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Service Tax - Case Laws
Showing 21 to 40 of 124 Records
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2023 (3) TMI 1127
Jurisdiction - power of Commissioner (Appeals) to remand the matter to Adjudicating Authority - Section 35 A of Central Excise Act, 1944 / Section 128 A (3) of the Customs Act, 1962 - HELD THAT:- As per the judgment of the Hon’ble Jurisdiction High Court of Gujarat in the case of COMMISSIONER OF SERVICE TAX VERSUS VERSUS ASSOCIATED HOTELS LIMITED [2014 (4) TMI 406 - GUJARAT HIGH COURT] in which the support was taken from the Hon’ble Supreme Court Judgment in the case of MIL INDIA LTD. VERSUS COMMISSIONER OF C. EX., NOIDA [2007 (3) TMI 8 - SUPREME COURT]. On this settled position this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE & ST, AHMEDABAD VERSUS ADANI POWER LIMITED [2020 (3) TMI 810 - CESTAT AHMEDABAD] dealing with one of the issue of remanding power of the Commissioner (Appeals) held that the learned Commissioner (Appeals) has power to remand the matter to the Adjudicating Authority.
Thus, the Commissioner (Appeals) has indeed power to remand the matter. Accordingly, there is no error in the impugned order to the extent the matter was remanded to the Adjudicating Authority.
Appeal of Revenue dismissed.
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2023 (3) TMI 1072
Levy of service tax - activity undertaken by the assessee of hire purchase and financial lease agreement entered prior to 16.07.2001 and amount received thereafter - prior to 01.03.2006, when there was no mechanism for bifurcation of service, income as provided in Notification No.4/2006, demand of service tax, is sustainable or not? - levy of penalty on assessee.
Whether for the activity undertaken by the assessee of hire purchase and financial lease agreement entered prior to 16.07.2001 and amount received thereafter, are liable to service tax or not? - HELD THAT:- The service tax has been levied on Banking and Other Financial Services with effect from 16.07.2001. Prior to that, there was no leviable on Banking and Financial Institution Services. Therefore, the agreement, which has been entered by the assessee, with their clients prior to 16.07.2001, when no service tax was leviable, the liability of service tax does not arise against the assessee.
The agreement entered by the assesse prior to 16.07.2001, is not liable to be taxed although the assesse has received the payments later on. Therefore, the issue is answered in favour of the assessee.
Whether prior to 01.03.2006, when there was no mechanism for bifurcation of service, income as provided in Notification No.4/2006, demand of service tax, is sustainable or not? - HELD THAT:- As there was no mechanism for bifurcation of taxable and non-taxable service rendered by the assessee, in that circumstances, reliance has been made in the case of COMMISSIONER OF CGST & CENTRAL EXCISE VERSUS SHRIRAM TRANSPORT FINANCE COMPANY LTD. [2021 (2) TMI 836 - BOMBAY HIGH COURT] wherein the Hon’ble High Court of Bombay has observed 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.
Thus, for the period prior to 01.03.2006, no service tax is payable by the assessee, although the agreements may have been entered post 16.07.2001 - for the agreement entered after 16.07.2001, the assessee is liable to pay service tax w.e.f. 01.03.2006 in terms of Notification No.4/2006-ST dated 01.03.2006.
Whether in the facts and circumstances of the case, penalty is imposable on the assessee or not? - HELD THAT:- Nno penalty is imposable on the assessee.
Appeal disposed off.
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2023 (3) TMI 1014
Time Limitation - Refund of entire amount of tax so deposited during investigation of the case - it is alleged that the petitioner had neither discharged the due service tax liability nor filed ST-E return for the period 01.04.2013 to 30.09.2013, which was required to be filed on or before 25.10.2013 - petitioner was issued shows cause notice on 17.08.2015 and thereafter, after a gap of 05 years, he was called for personal hearing.
If notices could not be served upon the petitioner w.e.f 31.08.2017, then the proceedings of recovery can be kept pending or not.
HELD THAT:- This aspect has been examined by various Courts and reference at this stage can be made to STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. [2007 (10) TMI 300 - SUPREME COURT] wherein the question was ‘what should be the reasonable period for reopening an order of assessment under the Punjab General Sales Tax Act’. The appeal was dismissed and it was held that when no period of limitation is prescribed, statutory authority must exercise its jurisdiction within reasonable period.
In the facts of the present case, even if details of Annexure R-1 is to be taken into account, it is not in dispute that the petitioner was not served after 31.08.2017. So the respondents were required to finalise the show cause notice within a period of one year as per clause (b) of sub Section 4-B of Section 73 of Act 1994.
The writ petition is allowed and show cause notice dated 17.08.2015 is quashed on the ground of limitation.
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2023 (3) TMI 1013
Refund claim - time limitation - whether the appellants refund filed after one year from the relevant date is hit by limitation in terms of Section 11B of Central Excise Act, 1944?
HELD THAT:- From the proviso under Section 11B(1), the period of one year will not apply if the assessee paid duty under protest. In the present case also, it is not in dispute that service tax was paid under protest therefore, the limitation of one year is prima-facie not applicable. However, before the Adjudicating Authority the appellant have not produced the letter under protest dated 25.06.2007, the learned Commissioner (Appeals) also rejected the submissions of the appellant regarding this under process letter on the ground that it is an after-thought as the same was not produced before the original authority.
This letter is of dated 25.06.2007 and it cannot be said that it is an after-thought. Learned Commissioner (Appeals) should have considered this letter and passed a reasoned order on this issue which he fails to do so. Since the letter was produced before the Adjudicating Authority, the matter should be remanded to the Adjudicating Authority to pass a fresh order after considering the under protest letter dated 25.06.2007.
The appeals are allowed by way of remand to the Adjudicating Authority.
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2023 (3) TMI 1012
Levy of Service Tax - renting of vacant land surrounded by boundary wall - tax paid on service of renting beyond one year from the relevant date is time barred under Section 11A or not - refund of service tax paid on vacant land is hit by mischief of unjust enrichment or not.
Whether renting of vacant land is taxable under the category of Renting of Immovable Property Service? - HELD THAT:- From the definition of renting of immovable property, it can be seen that a vacant land has been excluded from the term “Immovable Property”. It clearly justifies that even though such vacant land having facilities merely incidental to the use of such vacant land also falls under the exclusion category. As per the facts of the present case, on the vacant land there is only boundary wall which can be categorized as a facility incidental to use of such vacant land therefore, even though the land is surrounded by boundary wall, it fall under the term “Vacant land” provided in the definition of immovable property therefore, as per the facts of the present case, the vacant land is not liable for service tax being excluded from definition of immovable property.
Refund of service tax paid on such vacant land - limitation under Section 11B - unjust enrichment - HELD THAT:- As regard the time limit, the submission of the appellant is that the amount paid is not a service tax as there was no statutory levy on the vacant land therefore, the amount which was paid will not be governed for refund under Section 11B therefore, the limitation of one year provided under Section 11B shall also not apply mutatis mutandis - the appellant have admittedly paid the service tax under the head of service tax of renting of immovable property service and the same was declared in the ST-3 returns as payment of service tax. In this fact, since the amount was admittedly paid as service tax, the refund of service tax shall be governed by Section 11B.
The appellant have considered the gross rent as cum tax amount and while paying service tax to arrive at the taxable value, the service tax was excluded which shows that the service tax which was paid by the appellant was included in the gross renting recovered by the appellant if this be so, it is clear evidence that the incidence of the service tax paid by the appellant has been passed on to the service recipient for the reason that the gross amount collected from the service recipient includes the service tax amount also - the appellant is not entitle for the refund.
Appeal dismissed.
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2023 (3) TMI 1011
Refund of service tax paid - Management or (Business) Consultant Service - refund sought on the ground that they had paid service tax through oversight because as per Service Tax Rules, tax should be collected and paid, whereas they paid the said service tax without collecting any tax amount from the customers (beneficiary farmers) - HELD THAT:- The appellants are a limited company created by a resolution passed by three State Government undertakings, which are its joint promoters and therefore are implementing as a nodal agency a Micro Irrigation Scheme of Government of Gujarat.
It was held by Commissioner (Appeals) that On consideration, I am in agreement with the finding of the lower authority that the above services are in different areas which enable the farmers to efficiently manage their operations with regard to using the Micro Irrigation System (MIS) which are essential for their efficient working. The Appellant provide services to the individual farmers or group of farmers, as the case may be. Taking into the account the definition of Management Consultancy Service/ Management or Business Consultancy Service as mentioned in para 9 above, and the services provided by the Appellant as discussed in the forgoing paras, the Appellants services come within the scope of Management or Business Consultancy Service. Thus, the Appellant contention that their services are primarily administrative in and they do not come within the scope of Management or Business Consultancy Service is not acceptable.
There are no reason to differ with the findings of the Commissioner (Appeals) - the case law quoted by the appellant in the case of ELECTRICAL INSPECTORATE, GOVT. OF KARNATAKA VERSUS C. ST [2007 (10) TMI 137 - CESTAT, BANGALORE] was properly considered and rejected by the Commissioner (Appeals).
It is also found that the definition of Management Consultancy Service is comprehensive enough to cover any technical advice, assistance in relation to financial management which in this instance they were doing by identifying qualified farmers for disbursal of subsidy and were getting paid for these services to the State Government. That the amount for their services was being deducted and paid for eventually out of subsidy amount of farmers, as per the Government Scheme, is of no consequence and does not change the character of service or the service recipient.
There are no merit in the appeal - appeal dismissed.
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2023 (3) TMI 953
Rejection of application to settle its dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Renting of Immovable Property Service or not - It is Petitioner’s case that it did not pay service tax to Service Tax Authority under the belief that mere letting out was not a service - primary reason for disagreement is that Section 122 does not refer to VCES 2013 enactment and therefore, the order passed by the authority with reference to VCES is beyond the scope of the SVLDR Scheme.
Whether the amounts demanded against the Petitioner are dues under the Finance Act, 1994 or not?
HELD THAT:- VCES is part and parcel of the Finance Act, 1994, a statute which finds mention in Section 122 of the said Act. As can be seen from the facts of the case at hand, the Petitioner had obtained its Service Tax Registration under the Finance Act, 1994, the liability to pay service tax arose under the Finance Act, 1994, the show cause notice dated 17 April 2017 demanding the interest amount of Rs.2,78,90,766/- was issued to Petitioner under Section 75 of the Finance Act, 1994, which clearly stated that Petitioner had failed to pay minimum 50% of the declared tax dues on or before 31 December 2013 as required under the provisions of Section 107(3) of the Finance Act, 1994.
There is, therefore, no doubt that the liability of the Petitioner had arisen under the Finance Act, 1994 which enactment finds mention under Section 122 of the said Act. Therefore, the ground for rejection of Petitioner’s second application that the VCES does not find mention as an enactment under Section 122 would therefore not survive.
Coming to the observation of the Designated Authority that amount of duties having been paid, there is no duty pending recovery under the indirect tax enactments, we have already noted that in the facts of the case, the show cause notice demanding the interest amount was issued to Petitioner under Section 75 of the Finance Act, 1994 and which related to the service tax dues, which have admittedly been paid by Petitioner. Just because the Petitioner has paid the principal amount, it cannot be said that when a show cause notice has been issued for interest on the said amount, that the Petitioner is not entitled to make a declaration under SVLDRS. The interest relates to the service tax amount and the SVLDR Scheme covers not only tax but also interest, penalty - The Designated Authority ought to have considered the receipt of both these amounts while considering the application made by Petitioner.
The order of the Designated Authority dated 6 February 2020 under SVLDR Scheme rejecting Petitioner’s SVLDRS-1 application dated 27 December 2019 is hereby quashed and set aside - Respondent no.2 Designated Authority is directed to consider the Petitioner’s SVLDRS-1 application dated 27 December 2019 afresh in the light of the above discussion within a period of four weeks from today and issue appropriate order / certificate.
Petition allowed.
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2023 (3) TMI 952
Rejection of Petitioner’s application / declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Territorial jurisdiction of Commissionerate - it is contended that when the Petitioner was filing declaration on the portal in SVLDRS-1, there was no option to change the Commissionerate as once the Petitioner had entered the registration number, it automatically showed the concerned Commissionerate as Thane Commissionerate and it was not possible for the Petitioner to change the option to Navi Mumbai.
HELD THAT:- The scheme of 2019 which is brought into force by the Finance Act of 2019 is for settlement of legacy disputes and also gives opportunity to the tax payer to come forward to make payments and to resolve their pending disputes. It was also to help the Government to clear the amount locked in litigation to augment the revenue. In that context, the scheme of 2019 has to be construed. Section 125 of the Act, while it provides for declaration under the scheme, excludes categories of persons who are ineligible to make a declaration under the scheme. It is not the case of the Respondents, as conveyed to the Petitioner in the remark column, that Petitioner falls under in any of the exclusions.
The form to be filled under Section 125 of the Act is specified in the SVLDR Scheme Rules 2019 and form of SVLDRS-1 is appended to the Rules. The first column contains the service tax registration number. Then the other details and there is Column 8 which states select a Commissionerate. Prima facie reading of Column 8 would indicate that a Commissionerate can be selected. If the Petitioner had selected a wrong Commissionerate and when it was pointed out, if it was possible for the Petitioner to correct the Commissionerate, then the argument of the Respondents that the Petitioner failed to do so in forty-one days would have relevance - there are no option but to proceed on the premise that once the Petitioner had entered registration number which was tied up with Thane Commissionerate, the option at Column 8 was automatically selected.
Therefore, from the pleadings in the Petition, which have not been controverted in the reply affidavit, what emerges to us is the Petitioner is a victim of the lacuna in the software governing the SVLDR scheme where the Petitioner could not have selected the option of Navi Mumbai Commissionerate which was earlier Commissionerate of the Petitioner. This being the position, it is opined that the Petitioner is entitled to get his application / declaration SVLDRS-1 to be examined on merits as to whether the Petitioner is otherwise entitled to the benefit of the scheme.
The impugned rejection of the Petitioner’s declaration for SVLDRS-1 is set aside - Respondents will treat the application of the Petitioner for SVLDRS-1 as being properly instituted and decide the same on its own merit, as per law and as per the provisions of the scheme, within a period of eight weeks from today.
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2023 (3) TMI 893
Violation of principles of natural justice - It is contended by learned counsel for the petitioner that after 18.11.2021, petitioner did not receive any intimation from the 1st respondent including notice for personal hearing - non-payment of service tax by the petitioner on the taxable services provided for the period 2016-17 and 2017-18 (upto June, 2017) - HELD THAT:- Admittedly, insofar personal hearing is concerned, notice was not served upon the petitioner. Even if we accept the contention of learned counsel for respondent No.1, then also we fail to understand as to why the notice for personal hearing was sent by registered post when the show cause notice was sent through e-mail - Be that as it may, for failure of the 1st respondent to provide an opportunity of personal hearing to the petitioner, we are of the view that the impugned order stands vitiated. However, now that petitioner is aware of the allegations made by the 1st respondent, the impugned order may be treated as the show cause notice.
Order-in-original dated 02.11.2022 passed by the 1st respondent is hereby set aside - Though the order-in-original dated 02.11.2022, is set aside, the same shall now be construed to be the show cause notice - petition disposed off.
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2023 (3) TMI 892
Sabka Vishwas (Legacy Dispute Resolution) i.e., SVLDR Scheme, 2019 - requirement to deposit 50% of the disputed amount - HELD THAT:- Undisputed facts of the case are, assessee had indeed deposited Rs.2,52,46,749/-. The show-cause notice demand is for Rs.1,77,06,985/-. 50% of the same comes to Rs.88,53,492/-. Admittedly, assessee's amount of Rs.92,00,000/- is already with the Revenue.
It is the contention of Shri. Neeralgi that the Designated Committee could have taken note of only Rs.27,66,646/- which was in pre-deposit. It may be recorded that, whether the amount is paid as pre-deposit while filing the appeal or the amount is already deposited as tax, the same goes to the Treasury of the Central Government and must be accounted for. Once it is not denied that the assessee's amount of Rs.92,00,000/- was already in deposit with the Treasury of the Central Government, there are no reason to interfere with the order passed by the Hon'ble Single Judge in this intra-Court appeal.
Appeal dismissed.
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2023 (3) TMI 891
Condonation of delay in filing appeal - appeal dismissed on the ground of limitation in terms of Section 85(3A) of the Finance Act, 1994 as the same has been filed beyond prescribed period - whether this Tribunal has power to condone the delay in filing Appeal before the 1st Appellate Authority beyond the period prescribed by Section 85(3A) of the Finance Act, 1994? - rejection of refund claim under Rule 5 of Cenvat Credit Rules, 2004 r/w Notification No. 27/2012-CE(NT) dated 18.6.2012.
HELD THAT:- The provision of Section 85(3A) of the Finance Act, 1994 prescribes that an appeal before the Commissioner can be presented within two months from the date of receipt of the Order of the adjudicating authority. The proviso thereto unequivocally lays down that in case of delay in presenting the appeal, the discretion of the Commissioner (Appeals) in considering application for condonation of delay is restricted to one month only. If the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, he has the jurisdiction to allow it to be presented within a further period of one month. Thus, the total period, including the extended period to prefer an appeal under Section 85 of the Act, 1994, is three months. The provision of Section 35 of the Central Excise Act, 1944 which is parimateria with Section 85(3A) of the Finance Act, relating to appeals before Commissioner (Appeals) had come up for consideration before the Hon’ble Supreme Court in the matter of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT]. The said Section 35 of the Central Excise Act, 1944 provides that any person aggrieved by any decision or order passed under the Act, may appeal to the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order provided 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 sixty days, allow it to be presented within a further period of thirty days.
The appellate authority can entertain the appeal by condoning the delay only upto 30 days beyond the normal period for preferring the appeal, which is 60 days. The Commissioner (Appeals) herein was, therefore, justified in dismissing the appeal on the ground of limitation.
In view of the aforesaid decision of the Hon’ble Supreme Court in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT] it is clear that the Commissioner has no power to condone the delay beyond the period prescribed by the statute and the appeal has been rightly dismissed by the learned Commissioner on the ground of limitation.
In the matter of M/S. ALBERT & COMPANY PVT. LTD. VERSUS THE COMMISSIONER OF SERVICE TAX [2014 (3) TMI 655 - MADRAS HIGH COURT], as placed on record on behalf of Revenue, it has been specifically held by the Hon’ble High Court, while interpreting Section 85(3) ibid, that the Tribunal has no power or authority to extend the period of limitation prescribed by the statute for entertaining the appeal.
Thus, it is well settled that once the period of limitation expired as prescribed u/s. 85(3) ibid neither the Tribunal nor the first appellate authority has power to condone the delay in filing the appeal beyond the statutory period. Therefore the order of the Commissioner (Appeals) dated 26.11.2019 rejecting the appeal on the ground that the appeal has been filed belatedly beyond the period stipulated under Section 85 of the Act does not warrant any interference and the same is accordingly dismissed.
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2023 (3) TMI 890
Refund claim - hit by mischief of unjust-enrichment as per Section 11 B (1) of Central Excise Act, 1944 or not - appellant have initially charged service tax to the customer, the same was further passed on by the said customers to any other person or not - HELD THAT:- There is no dispute that the appellant have initially charged service tax to the customer. Subsequently, the same was reversed by issuing the credit note to the customers, therefore, the incidence of the service tax paid by the appellant was not passed on this issue has been considered in the various judgments:-
Reliance can be placed in the case of Addison & Co. Ltd. [2016 (8) TMI 1071 - SUPREME COURT], where it was held that Except for a factual dispute about the genuineness of the certificate issued by the Chartered Accountant and the credit notes raised by the Assessee regarding the return of the excess duty paid by the Assessee, there is no dispute in this case of the duty being passed on to any other person by the buyer. As it is clear that the Assessee has borne the burden of duty, it cannot be said that it is not entitled for the refund of the excess duty paid.
In the case of L & T [2020 (4) TMI 384 - CESTAT AHMEDABAD] also the identical issue has been considered wherein it was held that even though initially the amount of service tax was recovered but subsequently it was returned. The incidence primafacie was not passed on. However, this being the factual aspect, needs to be verified by the Adjudicating Authority.
From the above judgments it can be seen that the facts and transaction involved in the present case are identical to the judgments, wherein it was held that unjust-enrichment does not exist in the case where the assessee initially charged duty / service tax and subsequently issued the credit note for the same. Following the above decisions and considering the facts of the present case, the appellant’s refund claim does not fall under the clutch of unjust-enrichment.
The appellant is entitled for the refund claim - Appeal allowed.
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2023 (3) TMI 889
Levy of penalty under Section 77 and 78 of the Act - audit has found that the service tax with respect to the six months period from April 2013 to October 2013, which was not paid on accrual basis - suppression of facts or not - HELD THAT:- There is no deliberate default in payment of tax liability by the appellant. The issue is wholly interpretational in nature. Admittedly, the appellant was paying taxes regularly but there is only technical or venial breach of law, as they should have paid the tax on monthly basis. It appears the appellant was not properly advised by their consultant in the matter. Accordingly, it is found that there is reasonable cause for not depositing the tax on month to month basis.
The penalties under Section 77 and Section 78 of the Act are set aside - appeal allowed.
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2023 (3) TMI 835
Nature of activity - sale or service - sale of photo books to photographers/photo studios and individual photographers - it was held by CESTAT that As the activity of printing has also been exempted from payment of service tax, if we take note of the fact that the activity undertaken by the appellant in relation to photography service then also the activity undertaken by the appellant is not taxable service.
HELD THAT:- There is no substantial question of law requiring consideration by this Court in these appeals.
Appeal dismissed.
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2023 (3) TMI 834
Principles of Natural justice - long delay of 13 years in adjudication of SCN - HELD THAT:- Admittedly, Petitioner has participated in the adjudication proceedings from time to time. The grounds raised before the adjudicating authority as well as in this petition appear to be on merits. The issue of delay of 13 years in adjudicating the show cause notice can also be raised by the Petitioner in an appeal under section 35B of the Excise Act,1944 which provides for an appellate remedy against an order-in-original before the Tribunal. Neither there is any allegation nor the learned counsel has been able to demonstrate that there has been any breach of the principles of natural justice.
It is deemed appropriate to relegate the Petitioner to the remedy of appeal under section 35B of the said Act.
Petition dismissed.
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2023 (3) TMI 802
Classification of services - Management or Business Consultant services or Consulting Engineer services - Wrong availment of exemption under Notification No. 18/2002-S.T. dated 16.12.2002 by wrongly classifying the services imported from its group companies - on-inclusion of TDS in the taxable value of services received from outside India - invocation of extended period of limitation - revenue neutrality.
Classification of the service - HELD THAT:- From the evidence on the record, particularly clauses from the agreement dated 03.03.2006 which are extracted in the Show Cause Notice, it is clear that the services rendered extend far beyond engineering to areas like procurement management, purchase negotiations, supplier selection, management information systems, trading and problem source identification, finance, advertising and communication, legal services, insurance, etc. - As Krishna Iyer J. put it in COMMISSIONER OF INCOME-TAX, AP VERSUS TN ARAVINDA REDDY [1979 (10) TMI 1 - SUPREME COURT], “The purpose is plain; the symmetry is simple; the language is plain. Why mutilate the meaning by lexical legalism?” To treat legal, advertising, finance and insurance services as being linked to engineering would be to play this game of lexical legalism or, as Krishna Iyer J. put it in the same case, “linguistic distortion.”
Having so concluded that the services in question do not constitute the services of a consulting engineer, the question remains as to whether these services constitute the services of a “management or business consultant.”
The interpretation placed upon the definition of the term “management or business consultant” employed in section 65(65) by the Board is considered. From that interpretation, and from the words of the statute, what emerges is that the task of management extends to all those tasks that do not constitute the core business of the enterprise, and which do not fall under other specialisations. It appears that while no definition of the term “management” can be satisfactory, the best way to approach its construction would be negatively, i.e., by elimination. Section 65(65) too is worded widely enough to provide for this and covers financial management, human resources management, marketing management, management of information technology resources and, the crucial residuary limb “other similar areas of management.” In our opinion, all the services under the agreement we have referred to above will fall under one or the other of these limbs - we have to agree with the conclusions drawn by the Ld. Commissioner in classifying the services received by the appellant under ‘management or business consultant’ service.
Whether the TDS amount remitted by the appellant partakes the character of consideration for ‘service’? - HELD THAT:- The TDS is a tax obligation which can never partake the character of value or consideration for the transaction or of the goods or of services. It is not uncommon that any business contract/agreement inter-se parties primarily focuses on the value/consideration and then spells out as to who would bear the TDS obligation. This cannot be construed as to mean that TDS is also a part of such value/consideration. This is also because, any value/consideration agreed upon is strictly the choice of the parties but the TDS depends on the rate in force at the relevant point of time.
When it is contended that the assessee ‘grossed up’ the TDS, it is understood to mean that the assessee has indeed received only the amount as agreed towards value/consideration and the expenditure towards TDS are met by the assessee. So, when such TDS is not received from the non-resident since it is not towards value/consideration, there is no merit in requiring such assessee to include even the TDS it paid in the value of services, as in the case on hand - the appellant was correct in not including the TDS amount in the value of taxable services.
Whether the contention of the appellant that the situation is revenue neutral is correct? - HELD THAT:- Reliance placed on CESTAT larger Bench order in the case of JAY YUHSHIN LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI [2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI], wherein it has been categorically held by the Learned 5-Member Bench that the issue of Revenue neutrality being a question of fact, the is to be established in the facts of each case and not merely by showing the availability of an alternate scheme - also, it is always open for the appellant to make such claim for credit, as per the Rules and Regulations prescribed under the statute.
Whether the Show Cause Notice issued by invoking the extended period is justifiable? - HELD THAT:- There was a host of services received but there is also no doubt in our minds that a few of the activities could possibly be brought under consultant engineer services. The very fact that even the Board itself was not clear, for which reason an opinion was sought from the expert, namely, IIM Ahmedabad, fortifies the stand of the appellant that interpretation was involved. Thus, the appellant has made out a case for interference insofar as the invoking the larger period of limitation is concerned -To ascertain, however, the tax liability for the normal period, this issue, to this extent, is remitted to the file of adjudicating authority.
Appeal disposed off.
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2023 (3) TMI 801
Cenvat Credit - Providing output service of renting of immovable property - credit of service tax / duty paid on construction services - Appellant utilized credit while discharging the Service Tax liability on the leasing of the property - extended period of limitation - HELD THAT:- It is seen that the appellant has taken Cenvat Credit of Rs.2,29,99,232/- during the period under consideration. When they are not eligible for Cenvat Credit on account of constructed property which is sold, they have been regularly reversing the Cenvat Credit. These facts are being regularly disclosed in the ST-3 Returns as well as in the accompanying letter submitted to the Range/Division officials.
In respect of the constructed portion which is leased out by them, there is no dispute that the Service Tax is being paid on the lease amount received by them.
It is seen that on similar/identical issues the Tribunals and High Courts have been consistently holding that the inputs used for construction of immovable property is eligible for Cenvat Credit when the Service Tax is paid on the service provided - Hon’ble Ahemdabad Tribunal in the case of Navratna S G Highway Prop. Pvt. Ltd. Vs. CST, Ahmedabad [2012 (7) TMI 316 - CESTAT, AHMEDABAD] has held that without utilizing the service, mall could not have been constructed and therefore the renting of immovable property would not have been possible.
Extended period of limitation - HELD THAT:- As per the factual evidence reproduced by the appellant in the form of ST-Returns and letters filed with the Department from time to time with regard to the Cenvat Credit taken and reversed by them in the course of their business, the Department has not made out any case against the appellant towards suppression - the demand for the extended period is required to be set aside in the present case also on account of time bar.
Appeal allowed.
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2023 (3) TMI 742
Benefit of the scheme Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - contention of petitioner is that he made efforts to deposit the aforesaid amount within the time stipulated, but on account of technical glitches the amount was not accepted online - HELD THAT:- The petitioner on failure to deposit the amount online for any reason had not even made any application for accepting the payment in the physical form.
A Division Bench of the Allahabad High Court in M/S. YASHI CONSTRUCTION VERSUS UNION OF INDIA AND 2 OTHERS [2022 (3) TMI 108 - ALLAHABAD HIGH COURT], in an identical case, held that the petitioner who has not deposited the amount within the time granted, in the absence of any provision to extend the time, is not entitled for any further time to deposit the same - The aforesaid judgment and order of the Allahabad High Court has not been disturbed even by the Supreme Court in M/S. YASHI CONSTRUCTIONS VERSUS UNION OF INDIA & ORS. [2022 (3) TMI 110 - SC ORDER], against the same has been dismissed on 18.02.2022.
It may be pertinent to mention here that though the petitioner could not deposit the amount within the time of 30 days stipulated in the SVLDRS-3, he could not even deposit the said amount within the extended period of scheme which was extended up to 30.06.2020 - there are no material on record which could substantiate that the petitioner made effort to deposit the amount even on 22.06.2020, as alleged.
There are no good reason to exercise our discretionary jurisdiction in the matter and the petition is accordingly dismissed.
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2023 (3) TMI 741
Refund of Krishi Kalyan Cess paid on services received for manufacture of goods - transportation of goods - Manpower supply-recruitment - maintenance and repair service - technical testing analysis service - CENVAT Credit of input services received for manufacture of goods namely transportation of goods, man power supply recruitment, goods maintenance and repair service, etc. - HELD THAT:- The amount of refund for KKC Rs. 5,46,759/- rejected, following the ruling of larger bench in the case of Gauri Plastic Culture Pvt Ltd. [2019 (6) TMI 820 - BOMBAY HIGH COURT] wherein it was held that a non-utilised portion of Cenvat credit cannot be claimed as refund in cash, distinguishing the ruling in Union of India vs. Slovok India Trading Company, as not a declaration of law under Article 141 of the Constitution.
Credit have been admittedly taken after one year from the date of invoice/ bill of entry on Rs. 4,15,012/- - HELD THAT:- The rejection of the same is upheld as admittedly credit was taken beyond a period of 12 months from the date of invoice/bill of entry.
So far the balance amount of refund is concerned, the appellant have rightly taken credit in view of Rule 2(l) of CCR which entitles a manufacturer to claim Cenvat credit on input services utilise in manufacture of dutiable taxable goods - there is no bar in cross utilisation of Cenvat credit once taken, either for payment of Central Excise duty or service tax, in view of the provisions of Rule 3 or 4 of CCR.
The Adjudicating Authority is directed to grant refund of the balance amount of Rs. 15,37,886/- - appeal allowed in part.
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2023 (3) TMI 740
Refund of service tax paid - amount paid under mistake of law - applicability of time limitation and principles of natural justice - HELD THAT:- The present case is one where the service providers (i.e. NOMC and Haliburton) as also the service recipient (i.e. the Appellant) have discharged Service Tax on the same transaction and each party has deposited the said tax with the Department. The Department has received the amounts in question twice over and there is no inter-se reimbursement of the said tax between the parties. Though contractually it was the service providers who were to discharge the tax, since they had establishments in India, and then recover the same from the Appellant, the Appellant entertained a view that it was supposed to discharge Service Tax on reverse charge and directly paid the same to the Department.
As is evident from the record,NOMC and Haliburton setup establishments in Jodhpur and Bombay respectively, obtained Service Tax registrations and discharged Service Tax. They did this correctly, in terms of the plain language of Explanation 4 to Section 65B(44). The record also indicates that communications were exchanged between the branch offices and the Appellant. Moreover, the labour force to carry out the concerned work was also sourced domestically - Tribunal in the case of M/S. NAGARJUNA OIL CORPORATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [2016 (8) TMI 41 - CESTAT CHENNAI] has held that when branch offices of foreign service providers obtained registration and discharged Service Tax in India on the transaction in question, the service recipient located in India (the assessee in that case) was not required to discharge the same,on reverse charge.
Both sides have relied on a plethora of judgments on the issue of the applicability of the limitation provided under Section 11B to amounts paid under mistake of law. The tenor of the jurisprudence on the subject indicates that the limitation prescribed under Section 11B is not applicable to a refund claim in a situation where the concerned tax was never payable by the assessee.In other words, had the Department raised a demand of such an amount, the assessee could have successfully challenged the constitutionality of the same - the statutory limitation period prescribed under Section 11B is not applicable to the refund claimed by the Appellant since the amount paid by the Appellant is not a tax.
Unjust enrichment - HELD THAT:- The appellant in its ledger accounts first discharged the Service Tax and thereafter appended certain notings in front of the said amounts stating “on hold”. It is also clear that the amounts have not been expensed out as the appellant is awaiting the outcome of the litigation. Hence the amount of Service Tax paid cannot be said to have been passed on to anyone - Moreover, the Ministry of Petroleum vide clarifications dated 1.05.2009 and 25.03.2011 has held that the refineries are only liable to discharge Sales Tax and Pipeline TransportationCharges. There is no mention of Service Tax in the same. Moreover the Crude Offtake Sales Agreements between the Appellant and Indian Oil and Numaligarh Refinery Ltd., at the relevant clauses only provide for VAT to be paid by the Appellant’s buyers. In view of the same, Service Tax paid by the Appellant never formed part of the crude oil sold by the Appellant.
The judgment of Hon’ble Supreme Court in STATE OF RAJASTHAN & ORS VERSUS HINDUSTAN COPPER LTD. [1997 (11) TMI 516 - SUPREME COURT] is applicable to the present case where it was held that there is no question of any unjust enrichment of the respondent as a result of the refund of the excise duty paid on rectified spirit because the respondent has not passed on the duty to any consumer of the final product, viz., copper, manufactured by the respondent.
The present appeal is allowed. The appellant shall be entitled to the refund amount along with interest.
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