such documents - credit allowed.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1596 - CESTAT CHENNAI
Business Auxiliary services - commission paid to foreign agents for promotion and marketing of their products - Reverse charge mechanism - Held that:- In similar set of facts, in the case of M/S. J.P.P. MILLS PRIVATE LTD VERSUS COMMISSIONER OF CENTRAL EXCISE (APPEALS) , SALEM [2017 (10) TMI 750 - CESTAT CHENNAI], the Tribunal has considered the issue and held that the benefit of Notification 14/2004 dated 10.9.2004 is eligible for such activities - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1595 - CESTAT CHENNAI
Penalty - Interest - fraudulent availment of CENVAT credit - the appellant has reversed the credit before utilization - Held that:- The Hon’ble High Court of Madras in the case of Strategic Engineering P. Ltd. [2014 (11) TMI 89 - MADRAS HIGH COURT] has held that demand of interest and penalty cannot sustain when the credit has been reversed before utilization - in the present case, even before providing output service, the assessee has reversed the credit - demand of interest and penalty do not sustain - decided in favor of assessee.
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2018 (9) TMI 1594 - CESTAT CHENNAI
Non-compliance of predeposit - Demand of service tax on construction of residential complex - Held that:- During the stay application, the Tribunal has observed that the amount of ₹ 36,63,065/- deposited by the appellant is sufficient compliance of predeposit. We agree to the said observation by the Tribunal in the stay application and matter is remanded to the Commissioner (Appeals) to decide the issue on merits - appeal allowed by way of remand.
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2018 (9) TMI 1593 - CESTAT CHENNAI
Valuation - inclusion of reimbursable charges such as CFS charges, steamer agent charges, transport expenses etc. in the taxable value for the purpose of payment of service tax - Held that:- When department alleges specifically that the amount collected is reimbursable expenses, then at no stretch of imagination can the amount collected by appellant be considered as consideration for the service - On the issue whether the reimbursable expenses are to be included in the taxable value for discharging the service tax, the decision of Hon’ble Apex Court in the case of Intercontinental Consultants & Technocrats [2018 (3) TMI 357 - SUPREME COURT OF INDIA] would squarely apply, where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1592 - CESTAT CHENNAI
Valuation - inclusion of 70% of value towards material cost in assessable value - defence of the appellant was that they had already paid VAT on the remaining 70% of the gross charges - Department took a view that the goods used in providing the services are to be treated as inputs for providing the service and accordingly the cost of such inputs should form integral part of the taxable value of such services.
Held that:- The Hon’ble Apex Court in the landmark judgment Safety Retreading Co. (P) Ltd. Vs CCE Salem [2017 (1) TMI 1110 - SUPREME COURT] has unequivocally held that when the assesseee had paid tax under the State statute on the value component of material used, service tax would be exigible only on the remaining value of services provided - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1591 - CESTAT CHENNAI
Condonation of delay of 467 days in filing the appeal - case of appellant is that delay occurred due to the sudden illness of the staff looking after the service tax matters, who failed to bring it to the notice of the management about the impugned order - Held that:- It is also initially stated by him that they were not able to raise funds for making the predeposit. The delay of 467 days is very large and such explanations cannot be a ground for condoning the delay - thus, appellant has failed to put forward sufficient cause for condoning the huge delay of 467 days - delay cannot be condoned - COD application dismissed.
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2018 (9) TMI 1590 - CESTAT CHENNAI
Refund of Service Tax paid - case of appellant is that they have not been issued a show cause notice proposing to deny the refund claim - principles of natural justice - Held that:- A notice is a right of the party to enable him to know the grounds for rejection of the refund claim so as to arm himself to defend the case. It is the foundation of any lis in taxation proceedings. Without issuance of such show cause notice, the adjudicating authority has gone into the matter and rejected the refund claim. In appeal, Commissioner (Appeals) has upheld the same and also added a further ground for rejection.
The rejection of refund claim without issuance of show cause notice cannot sustain - appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1589 - CESTAT CHENNAI
Construction of Complex Service - construction of residential complex and Pondicherry University(PU) and appellant’s quarters made to CPWD/PD - Demand of Service Tax - Held that:- The decision of this Tribunal in M/s. Sima Engineering Constructions [2018 (5) TMI 405 - CESTAT CHENNAI] covers the issue where relaince placed in Nitesh Estates Vs. Commissioner of Central Excise [2015 (11) TMI 219 - CESTAT BANGALORE], where it was held that If the land owner enters into a contract with a promoter/builder/developer who himself provided service of design, planning and construction and if the property is used for personal use then such activity would not be subject to service tax - demand do not sustain.
Penalty - Tower Foundation for M/s. BSNL. under Commercial or Industrial Construction Service - the tax liability was paid up by the appellant albeit under another head, namely, CICS whereas the demand confirmed is under Works Contract Service - Held that:- Setting aside of penalty is judicious especially considering that the amount of tax liability was already paid up by the respondents.
Appeal dismissed - decided against Revenue.
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2018 (9) TMI 1588 - CESTAT CHENNAI
Business Auxiliary Service - incentives/brokerage received from shipping liners - Extended period of limitation - Held that:- In some of the instances, the assessee have collected profit/margin over and above the reimbursable expenses, but in most cases they have not collected it - this aspect requires verification - matter on remand.
Similarly, with regard to the disallowance of credit on input service, the same requires to be remanded to the adjudicating authority so as to give a further chance to the assessee to establish whether they are eligible for the credit on these input services.
Appeal allowed by way of remand.
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2018 (9) TMI 1587 - CESTAT CHENNAI
Levy of service tax on commission retained - case of appellant is that retaining the commission for the service rendered to foreign insurance companies has to be treated as amount received in convertible foreign exchange and, therefore, are export of services - whether the appellants are liable to pay service tax on the commission retained by them in Indian currency?
Held that:- In the appellant’s own case SUPRASESH GENERAL INSURANCE SERVICES & BROKERS PVT. LTD. VERSUS THE COMMISSIONER OF SERVICE TAX, CUSTOM, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL [2015 (9) TMI 1219 - MADRAS HIGH COURT], the very same issue was considered and the jurisdictional High Court has held the same in favour of the assessee.
Appeal allowed - decided in favor of appellant.
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2018 (9) TMI 1586 - CESTAT CHENNAI
Valuation - includibility - whether the electricity charges and air conditioning charges collected by the appellant on actual basis from the tenants is includible in the taxable value for discharging service tax under renting of immovable property? - Held that:- It is brought out from records that electricity charges and air conditioning charges are nothing but actual charges which are being reimbursed by the tenants - The decision of the Hon’ble Apex Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA] has held that such reimbursable charges cannot be included in the taxable value for the purpose of discharging service tax - appeal allowed - decided in favor of appellant.
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