|
Advanced Search Options
Service Tax - Case Laws
Showing 21 to 40 of 71 Records
-
2021 (2) TMI 853
Principles of Natural Justice - respondent herein has merely inform the petitioner that on verification of the records it was found that the petitioner was not registered for paying service tax - Construction of Residential Complex Service - HELD THAT:- There is no order that has been passed by the 3rd respondent for it to be quashed or set aside. It further appears the 3rd respondent sent several reminders to the petitioner on 26.2.2013, 04.03.2013 and thereafter issued summons to the petitioner. Meanwhile, the petitioner has furnished some of the details and has applied for a centralised registration on 13.1.2013 under the category for “Construction of Residential Complex Service”.
Since the petitioner is admittedly liable to tax and has obtained centralised registration, it is for the department to investigate and issue appropriate notice and in case there was non-payment of tax by the petitioner.
Petition dismissed.
-
2021 (2) TMI 836
Classification of services - Banking and other Financial Services or otherwise? - entire interest component collected as equated monthly installments on transactions relating to "Financial Leasing Services including equipment leasing and hire-purchase" - absence of any mechanism to bifurcate the processing or management charges - period prior to 01.03.2006 - HELD THAT:- Explanation 1 to section 67 of the Finance Act prior to 18.04.2006 contained a specific exclusion vide sub clause (viii) excluding interest on loans. Though section 67 was substituted by Finance Act 2006 w.e.f. 18.04.2006, the corresponding Service Tax Determination of Value Rules 2006 vide rule 6(2)(iv) again excluded interest on loan from the purview of valuation of taxable services. However, the Board vide circular No.80/10/2004-ST dated 17.09.2004 clarified that interest on loan would stand excluded. Respondent has been discharging service tax regularly on processing charges and also filing returns regularly. Respondent gives loan to its customers / borrowers for the purpose of hire purchase agreement for purchasing the vehicles and this lending is in the nature of a loan. Since it is in the nature of loan consequently interest on loans stands excluded from the value of taxable services. Board circular dated 09.07.2001 referred to by the appellant in fact supports the case of the respondent. In view of the settled law and in exercise of the legislative and rule making power once parliament has excluded interest on loans from the purview of taxable service, it is not open to the authority to hold that the exemption notifications would not apply.
Further in view of the decision of the Apex Court in the case of Association of Leasing and Financial Service Companies and Bajaj Auto Finance Ltd. [2010 (10) TMI 4 - SUPREME COURT] and [2008 (4) TMI 39 - SC ORDER] re-affirming the legal position that the respondent is not liable to pay service tax in respect of the interest on loan advanced as the same stands excluded from the purview of the taxable services, we find no reason to interfere with the impugned order.
CESTAT was correct in holding that for the period prior to 01.03.2006 interest on loan is not taxable in the absence of mechanism for bifurcation of service. Therefore, recovery of service tax on interest for the period to 01.03.2006 is without authority of law as there is a presumption of attributing the entire amount to interest in the absence of any mechanism to isolate the processing or management cost even if that were collected by way of equated monthly installments - CESTAT has returned a clear finding that hire purchase is but loan and that hirer obtains goods from the seller and the banking and financial institution finalised the purchase of the goods with the title firmly resting with the hirer with the financial institution vested with the right to acquire possession of the goods through judicial intervention - appellant has not been able to show any illegality or perversity in the aforesaid findings rendered by the CESTAT.
There are no error or infirmity in the view taken by the CESTAT qua the ground raised by the appellant. No question of law, much less any substantial question of law as pleaded by the appellant arises from the order of the CESTAT - appeal dismissed.
-
2021 (2) TMI 821
Levy of Service Tax - amount of liquidated damages/penalty collected by the appellant for non-compliance of the terms of the procurement contracts - amount collected towards theft charges from consumers for un-authorized use of electricity or for tampering of meters - period of dispute is from July, 2012 to March, 2016 - whether the appellant is providing a “declared service” contemplated under section 66E(e) of the Finance Act, which service became taxable w.e.f July 1, 2012? - HELD THAT:- Liability has been fastened upon the appellant under section 65B read with section 66E(e) of the Finance Act for the period from July 2012 till March 2016 for the reason that by collecting the said amount the appellant had agreed to the obligation to refrain from an act or to tolerate the non-performance of the terms of the contract by the other party - Section 65B (44) defines ‘service’ to mean any activity carried out by a person for another person for consideration, and includes a declared service. Under section 66E (e), a declared service shall constitute agreeing to the obligation to refrain from an act, or to tolerate an act or situation, or to do an act. Section 66 B provides that service tax shall be levied at the rate of 12 per cent on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed. Section 66D contains a negative list of services, while section 66E contains a list of declared services.
Section 68 provides that every person providing taxable service to any person shall pay service tax at the rate specified in section 66B in such manner and within such period as may be prescribed - It is, thus, clear that where service tax is chargeable on any taxable service with reference to its value, then such value shall be determined in the manner provided for in (i), (ii) or (iii) of subsection (1) of section 67. What needs to be noted is that each of these refer to “where the provision of service is for a consideration”, whether it be in the form of money, or not wholly or partly consisting of money, or where it is not ascertainable. In either of the cases, there has to be a “consideration” for the provision of such service. Explanation to sub-section (1) of section 67 clearly provides that only an amount that is payable for the taxable service will be considered as “consideration”. This apart, what is important to note is that the term “consideration” is couched in an “inclusive” definition.
This precise issue was considered by a Division Bench of this Tribunal in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] wherein certain clauses providing penalty for non-observance/breach of the terms of the contract entered during the course of business came up for consideration. The case of Department was that the amount collected by the appellant towards compensation/penalty was taxable as a " declared service" under section 66E(e) of the Finance Act. After considering the decision of a Larger Bench of the Tribunal in M/S BHAYANA BUILDERS (P) LTD. & OTHERS VERSUS CST, DELHI & OTHERS. [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] and the decisions of the Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT]and UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] where it was held that What follows from the aforesaid decisions of the Supreme Court in Bhayana Builders and Intercontinental Consultants, and the decision of the Larger Bench of the Tribunal in Bhayana Builders is that “consideration” must flow from the service recipient to the service provider and should accrue to the benefit of the service provider and that the amount charged has necessarily to be a consideration for the taxable service provided under the Finance Act. Any amount charged which has no nexus with the taxable service and is not a consideration for the service provided does not become part of the value which is taxable. It should also be remembered that there is marked distinction between “conditions to a contract” and “considerations for the contract”. A service recipient may be required to fulfil certain conditions contained in the contract but that would not necessarily mean that this value would form part of the value of taxable services that are provided.”
The issue that arose for consideration in M/S LEMON TREE HOTEL VERSUS COMMISSIONER, GOODS & SERVICE TAX, CENTRAL EXCISE & CUSTOM [2019 (7) TMI 767 - CESTAT NEW DELHI] was whether forfeiture of the amount received by a hotel from a customer on cancellation of the booking would be leviable to service tax under section 66E(e). The Tribunal held that the retention of the amount on cancellation would not attract service tax under section 66E (e).
Learned Authorized Representative has, however, referred to the decision of the Delhi High Court in XL ENERGY LIMITED VERSUS MAHANAGAR TELEPHONE NIGAM LIMITED.[2018 (5) TMI 2036 - DELHI HIGH COURT]. This decision refers to the decision of the Supreme Court in Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd., which in turn referred to a decision of the Supreme Court in Fateh Chand. The decision of the Supreme Court in Fateh Chand was also relied upon by learned Authorized Representative of the Department in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] but it was found not to applicable to the facts of the case. Likewise, the decision of the Delhi High Court in XL ENERGY LIMITED VERSUS MAHANAGAR TELEPHONE NIGAM LIMITED, would not help the Department.
Thus, it is not possible to sustain the order passed by the Principal Commissioner confirming the demand of service tax on the amount collected towards liquidated damages and theft of electricity - appeal allowed.
-
2021 (2) TMI 814
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Procedural irregularity - Substantial right - Amnesty Scheme seeking waiver of interest and penalty - Rule 6A of the CESTAT (Procedure) Rules, 1982 - HELD THAT:- From the reading of the Rule, it is evident that with respect of one order, single appeal irrespective of number of show cause notices may be filed. The petitioners undisputedly had filed single appeal with respect to more than one show cause notices. Filing of appeal before Tribunal is a substantial right whereas filing of declaration under Amnesty Scheme is mere procedural formality as declaration is maintainable if eligibility conditions are complied with which are enumerated under Section 123 to 125 of the Finance Act, 2019. Indubitably, the petitioners are complying with all the eligibility conditions. Thus, the Petitioners cannot be denied the relief claimed.
The intention of legislature cannot be gone into if language is plain and unambiguous especially in taxation matters. The scheme in question is not a piece of taxation legislation, instead, it is a piece of beneficial legislation for Union as well dealers/assessee. The Government is getting revenue without litigation and assessee is getting immunity from partial tax liability as well as interest and penalty, thus there is win-win situation for both sides. The Amnesty Scheme was launched to minimize litigation and respondent seems to unnecessarily dragging the matter. The hyper technical approach of the officials/authorities is contrary to the intent and purport of the beneficial scheme and the mandate of the Parliament. The Finance Act has excluded various categories of persons from the scheme and it is undisputed that petitioners fall within category of eligible persons.
It is settled law even under taxation that if a person is eligible to one or another benefit, he should not be denied said benefit on procedural or technical grounds. The requirement of strict compliance of conditions is necessary to ascertain eligibility, however procedural formalities need not to be strictly complied with. Filing of one or more declarations has been prescribed by Rules whereas conditions of eligibility have been prescribed by Finance Act, 2019. The filing of separate declaration is not even condition whereas it is sort of procedure. Once an assessee complies with conditions prescribed by Finance Act, 2019 and no prejudice is caused to the revenue by filing of single declaration instead of multiple, there is no reason to deny benefit on the ground of non-compliance of any condition which is purely procedural in nature.
In the present case, no prejudice has been or would be caused to the Revenue and if at all, severe prejudice would be caused to the petitioner in case his prayer is not accepted, in the light of the object of the Amnesty Scheme by permitting adoption of hyper technical approach.
Petition allowed - decided in favor of appellant.
-
2021 (2) TMI 808
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - eligibility of the petitioner or maintainability of his declaration to avail the benefits of the scheme under the category of investigation, enquiry or audit on the ground that the service tax dues of the petitioner for the related period was not quantified on or before 30th June, 2019 - HELD THAT:-All that would be required for being eligible under the above category is a written communication which will mean a written communication of the amount of duty payable including a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit. For eligibility under the scheme, the quantification need not be on completion of investigation by issuing show-cause notice or the amount that may be determined upon adjudication.
The issue is no more res-integra as decided in the case of THOUGHT BLURB VERSUS UNION OF INDIA AND ORS. [2020 (10) TMI 1135 - BOMBAY HIGH COURT] where it was held that there are no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019.
When there is a provision for granting personal hearing in a case where the declarant disputes the estimated amount, it would be in complete defiance of logic and contrary to the very object of the scheme to reject a declaration on the ground of being ineligible without giving a chance to the declarant to explain as to why its declaration should be accepted and relief under the scheme be extended to him.
Matter remitted back to the respondents (designated authority) to consider the declaration of the petitioner dated 08.12.2019 afresh as a valid declaration in terms of the scheme under the category of investigation, inquiry and audit and thereafter grant the consequential relief(s) to the petitioner. While doing so, respondent No.1 shall provide an opportunity of hearing to the petitioner and thereafter pass a speaking order with due communication to the petitioner - petition allowed by way of remand.
-
2021 (2) TMI 801
Benefit of SVLDRS - Credit of amount deposited prior to SCN towards Interest - Levy of Service Tax - Supply of Tangible Goods Services - petitioner had not obtained a registration - period April 2008 to March 2013 - extended period of limitation - HELD THAT:- Sub-Section (2) to Section 124 states that the relief computed under Sub- Section (1) shall be subject to the condition that any amount paid as pre-deposit at any stage of appellate proceedings under an indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the final settlement.
In the present case, the petitioner has, admittedly, remitted amounts of ₹ 66.05 and ₹ 16.58 lakhs as deposits even prior to the issuance of show cause notice. However, the petitioner has specifically demarcated the amount of ₹ 66.05 lakhs as towards tax and ₹ 16.58 lakhs as towards interest. Thus the respondent, while accepting the eligibility of the petitioner to the benefit of the Scheme, has proceeded to ignore the amount of ₹ 16.58 lakhs, since the amount has been credited under the accounting head relevant for interest payments.
Interestingly, had the declaration filed by the petitioner been accepted, there would have been a total waiver of interest liability, as per the Scheme. Thus if only petitioner had remitted the entire amount of ₹ 82,63,340/- (₹ 66.05 plus ₹ 16.58 lakhs) towards tax, the respondent would have simply given credit to the entire amount, waiving interest liability in full. It is the apportionment that has given rise to the present situation and the petitioner must not be made to suffer on account of this, irrelevant fact - Learned counsel for the petitioner points out that the amount pending payment under the declaration is liable to be paid within 30 days of receipt of the declaration. Since the petitioner has enjoyed an order of interim stay during the pendency of this writ petition, the period of 30 days for effecting payment will start today.
Petition allowed.
-
2021 (2) TMI 790
Levy of penalty u/s 78 of the Finance Act, 1994 - demand of service tax on Construction of Complex Service (CCS) for the period from 2006-07 to 2009-10 - residential apartments constructed by the appellant - tripartite agreement - HELD THAT:- A perusal of the documents placed on record would indicate that the appellant was involved in providing taxable service under the category of Construction of Complex Service (CCS), which included construction of residential complex as well on account of the appellant having constructed semi-finished flats/villas by the time of the commencement of the National Games in 2002. This semi-finished job required further construction in order to complete the same into residential flats/villas, which was undertaken by the appellant under construction agreements with the respective owners/customers, which clearly brings the scope of the above work out of the purview of the exclusion clause under Section 65(91a) of the Finance Act, 1994 since the residential complex was never intended for the personal use of the appellant. But the law requires that such complex shall not be constructed by a person directly engaging any other person for designing or planning of the layout, which according to us stands satisfied here since the Revenue has nowhere flagged any objections on the satisfaction of this requirement of law - the demand do not sustain.
Works Contract Service - HELD THAT:- The appellant as a builder was expected to put up partial construction as per plan which thereafter, i.e., after sale, was required to be completed. Hence, we find that the appellant was required to undertake a host of activities to ensure completion of the project before handing over possession - the demand cannot sustain.
Demand of Service Tax on pipe laying and pipe laying civil works at MCGM-TANSA Pipeline - HELD THAT:- Revenue is not able to establish that this is a commercial or industrial project. Hence, we agree with the appellant’s contentions that the demand on this count cannot sustain.
Penalty under Section 78 - HELD THAT:- As per first proviso to Sub-section (1) of Section 78 of the Act, no penalty shall be imposable for any failure referred to in the said Provision viz., for failure to pay service tax, for contravention of Rules and Provisions of the Act, or for suppression of facts etc., if the assessee proves that there was reasonable cause for such failure.
From the facts available on record, it is noticed that entire facts were available on record and on this there is no dispute; nor is there any contrary finding by the adjudicating authority. The entire dispute arose, as pleaded by the appellant, on account of wrong interpretation/understanding of the provisions of the Act and the lower authority has not disputed the bona fide pleadings of the appellant. But the penalty is levied as if it is automatic. However, it can hardly be said that there was evasion, much less wilful evasion, to pay tax or not to comply with the provisions of the Act - there was no justification for imposition of penalty, especially when there was no allegation of fraud, mis- representation, etc. Accordingly, the penalty imposed on the appellant shall stand deleted.
Appeal allowed - decided in favor of appellant.
-
2021 (2) TMI 774
Taxability - Construction services or not - construction service to the Government of Madhya Pradesh through the nodal agency - Madhya Pradesh State Cooperative Marketing Federation Ltd. (MP MARKFED), being funded by the Government of India towards Drought Mitigation Scheme - service provided to the State Government - refund of service tax paid erroneously - time limitation under Section 11B of the Central Excise Act - HELD THAT:- In view of the difference of opinion, the following question arise for consideration by learned 3rd Member:
(1) Whether the limitation prescribed under Section 11B of the Central Excise Act will not be applicable as the tax was paid erroneously though eligible to exemption and as such is in the nature of deposit and hence limitation is not attracted as held by Member (Judicial) following the ruling of Hon’ble Karnataka High Court in COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [2012 (7) TMI 22 - KARNATAKA HIGH COURT] affirmed by Hon’ble Supreme Court in COMMISSIONER VERSUS KVR CONSTRUCTION [2011 (7) TMI 1334 - SC ORDER].
OR
Limitation prescribed under Section 11B is applicable as held by Member (Technical) in view of the ruling of Hon’ble Supreme Court in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [1996 (12) TMI 50 - SUPREME COURT].
Registry is directed to put up the appeal record before Hon’ble President for nomination of 3rd member to consider the aforesaid questions and difference of opinion for his opinion.
-
2021 (2) TMI 772
Refund of excess paid service tax - time limitation - date of deposit of tax vis-å-vis date of filing of refund claim in terms of Section 11B of the Central Excise Act, 1994 - HELD THAT:- On reading of Section 11B of Central Excise Act 1944, It is found that any person claiming refund must make an application for refund before the expiry of one year from the date of payment of tax and not from any other date. The clock for one year would start ticking from the date on which the appellant has paid the tax. Thus plain reading of the provisions of section 11B; it is found that the claim is not time barred as the appellant had filed refund claim within one year from the date of payment of tax.
As per decision of the tribunal in the case of DURALINE INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA [2008 (9) TMI 295 - CESTAT MUMBAI] the date of refund claim shall be reckoned from the date when the refund application was originally filed, not from the date when defects pointed out by the department and were cured by the appellant.
Thus, the amount excess paid in May, 2010 is in the nature of Revenue deposit. Further, there is no limitation for refund of Revenue deposit. In this view of the matter it is held that the refund claim is not barred by limitation. It is also found that the tax was paid through CENVAT credit account and not through cash challans. The excess amount of duty liable to be re-credited in the CENVAT credit Account as the Appellant cannot be given liberty to encash accumulated CENVAT credit bypassing Rule 5 of CENVAT Credit Rules, 2004. Accordingly, I direct the Adjudicating Authority to grant the refund of the said amount of ₹ 9,92,929/- and to be re-credited in the CENVAT credit Account.
Appeal allowed - decided in favor of appellant.
-
2021 (2) TMI 768
Inquiry proceedings under Service Tax - apprehension of arrest - Seeking stay of proceedings and consequential penal action, initiated against the petitioners pursuant to issuance of summons - Section 83 of the Finance Act, 1994 read with Section 14 of the Central Excise Act, 1944 - HELD THAT:- Though the Central Excise Act and the Finance Act, 1994 to the extent of Chapter V of the said Act have been repealed, sub-section (2) of section 174 states that the aforesaid action shall not affect any investigation, inquiry, verification (including scrutiny and audit) assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, service charge, penalty, fine etc. and other legal proceedings or recovery of arrears or remedy as may be instituted, continued or enforced and any such tax may be levied or imposed as if the aforesaid acts had not been so amended or repealed. Thus it is evident that respondent No.2 has power and authority to issue summons to the petitioners and more specifically petitioner No.2 under the provisions of the aforementioned statutes to give evidence and produce the relevant documents in inquiry.
The power to summon persons to give evidence and produce documents in inquiry is a statutory function regulated by the aforementioned provisions of the statutes. Sub-sections (1) and (2) of Section 14 of the Central Excise Act state that summons to produce documents or other things in the possession of or under the control of the person summoned can be issued by an officer duly empowered by the Central Government and all persons so summoned shall be bound to attend and state the truth upon any subject respecting which they are examined or make statements or to produce such documents and other things as may be called upon. Sub-section (3) of section 14 states that every such inquiry as aforesaid shall be deemed to be a judicial proceedings within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 -
On a thorough reading of the summons dated 12.10.2020 and 13.11.2020 it is clear that the summons have been issued to petitioner No.2 calling upon him to tender oral evidence and produce documents or things which have been specified in the summons. The summons clearly state that an inquiry in connection with GST under the CGST Act, 2017 is being undertaken by the Superintendent / Appraiser / Senior Intelligence Officer and that the attendance of petitioner No.2 is considered necessary to give evidence and produce documents. Perusal of the summons signify that there is no threat of arrest as perceived and argued by the petitioners / petitioner No.2. This is buttressed by the fact that under section 70 of the CGST Act tendering of evidence or production of document is to be done in the same manner as done by a civil court under the provisions of the Civil Procedure Code, 1908. The summons specifically call upon the petitioner to tender evidence and produce documents and clarification as stated in the summons dated 12.10.2020.
There is a clear mandate on the petitioner No.2 to honour the summons and present himself in the inquiry undertaken in connection with evasion of GST under the CGST Act by the investigating officer. The summons do not state that the petitioner No.2 shall be liable for arrest or will be arrested as the statutory provisions under which the summons have been issued pertain to investigation undertaken by the statutory officer. Hence there is no reason for the petitioners to assume that the petitioner No.2 on presenting himself before the investigating officer will be arrested or apprehended. The inquiry which is undertaken by respondent No.2 is a statutory inquiry pertaining to evasion of GST under the CGST Act wherein the petitioner No.2 has been called upon to tender his oral evidence as also to produce the documents that may be required for the purpose of completing the inquiry by the investigating officer. Petitioners’ apprehension that petitioner No.2 will be apprehended / arrested / incriminated since the inquiry pertains to evasion of service tax / GST is not well founded. The summons dated 12.10.2020 makes it succinctly clear that the petitioners are required to tender oral evidence and produce certain documents. Investigation is under way pursuant to the raid which was carried out at the premises of the petitioners on 03.04.2019 and seizure of the material and documents by the authority. It is therefore incumbent upon the petitioners to cooperate in the investigation / GST inquiry - the summons issued to the petitioners / petitioner No.2, does not authorize the investigating officer to arrest petitioner No.2, but have been issued only for the purpose of completing the investigation into evasion of GST undertaken by respondent No.2. In this view of the matter, we do not see any reason for the petitioners / petitioner No.2 to apprehend arrest on presenting himself before the investigating officer in response to the summons which have been issued to the petitioners.
The summons issued to the petitioners / petitioner No.2 on 12.10.2020 and 13.11.2020 are valid and no interference is called upon - it is directed that petitioner shall remain present before the concerned investigating officer / authority in the office of the Directorate General of GST Intelligence, Mumbai Zonal Unit, NTC House, 3rd Floor, N.M. Road, Ballad Estate, Mumbai - 400 001 on 1st March 2021 at 11:00 a.m. for the purpose of inquiry and thereafter as and when required. If the petitioners cooperate in the investigation, respondents shall not take any coercive steps against the petitioners - petition disposed off.
-
2021 (2) TMI 712
Condonation of inordinate delay in filing the appeals - no reason produced or such delay - HELD THAT:- There are no cogent reason for such inordinate delay in filing the appeals before the Tribunal. Mere filing of an application signed by Authorized Signatory of the appellant company does not serve the purpose for condoning such delay, wherein no plausible reason has been mentioned in the application for such an excessive delay.
In the absence of any justifiable reason, the present Miscellaneous Applications (COD) do not sustain - Application dismissed.
-
2021 (2) TMI 704
Nature of activity - service or manufacturing? - Design Services or not - allegation is that appellant failed to pay service tax on gross amount received by them by way of suppressing the value of services willfully with intent to evade payment of Service Tax - contravention of provisions of Section 68,69 & 70 of the Finance Act 1994, as amended read with Rules 4,6 & 7 of the Service Tax Rules 1994 - HELD THAT:- It is on records that the designs/ drawings of the die/moulds etc. (tooling for manufacturing final Products) are being provided by the overseas buyers of the appellants and upon manufacturing of said tooling kits the appellants have realized charges from their overseas buyers. From the foregoing, it transpires that, the appellants have, in fact not designed the tooling kits or made drawings for the same. They have only manufactured the tooling kits as per the drawings provided by their overseas buyers and the same tolling kit is thereafter used for the manufacture of dutiable forgings which are to be sold to the same overseas buyers. The prime activity of the appellants is manufacturing and as per the agreement/contract/ purchase order, they have to manufacture goods only as per the specification of their buyers and the design of the said goods is also very specific. To meet out the requirements of their buyer they first manufacture the tooling kit for the production of goods and they charge the manufacturing cost of the tooling kit in the head of "Die design & preparation charges". From the records it appears that, the appellants themselves not design the said tooling kit but they only manufacture the same on the basis of drawings provided by their customers.
Further, it is found that the period of demand starts from 2014-15 onwards, whereas, prior to 01.07.2012 the classification was being done as per the provisions of Section 65A read with Section 65(105} of the Finance Act, 1994. However, the earlier method of classification was done away w.e.f, 01.07.2012 and negative list regime has came in to existence wherein service has been defined as any activity for consideration (Section 65B of the Act) and there remains no categorization of service. All the activities for consideration were held to be service except those which specifically mentioned in the "negative list" in terms of Section 66D of the Finance Act - classification of the impugned activities had been done under earlier Section 65(105)(zzzzd) of the Finance Act, 1994 read with Section 65A of the Act. Whereas, the said statute has lost its existence w.e.f, 01.07.2012 and in absence of proper legal backing, the classification done in the instant cases for the period from 2014-15 onwards and demand of service tax thereof cannot be held as legal and proper.
The impugned activities cannot be termed as "service" rather manufacturing. Hence, the demand of service tax in the instant cases does not sustain - Appeal allowed - decided in favor of appellant.
-
2021 (2) TMI 564
Valuation - scope of the term 'consideration' - inclusion of cost of free supply diesel made by M/s ONGC in the value of taxable service for running the drilling vessel - HELD THAT:- The period of dispute involved in this case is from December 2010 to December 2015. The provisions of valuation of taxable services for charging service tax are contained in Section 67 ibid. The said statutory provision has defined the term ‘consideration’, to include any amount that is payable for the taxable services provided or to be provided for provision of taxable service. Section 67 ibid was amended by the Finance Act, 2015 (20 of 2015), w.e.f. 14.05.2015. The effect of amendment was that subclauses (ii) and (iii) were inserted in clause (a) in the definition of consideration contained in the explanation part appended to Section 67 ibid. The amended provisions include inter alia, any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, subject to the fulfilment of the prescribed conditions.
In the present case, it is an admitted fact on record that the appellant had never charged any cost of fuel to M/s. ONGC over and above the amount claimed by it for providing the taxable service. Since, M/s. ONGC was not required to make payment of fuel to the appellant, its value cannot be added to the taxable value both under the un-amended and amended provisions of Section 67 ibid - Further, the appellant herein had received the entire consideration for provision of service in monetary terms. Hence, it cannot be said that it was not properly able to determine the value of taxable service, in order to attract the provisions of Rule 3 (b) of the Service Tax (Determination of Value) Rules, 2006. Similarly, the provisions of Rule 5 ibid also would not attract in this case inasmuch as no cost of fuel was charged or billed by the appellant to the recipient of service.
Appeal allowed - decided in favor of appellant.
-
2021 (2) TMI 515
Rejection of declaration under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - eligibility of the petitioner or maintainability of his declaration to avail the benefits of the scheme under the category of investigation, enquiry or audit - quantification of the service tax dues of the petitioner for the related period was not quantified on or before 30th June, 2019 - HELD THAT:- The issue decided in the case of THOUGHT BLURB VERSUS UNION OF INDIA AND ORS. [2020 (10) TMI 1135 - BOMBAY HIGH COURT] where it was held that On the one hand there is a letter of respondent No.3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at ₹ 47,44,937.00 which quantification is before the cut off date of 30th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No.3 admitting service tax liability for an amount of ₹ 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner’s tax dues were quantified on or before 30th June, 2019, there are no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019.
The object of the scheme is to encourage persons to go for settlement who had bonafidely declared outstanding tax dues prior to the cut off date of 30.06.2019. The fact that there could be discrepancy in the figure of tax dues admitted by the person concerned prior to 30.06.2019 and subsequently quantified by the departmental authorities would not be material to determine eligibility in terms of the scheme under the category of inquiry, investigation or audit. What is relevant is admission of tax dues or duty liability by the declarant before the cut off date. Of course the figure or quantum admitted must have some resemblance to the actual dues. In our view, petitioner had fulfilled the said requirement and therefore he was eligible to make the declaration in terms of the scheme under the aforesaid category. Rejection of his declaration therefore on the ground of ineligibility is not justified.
Matter remanded back to respondent No.1 to consider the declaration of the petitioner dated 24.12.2019 afresh as a valid declaration in terms of the scheme under the category of investigation, inquiry and audit and thereafter grant the consequential relief(s) to the petitioner - appeal allowed by way of remand.
-
2021 (2) TMI 514
Jurisdiction to impose penalty - Levy of late fee payable under Rule 7C of the Service Tax Rules, 1994 - submission of petitioner is that late fee was imposed beyond the scope of the Show Cause Notice cannot be countenanced in as much as the returns were filed belatedly by the petitioner after the issuance of Show Cause Notice - HELD THAT:- If the Petitioner had filed its periodical returns under Section 70 of the Finance Act, 1994 read with Rule 7C of the Service Tax Rules, 1994 belatedly prior to the issue show cause notice and if there was a deficit in the payment of late fee and if no proposal was made in the show cause notice to recover such late fee, the arguments of the learned counsel for the petitioner can be considered. Therefore, it would be incorrect to state that the first respondent Settlement Commission was not justified and asking the petitioner to pay a late fee of ₹ 1,46,000/- for delayed filing of returns while passing the impugned order.
Further, before the Settlement Commission, the petitioner had prayed for waiver of late fee as the petitioner was facing the extreme financial constraints. In the alternative, the petitioner prayed for time to pay the late fee. Since the petitioner himself offered to pay the late fee of ₹ 1,28,000/- instead of ₹ 1,66,000/- as was demanded by the respondents, there is no justification in this Writ Petition - Further, under the Scheme of Section 32F of the Central Excise Act, 1944 as made applicable for settling of cases under the Finance Act, 1994, it is to be observed that every order passed by the Settlement Commission is final and conclusive and therefore such orders of the Settlement Commission cannot be interfered. Unless the order passed by the Settlement Commission is contrary to the provisions of the Act, it cannot challenged.
The Court while exercising its jurisdiction under Article 226 of the Constitution of India is also not concerned with the correctness or otherwise of the decision arrived by the Settlement Commission or Tribunal whose orders are challenged before it unless there is perversity in the order impugned before it or there was a material irregularity in the procedure followed by such Tribunal while passing the order impugned before it which had caused prejudice to the petitioner or there was a violation of Principles of Natural Justice. The petitioner has not made out a case for any interference as the petitioner himself agreed to pay the late fee of ₹ 1,28,000/- before the first respondent Settlement Commission - petition dismissed.
-
2021 (2) TMI 513
Extended period of limitation - demand under the head maintenance and repair of computer software - validity of circular dated 17.12.2003 - Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the demand is raised beyond the normal period of limitation, resulting in undue gains to the Respondent? - HELD THAT:- Admittedly as per the stand taken by the respondent themselves before the High Court of Madras, it is evident that activity of maintenance of computer software was exempt from the provisions of the Act prior to 2006. We are in agreement with the view taken by the High court of Madras in KASTURI & SONS LTD, CHENNAI VERSUS UNION OF INDIA & OTHERS [2011 (2) TMI 76 - HIGH COURT OF MADRAS], where it was held that There was no occasion to consider the implications of the Finance Act 2003 to 2006 in respect of the terms 'information technology' and 'maintenance of software' and the decision rendered in Tata Consultancy Service v. State of Andhra Pradesh [2004 -TMI - 4143 - Supreme Court] in the context of the said Act under Entry 54, List-II of VII Schedule to the Constitution cannot be cited for a clarification in respect of the Finance Act, 1994 which is a Parliamentary enactment.
It is pertinent to mention here, that in the show cause notice itself no allegations of fraud collusion, misstatement or suppression of facts have been stated against the respondent, therefore, the demand is barred by limitation under Section 73 of the Finance Act, 1994 as well.
The substantial questions of law are answered in against the appellant and favour of the respondent - Appeal dismissed.
-
2021 (2) TMI 512
Refund claim of excess paid - Denial on the ground of time limitation - Section 11B of Central Excise Act, 1944 - unjust enrichment - HELD THAT:- The facts in the present case is not under dispute that the appellant have paid the excess service tax during the quarter April to June, 2017, however, the appellant under bona fide belief transferred the said excess paid service tax into their TRANS-1 as balance in personal ledger account. Subsequently, on objection raised by the GST department the appellant have reversed the said amount and also paid an interest of ₹ 52,256/- on 27.02.2019. In these peculiar circumstances, it is found that since the appellant has transferred the amount of excess paid service tax in the TRANS-1 and same was reversed on 27.02.2019, therefore till the date up to 27.02.2019 there is no cause for claiming refund of this amount. The refund is arising only after the appellant reversed the amount on 27.02.2019. The refund was admittedly filed on 05.04.2019 i.e well within the prescribed time limit of 1 year in terms of section 11B. Therefore, the refund was filed well within the time.
Principles of Natural Justice - HELD THAT:- As submitted by the Learned Authorized Representative the issue of unjust enrichment need to be verified at the time when the refund is to be granted to the assessee. Therefore in the present case also though the refund is not hit by limitation but the fact that whether the incidence of the refund amount has been passed on or otherwise needs to be examined by the sanctioning authority.
The matter is remanded to the adjudicating authority to only verify the unjust enrichment and accordingly, to dispose of the refund claim of the appellant - appeal allowed by way of remand.
-
2021 (2) TMI 499
Rejection of declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - seeking a direction to the said respondent to reconsider the declaration of the petitioner - eligibility of a declarant for making a declaration in terms of the scheme under the category of ‘investigation, enquiry or audit’ or maintainability of such a declaration - amount of tax dues was not quantified on or before 30.06.2019 - HELD THAT:- All that would be required for being eligible in terms of the scheme under the above category is a written communication which will mean a written communication of the amount of duty payable including a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit. For eligibility under the scheme, the quantification need not be on completion of investigation by issuing show-cause notice or the amount that may be determined upon adjudication.
The issue is no longer res integra and decided in the case of THOUGHT BLURB VERSUS UNION OF INDIA AND ORS. [2020 (10) TMI 1135 - BOMBAY HIGH COURT] where it was held that there are no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019.
Reverting back to the facts of the present case, it is found that in the course of the investigation, statement of Shri. Nipun Radhu, authorized representative of the petitioner was recorded on 26.11.2018 by the Senior Intelligence Officer in the office of DGGI. The statement was recorded under section 83 of Chapter V of the Finance Act, 1994 read with section 14 of the Central Excise Act, 1944 as well as under the provisions of the CGST Act, 2017. In the course of his statement, the authorized representative acknowledged that service tax liability of the petitioner for the year 2016-17 was to the tune of ₹ 1,61,01,194.00 and for the year 2017-18 (upto June, 2018), the service tax liability was to the extent of ₹ 14,60,823.00. This admission was reiterated by Shri. Nipun Radhu in his subsequent statement recorded on 13.03.2019. Both the statements were made prior to the cut-off date of 30.06.2019. Therefore, petitioner was clearly eligible to file a declaration in terms of the scheme under the category of investigation, enquiry or audit - Also, it is a well settled principle of natural justice that if an authority relies upon a document which is adverse to the person concerned and results in an adverse decision, copy of such a document is required to be furnished to the person concerned so that he can put up an effective defence. Devoid of the same, any personal hearing granted would be an empty formality.
The matter remanded back to respondent No.5 to consider the declaration of the petitioner afresh in terms of the scheme as a valid declaration under the category of ‘investigation, enquiry or audit’ and grant the consequential relief to the petitioner - petition allowed by way of remand.
-
2021 (2) TMI 494
Levy of penalty u/s 78 of the Finance Act, 1994 - construction of complex service - Correctness of the findings - HELD THAT:- The Adjudicating Authority as well as the Tribunal committed a fundamental error while appreciating the factual position. It is not in dispute that the assessee did not separately collect service tax from its buyers/clients. Their consistent stand was that they have collected advance amount from their clients, who have booked the apartment for the purpose of construction of residential complexes and after 16.06.2005, they had not collected/realised any amount from their clients separately towards service tax. This factual position has been noted and admitted by the Adjudicating Authority while issuing the show cause notice dated 19.04.2007, as could be seen from paragraph 11(iv) of the show cause notice - Unfortunately, the Adjudicating Authority did not examine this factual position for its correctness, but proceeded on the basis as if the assessee collected service tax separately, did not remit it to the Department, on the contrary filed Nil return.
Uncertainty in the implementation of the law - HELD THAT:- For the first time, this particular service was brought within the service tax net with effect from 16.06.2005. The service tax was introduced by amendments to Finance Act, 1994 with effect from from 10.09.2004. The legislation was at its nascent stage. There were several interpretations to the new law and uncertainty loomed even with the Department. This submission made by the assessee was not considered by the Adjudicating Authority. In fact, the assessee stated that as soon as the Department had advised them, they had remitted the entire amount along with interest. This was much prior to the issuance of show cause notice.
The first appellate authority did not render any independent finding, but chose to interfere with the order of the Adjudicating Authority by deleting the penalty under Sections 76 and 77 of the Act. No independent reasons have been given by the first appellate authority to confirm the penalty under Section 78 of the Act. When the matter went before the Tribunal, no attempt has been made to examine the facts of the case and the Tribunal also was of the view that the assessee had separately collected the service tax and not remitted to the Department, but filed Nil return. This being contrary to facts, both the authorities and the Tribunal committed error in levying/confirming the penalty under Section 78 of the Act.
The substantial question of law is answered in favour of the assessee - Appeal allowed - decided in favor of appellant.
-
2021 (2) TMI 487
Levy of service tax - Tour operator service - respondent is engaged in providing package tours to domestic destination as well as international tourist spots - reverse charge mechanism - HELD THAT:- Admittedly, the order passed by the Commissioner (Appeals) is based on the decision of the High Court of Deli in TRAVELITE (INDIA) VERSUS UOI AND OTHERS [2014 (8) TMI 200 - DELHI HIGH COURT]. The aforesaid decision has been stayed by the Supreme Court in UNION OF INDIA AND ORS VERSUS M/S TRAVELITE (INDIA) [2014 (12) TMI 1099 - SC ORDER] and the matter is pending before the Supreme Court. Therefore, in the factual situation of the case, no useful purpose would be served by keeping the appeal pending before this Court. In the circumstances of the case, the orders passed by the Tribunal dated 21.06.2016 and 15.06.2016 passed by the Tribunal as well as the order dated 28.10.2014 passed by the Commissioner (Appeals) are hereby quashed and the Commissioner (Appeals) is directed to await the orders passed by the Supreme Court in the Special Leave Petition pending before it and to decide the appeal before it in the light of the decision which may be rendered by the Supreme Court in the aforesaid special leave petition.
Appeal disposed off.
|
