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Service Tax - Case Laws
Showing 1 to 20 of 124 Records
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2023 (3) TMI 1469
Seeking withdrawal of writ application and prefer an appeal before the learned CESTAT - petitioner submits that they would be making the pre-deposit of the balance amount as mandated under Section 35(F) of the amended Excise Act, 1944 - realization of service tax dues - Assessment years 2014-15 and 2015-16 for which two separate proceedings were initiated by the respondent-Joint Commissioner, CGST - HELD THAT:- The writ petition is allowed to be withdrawn.
The petitioner is at liberty to approach the learned CESTAT against the impugned orders within a period of 2(two) weeks from today and also make the necessary pre-deposit apart from other statutory compliances for maintaining the appeal. The respondents have already indicated that no coercive steps would be taken for a period of 2(two) weeks from today - However, if no appeal is filed within a period of 2(two) weeks from today, the respondents-Revenue would be at liberty to take steps for realization of the Service Tax dues.
The writ petition is disposed of.
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2023 (3) TMI 1460
Levy of service tax - Banking and other Financial Services - earning of profit on the transaction of foreign exchange made by the appellants - department has confirmed the service tax demand on the profit earned by the appellants on making the transaction in foreign exchange - HELD THAT:- Since, the element of profit earned is not in context with any provision of taxable service, there is no scope for levy of service tax on such profit element earned by the service provider, owing to various reasons viz. fluctuation in currency rate etc. In other words, the profit element in question earned by the appellants is out of ‘trading of the foreign currencies’ and not as a consideration for the ‘services rendered’ towards purchase and sale of foreign currency, on which due service tax liability had already been discharged by the appellants. Since there is no element of any provision of service, by which the disputed profit margin, was generated, the said element of profit shall not be considered as a ‘taxable value’ for the purpose of levy of service tax.
This Tribunal in the case of STATE BANK OF INDIA COMMERCIAL BRANCH VERSUS COMMR. OF C. EX., JAIPUR [2012 (2) TMI 494 - CESTAT NEW DELHI] and M/S STATE BANK OF BIKANER & JAIPUR VERSUS CCE, JAIPUR-I [2011 (6) TMI 442 - CESTAT, DELHI] has held that margin of profit is not taxable under the Finance Act, 1994 and it is only the gross value, which is recognised under the statute for sufferance of the tax element on the value of the services rendered, which admittedly, the appellants in this case, has duly complied with - Since, upon proper analysis of the legal provisions, the competent authorities in some other Zone had decided not to agitate the matter further by way of filing appeal, consistency is required to be maintained in adopting the ratio that profit element on provision of the taxable service shall not be subjected to levy of service tax inasmuch as such profit element is not a ‘consideration’ for provision of the taxable service.
There are no merit in the impugned order, insofar as it has confirmed the adjudged demands on the appellants - appeal allowed.
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2023 (3) TMI 1441
CENVAT Credit - amount paid towards technical knowhow under the head of IPR services - denial on the ground that since the appellant paid R& D cess on the IPR service, service tax was not payable as per notification no. 17/2004- ST and hence the appellant is not eligible for cenvat credit - reverse charge mechanism - denial of refund claim on the ground that the appellant did not submit evidence to establish that the benefit of notification no. 17/2004- ST was available to them.
CENVAT Credit - HELD THAT:- From Section 5 A it is clear that the assessee is bound to avail an unconditional (absolute) notification but there is no compulsion to avail a conditional notification. As per the above provision the appellant enjoys the option of availing the conditional notification or not. Therefore, if the appellant have paid the Service tax without availing Notification No. 17/2004-ST the same is not objectionable and the payment of service tax is legal and correct. Consequently, the cenvat credit on such service tax paid Can also not be disputed.
In catena of case laws it is held that even though the service tax on any service is not payable but assessee pays the service tax the recipient is entitled for the cenvat credit - reliance can be placed in COMMISSIONER OF CENTRAL EXCISE, CHENNAI-I VERSUS CEGAT, CHENNAI [2005 (1) TMI 125 - HIGH COURT OF JUDICATURE AT MADRAS] and COMMISSIONER, C. EX., & CUSTOMS VERSUS PURITY FLEXPACK LTD. [2006 (11) TMI 105 - HIGH COURT, GUJARAT].
The appellant are entitled for the cenvat credit of the total amount paid as service tax. Accordingly, the impugned order set aside - appeal allowed.
Refund claim - HELD THAT:- Since the entire amount of cenvat credit of the service tax paid by the appellant is allowed, there is no question of further refund as claimed.
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2023 (3) TMI 1430
Levy of Service Tax - business auxiliary service - sizing of coal - appellant asserts that at the time of sale it recovered basic price of the coal, coal sizing charges, surface transport charges and other levies from the customers and paid the applicable excise duty/sales tax on the said amount - dispute relates to the period 2014-15 - HELD THAT:- It does transpire from a perusal of the decision rendered in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS CCE & ST, RAIPUR [2018 (4) TMI 838 - CESTAT NEW DELHI] that the issue stands covered in favour of the appellant. The Tribunal, after relying upon the decision of the Supreme Court in BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT], held that both sales tax and service tax cannot be made applicable on the same transaction. In this view of the matter, when the appellant is only cutting the size of the coal to be provided to the customers, it cannot be said that any service has been offered by the appellant to the buyer of coal.
The order impugned dated 09.12.2016 therefore, cannot be sustained and set aside - Appeal allowed.
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2023 (3) TMI 1400
Levy of Service Tax - Ocean Freight - HELD THAT:- The issue whether Ocean Freight/ Sea Transportation service is liable to service tax or otherwise has been decided by jurisdictional High Court of Gujarat in the case of SAL Steel Limited [2019 (9) TMI 1315 - GUJARAT HIGH COURT].
As regards the Revenue’s appeal pending before the Hon’ble Supreme Court against the aforesaid decision, there is no stay against the said High Court judgment. In view of this position, there are no infirmity in the impugned order which was passed relying on the jurisdictional High Court judgment in the case of SAL Steel Limited.
Following the Hon’ble Gujarat High Court decision in the case of SAL Steel Limited, the impugned order is upheld and the Revenue’s appeal is dismissed.
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2023 (3) TMI 1394
Interest liability for ‘undue retention’ of deposits forced, by unfortunate circumstances and extraneous forces - applicant submitted that the precedent decisions on the extent to which interest liability for undue retention has been found equitable are on record - HELD THAT:- It is only appropriate that a copy of this order may be placed before Revenue Secretary, Government of India and Chairman, Central Board of Indirect Taxes & Customs (CBIC) with the request to consider issuing of instructions on accountability under Conduct Rules applicable to Central Civil Services, as well as legal requirement under the empowering statue, obliging tax authorities to respond to judicial determination.
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2023 (3) TMI 1393
Demand of differential duty - Erection, Installation & Commissioning Services - benefit of Notification No.1/2006-ST dated 01.03.2006 denied - Revenue is of the view that the appellant is not entitled for the benefit of the said Notification as it is purely a service contract - HELD THAT:- There is not dispute, the services in question have been supplied by the appellants along with the materials, for which, the appropriate classification is “Works Contract Service”, which came into service tax net from 01.06.2007.
As per the decision of the Hon’ble Apex Court in the case of Larsen & Toubro Limited [2015 (8) TMI 749 - SUPREME COURT], this issue has been clarified and after going through the said judgement, we hold that for the period prior to 01.06.2007, the demand under the category of “Erection, Installation & Commissioning Services”, was not sustainable as the appropriate classification is “Works Contract Service”. Admittedly, no demand has been made for the period prior to 01.06.2007 under the “Works Contract Service”. Therefore, the demand of service tax from the appellants does not survive prior to 01.06.2007.
For the period post 01.06.2007, it is held that the appellant is entitled for the benefit of Notification No.01/2006-ST dated 01.03.2006. The said Notification narrates that if the assessee supplied the services along with materials and the value of service cannot be quantified, in that that circumstances, the assessee is entitled for 67% abatement of the total service provided by the assesse. The same is the proportion under “Works Contract Service”, wherein the assesse is liable to pay service tax on 33% of the gross value of service provided. In that circumstances also, the appellant has paid service tax of 33% of the gross value of service provided in question. In that circumstances, the demands against the appellants are not sustainable.
Thus, all the demands are barred by limitation as the issue of taxability was in dispute during the impugned period and the show-cause notices were issued by invoking extended period of limitation.
There are no merit in the impugned orders and the same are set aside - appeal allowed.
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2023 (3) TMI 1384
Levy of service tax - Banking and other Financial Service - amount which was deducted by the Foreign bank towards the bank charges for the year 2006-2007 to 2010-2011 - reverse charge mechanism - invocation of extended period - imposition of penalties - HELD THAT:- The appellants have submitted the documents for realization of export sale proceeds to their bank namely SBI, which in turn has used the services of the foreign bank for collection of export sale proceeds. Obviously, the foreign banks who have rendered their services, have deducted their charges while remitting the export sale proceeds to SBI. The appellant has never dealt with the foreign bank on his own and the Banking and Other Financial Service if at all was rendered only to SBI. Amount charged by the foreign bank while remitting export sale proceeds, whether can be subjected to service tax or not has been decided by the CESTAT Principal Bench, New Delhi in the case of M/S. THEME EXPORTS PVT. LTD. VERSUS C.S.T., DELHI [2018 (5) TMI 825 - CESTAT NEW DELHI], by relying on the ratio laid down by the Tribunal in the case of M/S DILEEP INDUSTRIES PVT. LTD. VERSUS CCE, JAIPUR [2017 (10) TMI 1231 - CESTAT NEW DELHI], where the Tribunal held while exporting their goods, they lodged their bills for collection to the Indian Bankers who in turn send the same to the foreign banks. The foreign banks while remitting the money to the Indian Bank, deduct their charges for collection of bills which in turn are charged by the Indian Banks from the appellants. When it is so, then the appellant are not entitled to pay the service tax.
Extended period of limitation - penalties - HELD THAT:- As the issue is resolved on merits, there is no need to discuss about invocability of extended period in this case and also regarding legality of imposition of penalties.
Appeal allowed.
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2023 (3) TMI 1373
Maintainability of petition - availability of alternative remedy of appeal - Appealable order u/s 35 of the Finance Act, 1994 - HELD THAT:- Since, the order impugned in the writ petition is appealable under Section 35 of the Finance Act, 1994; therefore, this Court declines to invoke its extra ordinary jurisdiction under Article 226 of the Constitution of India.
Writ petition is, accordingly, dismissed on the ground of alternate remedy with liberty to the petitioner to approach an appropriate forum.
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2023 (3) TMI 1369
Refund of Excess Service Tax paid - rejection on the ground of being time barred - Sub Rule (1A) of Rule 6 of Service Tax Rules, 1994 - HELD THAT:- Whatever has been paid in excess of due is treated as advance payment to the Central Government. It is much similar to the payments made to account current which is popularly known as PLA. It has been held several times that the amounts lying in PLA are assessee’s property and he can take refund of the same any time he wants and limitation is not applicable to the same. In the similar manner, any amount which is paid as advance under Sub Rule (1A) of Rule 6 of Service Tax Rules, 1994, limitation would not apply. Limitation is to apply only to such quantum of amount which is paid as Service Tax.
The impugned order set aside - the original authority are directed to issue the cheque of refund to the appellant - appeal allowed.
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2023 (3) TMI 1276
CENVAT Credit - input services - re-insurance services (Indian Business as well as Foreign Insurance) after the amendment in the definition of “Input Service” defined in Rule 2 (1) of the CENVAT Credit Rules w.e.f. 01.04.2011 - recovery of Rule 14 of the CENVAT Credit Rules read with proviso to Section 73 (1) and Section 73 (4) of the Finance Act.
Whether the respondent was entitled to avail CENVAT Credit on re-insurance premium in respect of insurance policies issued in respect of motor vehicles including motor third party insurance?
HELD THAT:- It is clear from the definition that the re-insurance is insurance of part of the insurer’s risks by another insurer. Thus, what the re-insurer, in effect, does is to insure the risks of another insurer. This is qualitatively different from the risks of the policy holder covered by the insurance policy issued by the insurer. The insurer, in fact, covers the risks of the policy holder - Re-insurance is a matter between one insurance company and another, where the former insurer company indemnifies the latter against part of the loss that the latter insurance company may sustain under policy or policies issued by it. Re-insurance is, essentially, to distribute the risks assumed by an insurance company. Thus, ensuring stability to the business of the insurance company that is covered by re-insurance.
There is merit in the contention that the insurance company that reinsures another insurance company covers the business risks of that insurance company; it does not cover the risk to the asset or other risks, covered by that insurance company.
In M/S SHRIRAM GENERAL INSURANCE COMPANY LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2020 (3) TMI 1295 - CESTAT NEW DELHI], the learned CESTAT had considered the question whether amendment to Rule 2(l) of the CCR with effect from 01.04.2012 would affect the eligibility of the appellant insurance company to avail CENVAT Credit in respect of re-insurance services availed during the relevant period.
There is no infirmity with the decision of the learned CESTAT that re-insurance services were not excluded from the definition of ‘input service’ as defined under Section 2(l) of the CCR with effect from 01.04.2011.
The allegation that re-insurance services were specifically excluded from the scope of input services by virtue of an amendment to Rule 2(l) of the CCR introduced with effect from 01.04.2011 – that is, by virtue of the exclusion contained in Clause (B) of Rule 2(l) of the CCR –is not one of the grounds clearly stated in the show cause notice.
The impugned order allowing OIC’s appeal is founded solely on the conclusion that re-insurance services were not excluded from the definition of ‘input services’ under Rule 2(l) of the CCR during the period in question (Financial Year 2011-2012) - the question projected by the Revenue in this appeal are answered against the Revenue and in favour of OIC.
The appeal is dismissed - decided against Revenue.
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2023 (3) TMI 1275
Classification of services - services provided to DMRC with respect to Cost Centre A (Preliminaries and General Requirements) and Cost Centre B (Detailed Design) - classifiable under the taxable category of ‘consulting engineer service’ or not - services provided by the appellant to DMRC with respect to Cost Centre D (Installation and Site Testing) and Cost Centre E (System Acceptance Test and Integrated Testing & Commissioning) - classifiable under the taxable category of ‘erection, commissioning or installation services’ or not - Non-payment of Service Tax - HELD THAT:- It is seen that for the period prior to 01.07.12, the service provided by the appellant would be covered within the exclusion clause of the definition of works contract service since the service provided by the appellant to DMRC is with respect to metro (which is covered within the purview of Railways).
This issue was also decided in favour of the appellant in CCE, JAIPUR-I VERSUS M.M. CONSTRUCTIONS, KIRAN UDYOG (KIRAN INFRA ENGS. LTD.) AND KIRAN INFRA ENGGS., M.M. CONSTRUCTIONS, ALCATEL PORTUGAL S.S. (NOW KNOWN AS THALES PORTUGAL SA) VERSUS CCE, JAIPUR/DELHI [2017 (1) TMI 1385 - CESTAT, NEW DELHI] where it was held that works contract service’ provided to Indian Railways as well as DMRC are excluded for tax liability.
For the period post 30.06.2012, the service rendered by the appellant would be covered under Serial No. 14 of the Exemption Notification dated 20.06.2012 - It is, therefore, clear that services provided by way of erection, commissioning and installation of machinery or equipment to DMRC by the appellant is covered under Serial No. 14 of the Notification dated 20.06.2012 and thus, would be exempt from payment of service tax w.e.f. 01.07.2012.
It is not possible to sustain the order dated 24.10.2016 passed by the Commissioner (Appeals) - Appeal allowed - decided in favour of appellant.
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2023 (3) TMI 1274
Condonation of delay in filing appeal - time limitation - appeal dismissed for the reason that it had been filed beyond the period of limitation prescribed under section 85 of the Finance Act, 1994 - HELD THAT:- On a plain reading of the provisions of section 85(3A) of the Finance Act, it is clear that any person aggrieved by any decision or order passed by the adjudicating authority may appeal to the Commissioner (Appeals) within two months from the date of receipt of the decisions or orders. The proviso, however, stipulates that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, allow it to be presented within a further period of one month. It is, therefore, clear that an appeal can be filed within two months from the date of communication of the order but if the Appeal is filed after two months but within one month after the expiry of two months, the Commissioner (Appeals) may condone the delay in filing the Appeal if he is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within two months. It, therefore, implies that if the Appeal is filed after one month after the expiry of the initial period of two months, the delay cannot be condoned.
This issue was considered by the Supreme Court in Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT], the Supreme Court examined the provisions of section 35 of the Central Excise Act, 1944, which is para materia to the provisions of section 85 of the Finance Act, and observed that delay can be condoned in accordance with the language of the Statute which confers power on the Appellate Authority to entertain the appeal by condoning the delay only up to 30 days after expiry of 60 days which is normal period for preferring the appeal. It is for this reason that the Supreme Court observed that the Commissioner and High Court were justified in holding that there was no power to condone the delay after expiry of 30 days period.
As the appeal was preferred before the Commissioner (Appeals) even beyond the extended period of one month after the expiry of the statutory period of two months, it was liable to be dismissed and was rightly dismissed by the Commissioner (Appeals).
It is, therefore, not possible to accept the contention of the appellant that the delay in filing the appeal should have been condoned by the Commissioner (Appeals) - there are no error in the order passed by Commissioner (Appeals) - appeal dismissed.
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2023 (3) TMI 1273
Rejection of Refund of Service Tax - tax deposited by the appellant under a mistaken belief that service tax was leviable on construction of individual independent residential houses - denial of refund of service tax for the reason that the appellant cannot claim benefit of the Exemption Notification dated June 20, 2012 for the period after July 01, 2012 - rejection of refund claim also on the ground of unjust enrichment.
HELD THAT:- A Division Bench of the Tribunal in AS SIKARWAR VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [2012 (11) TMI 1000 - CESTAT, NEW DELHI] also observed that service tax can be demanded only if the building concerned has more than 12 residential units in the building and such levy will not apply in cases where one compound has many buildings, each having not more than 12 residential units.
It is true that w.e.f July 01, 2012 “construction of complex” is a declared service, but the Exemption Notification exempts services by way of construction, erection, commissioning or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex have been exempted - the Commissioner (Appeals) was not justified in holding that the appellant would not be entitled to the benefit of the Exemption Notification.
The Commissioner (Appeals) was also not justified in holding that the refund was hit by the principles of unjust enrichment. As per the work orders, service tax was to be borne by the appellant and the Commissioner (Appeals) has also found, as a fact, that the contract awarded by the Housing Board to the appellant mentions that service tax shall be borne by the contractor.
The Allahabad High Court in COMMISSIONER OF CUSTOMS CENTRAL EXCISE & SERVICE TAX VERSUS M/S. INDIAN FARMERS FERTILIZERS COOPERATIVE LTD. [2014 (7) TMI 891 - ALLAHABAD HIGH COURT] held that a refund can be claimed by a person who has borne the incidence of tax. Even in accordance with the Exemption Notification dated June 20, 2012, 50% of the tax to be deposited by the Housing Board under the reverse charge mechanism was deducted by the Housing Board from the amount payable to the appellant.
Appeal allowed.
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2023 (3) TMI 1212
Refund of service tax - Construction of Complex Service - mutuality of interest - construction of complex service provided by appellant SHRINANDNAGAR V CO OPERATIVE HOUSING SOCIETY LIMITED to its members of the society - relationship of service provider and service recipient between cooperative societies and its members - HELD THAT:- This tribunal in the order dated 30.07.2009 [2009 (7) TMI 135 - CESTAT, AHMEDABAD] decided the matter on merit in the appellant’s favour holding that the appellant is eligible for refund however, it was remanded only for the examining the aspect of unjust enrichment, where it was held that in the absence of a contractor hired by Society and nature of the transaction between the parties and in the light of definition of service and its liability for service tax, the transaction in this case cannot be considered taxable.
With the above orders of the tribunal as well as the High Court, the issue on merit that whether the service of construction of complex provided by the appellant’s cooperative housing society to its members is eligible to service tax or otherwise has been settled in favour of the appellant.
The impugned order is not sustainable - Appeal is allowed.
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2023 (3) TMI 1211
Levy of Service tax - business auxiliary service - amount received by the appellant for using Central Reservation System (CRS) - amount received towards money transfer transactions would be exigible to service tax or not? - period involved is from October 2009 to March 2015.
HELD THAT:- This issue has been decided by a Larger Bench of the Tribunal in favour of the appellant in KAFILA HOSPITALITY & TRAVELS PVT. LTD. VERSUS COMMISSIONER, SERVICE TAX, DELHI [2021 (3) TMI 773 - CESTAT NEW DELHI] where it was held that It, therefore, clearly transpires from the aforesaid decisions that incentives paid for achieving targets cannot termed as “consideration” and, therefore, are not leviable to service tax under Section 67 of the Finance Act.
The view expressed by the Larger Bench in Kafila Hospitality was subsequently followed by a Division Bench of the Tribunal in M/S. ASVEEN AIR TRAVELS (P) LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2022 (4) TMI 1035 - CESTAT CHENNAI].
It has, therefore, to be held that the Commissioner (Appeals) committed an error in confirming the demand of service tax on the amount received by the appellant from the companies.
The order dated December 26, 2017 passed by the Commissioner (Appeals) in so far as it confirms the demand of service tax in respect of the amount received by the appellant from the companies providing CRS, is set aside - Appeal allowed.
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2023 (3) TMI 1174
Recovery of Service Tax and penalty - execution of works-contract in various Government Departments of the State - It is the claim of the petitioner that for the works executed, VAT as applicable was already deducted by the authorities from the payments received - time limitation - HELD THAT:- Section 85 of the Finance Act prescribes provision for appeal against any order passed under Sections 71, 72 and 73. Under Section 85(3) an appeal shall be presented within three months from the date of receipt of the decision or order of the Central Excise Officer provided if the concerned Officer is satisfied that sufficient cause prevented the appeal from being filed within the statutory period of three months, the same may be extended by a further period of six months.
It is also noticed that under Section 84, there is a provision for revision of the orders by the Collector of Central Excise. Section 84(2) prescribes that no order which is prejudicial to the assessee shall be passed under this section unless the assessee has been given an opportunity of being heard - Sections 84 and 85 of the Finance Act, 1994 provides for statutory remedy against orders passed against the assessee.
Time Limitation - HELD THAT:- The benefit of extension of the limitation period from 15.03.2020 to 28.02.2022 will accrue to all persons concerned - this Court is of the considered view that the appellate authority is empowered to decide the claims of the petitioner vis-à-vis the impugned order dated 2306.2022 passed by the Assistant Commissioner, Tezpur, CGST. Prima facie, it appears that the petitioner may be entitled to the benefit of the order of the apex Court dated 10.01.2022 whereby period of limitation was extended from 15.03.2020 to 28.02.2022 as well as subsequent Notifications issued by the Department pursuant to the order of the apex Court.
As such, in view of the remedy of the statutory appeal available to the petitioner, the petitioner is permitted to approach the appellate authority assailing the impugned order dated 23.06.2020 - Petition disposed off.
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2023 (3) TMI 1173
Classification of services - arrangement of job work by the appellant for M/s. Gharda Chemicals Limited in their factory - HELD THAT:- There is only difference of period in the present case and the case which was decided by this Tribunal in GUJARAT INSECTICIDES LTD VERSUS C.C.E. & S.T. -SURAT-II [2023 (2) TMI 781 - CESTAT AHMEDABAD]. Therefore, except for the period, all the facts are same and therefore as per the judicial discipline wherein this Tribunal has held that the activity of the appellant is indeed manufacture of excisable goods in terms of section 2(f) of CEA, 1944. As per the definition of business auxiliary service manufacture of excisable goods in terms of section 2(f) of the Central Excise Act, 1944 is clearly excluded from the definition of business auxiliary service. For this reason also, the demand of service tax is not sustainable.
In view of the decision in the appellant’s own case, the issue is no longer res-integra - appeal allowed - decided in favour of appellant.
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2023 (3) TMI 1172
Levy of Service Tax - reverse charge mechanism - management, maintenance or repair service or not - appellant’s Head Office was at U.S.A., from whom they purchase the software, enter into an agreement/contract with Indian customers for maintenance and enhancement of the software sold by them and that the appellant had incurred expenditure in foreign currency towards the purchase - Revenue neutrality - Extended period of limitation.
HELD THAT:- Admittedly, the provider of service is a foreign entity who would only upload the programme on to the website, provide the internet website address and a password for the same - Section 66A is the charging section under reverse charge mechanism on the services provided or to be provided by a person who is not having a permanent address or usual place of business or residence in a country other than India; and received by a person having business or place of residence, in India - Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, as the name itself indicates, shall apply for services provided from outside India and received in India, when Section 66A ibid is applicable. There is no difficulty for this proposition as the very Rule 3 ibid. starts with “subject to Section 66A of the Act".
A conjoint reading of the above provisions points only to the fact that they shall apply when services are “provided from outside India”, and not if the services are provided by a person in India, to any other person in India. This follows, therefore, that both the statutory provisions would apply only when the location of the service provider is outside India and the recipient is located in India.
Further, the Adjudicating Authority has negated the claim of the appellant that it is the second proviso to Rule 3(ii) of the Taxation of Services Rules ibid. that would apply, by holding that the software which was supplied by the foreign company was very much available in India upon its receipt by the appellant, which was only thereafter forwarded within India to the customers - It is in the second proviso that we see the reference, inter alia, to the service provided in relation to any goods. There is no dispute here that the software is treated as ‘goods’ and the alleged service albeit provided through internet, but performed in India.
Therefore, to say that the software was available in India, with the appellant and hence the provision of service was from India only, as observed by the Adjudicating Authority, runs counter to the demand of Service Tax under reverse charge mechanism within the meaning of Section 66A ibid. read with Rule 3 (ii) of the Taxation of Services Rules ibid.
The appellant could not have been fastened with the Service Tax liability under management, maintenance or repair service for the reason that there is no document placed on record to negate the appellant’s claim that they have not rendered any service in India and the Revenue has also not been able to place anything on record in their support to establish that the appellant had rendered nothing but management, maintenance or repair service.
The issue insofar as it relates to invoking of extended period of limitation, not decided as the same is academic.
Appeal allowed - decided in favour of appellant.
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2023 (3) TMI 1128
Levy of Service tax - Industrial or Commercial Construction Service - service of industrial painting job - scope of SCN - HELD THAT:- The learned Commissioner (Appeals) travelling beyond the show cause notice and adjudication order decided that the service tax is payable under the head of Management, maintenance and repair service. This approach of the learned Commissioner (Appeals) is absolutely illegal and incorrect. The learned Commissioner (Appeals) has no power to create a new case before him which is not flowing from the show cause notice therefore, on this ground alone the impugned order is not sustainable. However, since the learned Commissioner (Appeals) has upheld the demand under Management, maintenance and repair service and not under Industrial or Commercial Construction Service the matter needs to be reconsidered by the learned Commissioner (Appeals).
The learned Commissioner (Appeals) shall decide the appeal considering the service under Industrial or Commercial Construction Service. Accordingly, the impugned order is set aside - Appeal is allowed by way of remand to the Commissioner (Appeals) for passing afresh Order-in-Appeal preferably within a period of two months from the date of this order.
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