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Service Tax - Case Laws
Showing 41 to 60 of 124 Records
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2023 (3) TMI 739
Levy of service tax on royalty paid to their foreign service provider under Reverse Charge Mechanism - intellectual property rights or not - M/s. Borelli Tea Holdings Ltd. granted to the Respondent non-exclusive, non-transferrable licence allowing use of its patents and trade marks for manufacture/production of tea and export thereof.
HELD THAT:- As it is an admitted fact that the trade mark and patent rights were not registered in India, which have been obtained by the Respondent for use in India from their foreign principal therefore the said rights were not governed by any law for the time being in force. Therefore relying on the decision of M/S. MUNJAL SHOWA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, DELHI (GURGAON) AND (VICE-VERSA) [2017 (6) TMI 819 - CESTAT CHANDIGARH] it is held that the amount paid by the Respondent as royalty or licence fee is not taxable in India.
There are no infirmity in the impugned order. Therefore the same is upheld and Appeal filed by the Revenue is dismissed.
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2023 (3) TMI 738
Valuation of services - inclusion of value of the free supplies in the taxable value - Abatement claim - appellant had constructed 11 culverts at the premises of India Cements Limited and paid service tax for the work on 33 % of the value and claimed 67% abatement - Department was of the view that as the appellant has received free supply of materials, they are not eligible to claim abatement under Notification No. 1/2006-ST.
HELD THAT:- The issue is no longer res integra and decided by the Hon’ble Apex Court in the case of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT]. The said judgment has taken into consideration the issue even after the amendment brought forth in Section 67 of the Finance Act, 1994 - It was held in the case that The value of the goods/materials cannot be added for the purpose of aforesaid notification dated September 10, 2004, as amended by notification dated March 01, 2005.
Thus, the demand cannot sustain and requires to be set aside - appeal allowed.
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2023 (3) TMI 737
Refund of service tax - rejection on the ground of unjust enrichment - reverse charge mechanism - remanding the matter to the Adjudicating Authority for verification of the challans submitted by the respondent - HELD THAT:- It is not disputed that service tax was paid by the respondent on a reverse charge mechanism. In such a situation, it is difficult to comprehend as to how the burden of service tax could have been passed on to any other person.
What is also important to note in the present case is that the Chartered Accountant had given a certificate dated 24.07.2015 after examining the books of accounts of the respondent and the relevant records maintained for service tax purpose, including the challans, GST returns maintained during the period from October 01, 2005 to February, 2011 - No good reason has been given by the Adjudicating Authority to reject the certificate of the Chartered Accountant. The Commissioner (Appeals) has relied upon the Certificate, as no evidence had been led by the department to substantiate that it was not correct.
Thus, there is no error in the finding recorded by the Commissioner (Appeals) that the principal of unjust enrichment would not be applicable in the present case.
Whether the Commissioner (Appeals) was justified in remanding the matter to the Adjudicating Authority for verification of the challans submitted by the respondent? - HELD THAT:- It is not disputed that the respondent had submitted the challans but as they had not been examined by the Adjudicating Authority for the reason that the refund application itself had been rejected, it would be appropriate that the Adjudicating Authority, in the first instance, examines the challans. The Commissioner (Appeals) was, therefore, justified in remanding the matter to the Adjudicating Authority for this specific purpose - As the matter is old and any delay may further burden the department with interest, the Adjudicating Authority shall make all endeavors to verify the challans at an early date, and preferably within a period of two months from the date a copy of the order passed today is produced before the Adjudicating Authority by either of the parties.
The appeal filed by the department is dismissed.
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2023 (3) TMI 696
Maintainability of petition - alternative and efficacious remedy of appeal - Levy of Service Tax - amount paid by the Petitioner to the State of Maharashtra for irrigation restoration charges - whether the writ petition should be entertained, given the availability of the alternative remedy of appeal, as argued by the Respondents? - violation of principles of natural justice.
HELD THAT:- It is well established that the availability of an alternate remedy does not necessarily preclude a writ petition under article 226 of the Constitution of India. The rule of non-interference in writ jurisdiction when an alternate remedy is available, is self-imposed. Whether a writ petition should be entertained in such circumstances depends on various factors.
In the decisions of Godrej Sara Lee [[2023 (2) TMI 64 - SUPREME COURT]] and in Greatship [[2022 (9) TMI 896 - SUPREME COURT]], Supreme Court has made a distinction between the maintainability of the writ petition and the entertainability. In the case at hand, the Respondents do not contend that the Petition is not maintainable, but they contend that it should not be entertained. This objection is based not only on the availability of an alternate remedy, but that factual enquiry is necessary for which appeal is provided under the statute.
Whether the Petitioner's argument presents a purely legal question that can be decided without any further adjudication? - HELD THAT:- The show cause notice was issued based on information received that the Water Resources Department of the State of Maharashtra was collecting non-irrigation charges from various customers for the use of water for non-irrigation purposes. The Respondents contend that the irrigation restoration charges are simply the recovery of costs for the construction of the distribution network. During the investigation, a representative of the Petitioner stated that the irrigation restoration charges were the recovery of costs for the construction of the distribution network.
Whether the services received by the Petitioner way of restoration of the command area, against payment of consideration as non-irrigation charges? - whether the extended period specified in the proviso to sub-section (1) of Section 73 of the Finance Act, 1994, read with Sections 142 & 174 of the CGST Act, 2017, should be invoked for the recovery of the Service tax? - HELD THAT:- Section 83 of the Finance Act, 1994 makes certain provisions of sections of the Central Excise Act, 1944, as in force from time to time applicable in relation to service tax as they would apply in relation to a duty of excise. One of them is Section 35L of the Act of 1944. Section 35L(b) provides that an appeal from any order passed by the Appellate Tribunal relating to, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purpose of assessment would lie to the Supreme Court. Section 35L(2) provides that determination of any question having a relation to the rate of duty shall include the determination of taxability or excisability of goods for the purpose of assessment.
Reliance was placed on the decisions of the Hon'ble Supreme Court in the case of the Coastal Container Transporters Association [[2019 (2) TMI 1497 - SUPREME COURT]]. The petitioner therein sought to distinguish the decision of the Coastal Container Transport Association, submitting that in that case, the petition was filed at the stage of show cause notice and not when the order on show cause notice was passed. The Division Bench did not accept this distinction and found that the writ petition ought not to be entertained. The Division Bench also found that there was no breach of principles of natural justice, and no case was made out. It was held that the Finance Act 1994 provided complete machinery to challenge the order of the assessment in appeals, the last one being before the Supreme Court. This decision is, thus, directly applicable to the case at hand. Further, even assuming that the first appeal would lie in this court and not the Supreme court, this is not a case where writ jurisdiction needs to be entertained when the petitioner has a remedy of a substantive appeal.
There is no patent lack of jurisdiction or complete absence of jurisdictional facts in the impugned order that would allow us to declare that there is no liability upon the Petitioner to pay the service tax. The issue at hand requires adjudication and the applicability of the provisions to the facts is disputed. The Adjudicating Officer had the jurisdiction to decide whether a particular activity attracts service tax or not, and the Petitioner has the option to file a statutory appeal to the Appellate Tribunal where the Petitioner can present all of its contentions. There is no reason why the Petitioner cannot avail of the statutory remedy of appeal - the preliminary objection raised by the Respondents that the writ petition should not be entertained, is upheld.
The Writ Petition is dismissed.
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2023 (3) TMI 695
Extended period of limitation - Non-payment of service tax - translation services received by the appellant from the various individuals taxable with effect from 01.05.2006, under Business Support Services or not - HELD THAT:- The period of dispute is from 2006-07 to 2010-11 and the tax demand was raised under reverse charge mechanism. Hence, when the tax is paid under reverse charge mechanism, the appellant would be entitled to avail credit of the same, which invariably leads to a revenue neutral situation. Thus, there is no scope to allege fraud, suppression, etc., to invoke the extended period of limitation for non-payment of tax.
The demand is possible only for the normal period. The Show Cause Notice in this case having been issued on 08.05.2014, the demand proposed and confirmed for the period prior to October 2009, is barred by limitation.
It is deemed proper to set aside the above demand by agreeing with the contentions of the Learned Consultant for the appellant that the same is hit by limitation - demand for the normal period upheld - matter remanded to the file of the Adjudicating Authority to the limited extent of working out the demand for the normal period.
Penalty under Section 78 and penalty under Section 77 of the Finance Act, 1994 - HELD THAT:- The Revenue has not made out any case of fraud, suppression, etc., and therefore, the impugned order is set aside to this extent of levying penalty under Section 78 ibid. - there are no allegations as to the violation of any of the provisions of Section 77. Hence, the penalty appears to have been imposed mechanically. Further, the Adjudicating Authority has ordered for appropriation of the amount paid including interest and there is no allegation further as to non-registration, etc., by the appellant. Thus, the appellant has made out a case for intervention for invoking the provisions of Section 80 of the Act, as it stood then. Thus, to this extent also, the impugned order stands set aside and the grounds-of-appeal, stand allowed.
The appeal filed by the assessee allowed in part and part matter on remand.
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2023 (3) TMI 694
Maintainability of appeal - appeal dismissed for failure to comply with Section 35F (pre-deposit) - simultaneously imposition of penalty under Section 76, 77 & 78 which the Commissioner (Appeals) allowed - service tax alongwith interest was paid on being pointed out - HELD THAT:- It is seen that payment of Service Tax on reverse charge mechanism using CENVAT is a valid payment. The impugned order has failed to consider merit for the appellant’s case and dismissed only for noncompliance of Section 35F. In this circumstances, the impugned order does not dealt with the entire defense of the appellant. The said order is also set aside and matter remanded to the Commissioner (Appeals) for fresh adjudication.
Appeal allowed by way of remand.
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2023 (3) TMI 693
Levy of service tax - business auxiliary service - appellant engages professional/doctors/ consultants on contractual basis - HELD THAT:- This precise issue had come up for consideration before two Benches of the Tribunal in Ganga Ram Hospital. The first decision rendered on M/S SIR GANGA RAM HOSPITAL, BOMBAY HOSPITAL & MEDICAL RESEARCH CENTRE, APPOLLO HOSPITALS, M/S MAX HEALTH CARE INSTITUTE LTD VERSUS CCE DELHI-I, CCE&ST INDORE, CCE&ST RAIPUR, CST NEW DELHI AND CST DELHI VERSUS M/S INDRAPRASTHA MEDICAL CORPORATION LTD [2017 (12) TMI 509 - CESTAT NEW DELHI] was considered in the subsequent decision in M/S SIR GANGA RAM HOSPITAL VERSUS COMMISSIONER OF SERVICE TAX, NEW DELHI [2020 (11) TMI 536 - CESTAT NEW DELHI].
Paragraphs 5,6,9 and 11 of the first decision rendered by the Tribunal on December 06, 2017 relate to the period before and after July 01,2012. The Tribunal, after a consideration of the conditions prescribed in the agreement held that the arrangement was for joint benefit of both the parties with shared obligations, responsibilities and benefits and, therefore, no service was provided by the hospital to the doctors.
The Commissioner was not justified in confirming the demand of service tax under the head "business support services".
The order dated March 20, 2017, passed by the Commissioner, therefore, cannot be sustained and is set aside - Appeal allowed.
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2023 (3) TMI 692
Short payment of service tax - SVLDR Scheme - suppression of facts from the Department regarding pending investigation against them - HELD THAT:- The issue herein is squarely covered by the ruling of Hon’ble Bombay High Court in the case of M/s. New India Civil Erectors Pvt. Ltd. [2021 (3) TMI 545 - BOMBAY HIGH COURT] where it was held that whenever and wherever the scheme talks about an enquiry or investigation or audit, the date 30.06.2019 carries considerable significance and becomes relevant. The enquiry or investigation or audit should commence prior to 30.06.2019. Though Clause (f) of subsection (1) of Section 125 does not mention the date 30.06.2019 by simply saying that a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit would not be eligible to make a declaration, the said provision if read and understood in the proper context would mean making of a voluntary disclosure after being subjected to an enquiry or investigation or audit on or before 30.06.2019. Such a view if taken would be a reasonable construct consistent with the objective of the scheme.
Further, it is observed that no mis-declaration has been found in the declaration filed under the Scheme by the appellant. Further, no enquiry was pending against the appellant as on the date of filing of the declaration under the scheme.
Appeal allowed.
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2023 (3) TMI 644
Appropriate Forum - High Court or not - Levy of service tax - manpower recruitment /supply agency service - construction services other than residential complex, including commercial / industrial buildings or civil structures / erection/ commissioning and installation service - Works Contract service - HELD THAT:- No useful purpose would be served either to the appellant or to the revenue in keeping the writ petition pending since the order impugned in the writ petition is an order of adjudication and the correctness of such an order is required to be tested by the appropriate appellate authority, who will be able to re-appreciate the factual position and also decide on any jurisdictional issue that may be raised by the appellant.
The appeal and the writ petition are disposed of by directing the appellant to file an appeal to the appropriate appellate authority challenging the order dated 29th April, 2022 and such appeal shall be filed within a period of three weeks from the date of receipt of server copy of this judgment and order after complying with the pre-deposit condition of paying 7.5% of the disputed tax.
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2023 (3) TMI 643
Need of pre-consultation before issuance of Show Cause Notice - Liability of service tax imposed on the petitioner - ocean freight charges - petitioner states that the goods imported were CIF imports and, therefore, there is no question of any service tax being paid on any service relating to ocean freight since the petitioner has not received any such service and the service, if any received, has been received by the exporter from the overseas.
HELD THAT:- The Department shall give full opportunity to the petitioner to respond to the observations in the special audit report and if the explanation is found, not satisfactory, then issue a fresh Show Cause Notice, also correcting the errors that have crept in the Show Cause Notice dated 21.04.2022. Mr. Tarun Gulati, learned Senior Counsel appearing for the petitioner submits that although the audit report itself is liable to be set aside but the suggestion from the respondent would meet the ends of justice.
The Department is at liberty to issue a fresh notice for pre-consultation. It is also directed that the Show Cause Notice, if any, would be issued only after the explanation of the petitioners in respect of observations made in the special audit report have been duly considered and after reflecting on the figures.
The petition is disposed off.
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2023 (3) TMI 642
Rejection of application filed under Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 - rejection on the ground that the same pertains to deposit of only interest and not tax dues as per Section 123 of The Finance Act (No.2), 2019 and thus no relief can be granted purely for the amount of interest u/S 124 of the said Act - HELD THAT:- The Instructions dated 06.10.2022 issued by the Central Board of Indirect Taxes and Customs in specific terms clarified that the expression “Tax Dues” would include cases where interest has been demanded by a show cause notice or order in original.
Revenue needs to revisit the claim of the petitioner - The Designated Committee (SVLDRS) under “Sabka Vishwas Legacy Dispute Resolution Scheme 2019”/respondent No.1 is directed to reconsider the claim of petitioner and pass appropriate orders within 60 days in accordance with law keeping into account the instructions issued by Central Board of Indirect Taxes and Customs.
Petition allowed.
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2023 (3) TMI 641
Levy of Service tax - liquidated damages - Section 66E(e) of the Finance Act, 1994 - HELD THAT:- The CBIC has issued a circular No.178/10/2022-GST dated 3rd August, 2022 in which it has stated its stand on the issue of taxability of various transactions claimed to be “liquidated damages”. At the time of adjudication by commissioner and hearing before tribunal, this circular was not available on record and therefore, the adjudicating authority could not take benefit of the same. While the issue of levibility of service tax on liquidated damages is a debatable issue, the CBIC has vide Circular No. 178/10/2022-GST clarified its stand on the subject in respect of GST - The said circular also clarified the stand of CBIC on the issue of forfeiture of salary or payment of bond made in the event of employee leaving the employment before the minimum agreed period.
Para 5(e) of Schedule-II of CGST Act, is identically worded as Section 66E(e) of the Finance Act, 1994 - The circular was not available to the adjudicating authority when the matter was decided and he could not examine the issue in the light of the aforesaid circular. The issue in dispute can be decided in the light of the aforesaid circular.
The matter is remanded to the original adjudicating authority to decide the issue afresh.
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2023 (3) TMI 640
CENVAT Credit - input services - contravention of Rule 4A(2) of Service Tax Rules, 1994 read with Rue 9 (1) of the CENVAT Credit Rules, 2004 - it is alleged that the Zonal offices were neither registered as input service distributors nor did the assessee receive the original invoice/bill from the Zonal offices - HELD THAT:- The Ld. Adjudicating authority had categorically found that the Respondents have obtained Central Excise Registration and is a Input Service Distributor. In that circumstances, there are no infirmity in the impugned order. Therefore the same is upheld.
The Appeal filed by the Revenue is dismissed.
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2023 (3) TMI 639
Classification of services - Technical Testing and Analysis Service or Survey and Exploration of Minerals Service? - providing services relating to Well Testing, Well Activation Works, Slick Line Services, Inspection and Monitoring of Well Testing Services, Inspection and Monitoring of Well Testing Services, Acquisition of Reservoir Data in relation to all exploration - Extended period of limitation - HELD THAT:- Reliance upon the decisions in the matter of M/S MINERAL EXPLORATION CORPORATION LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR [2015 (1) TMI 388 - CESTAT MUMBAI] as well as on COMMISSIONER OF SERVICE TAX, MUMBAI VERSUS FUGRO GEONICS PVT. LTD. [2014 (3) TMI 266 - CESTAT MUMBAI] to support that activities like providing exploration report based on survey and retail expression of mineral deposit is the service in the nature of “Survey And Exploration Of Minerals Service” and is not “Scientific or Technical Consultancy Service”
Classification being a legal issue, the appellants can contest the same at any time specially when legal position brings greater clarity later on. It is further found that the decisions relied upon by the appellants are inconsonance with board circular and largely covered the activities of the appellant’s under “Survey and Exploration of Minerals Service”.
In any case, as the cited case laws shows, department itself issued Show Cause Notices for same type of services under various different service classification. Under, the circumstances the extended period with intent to evade cannot sustain. Accordingly, there being confusion in the mind of Department itself and position having become clear through case laws in years 2014 or around, the extended period of demand cannot be invoked.
The appeal allowed both on merits as well as limitation.
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2023 (3) TMI 638
Levy of service tax - appellants constructed houses for Essar Limited. and the said houses were used by Essar Limited for their own staff - appellant argued that the service provided by them is not covered under the construction of complex service, since the residential construction was for personal use - HELD THAT:- It is not in dispute that the residential house constructed by the appellant were used by Essar Limited for its own staff. The appellants have claimed that the said use amounts to the personal use as defined in the definition of residential complex and therefore, the service provided by them is not covered under the definition of construction of complex service.
The appellants are making residential properties for the use of Essar Group for their employees - The identical service has been defined by Tribunal in the case of CR PATEL VERSUS C.C.E. & S.T. -SURAT-I [2023 (3) TMI 570 - CESTAT AHMEDABAD] where it was held that service provided by the appellant is to be treated as service provided to Govt. of India directly and end use of the residential complex by Govt. of India is covered by the definition “Personal Use” in the explanation to definition of residential complex service, the other aspects need not be considered.
Appeal allowed - decided in favour of appellant.
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2023 (3) TMI 584
Levy of service tax - Fee collected by the SEBI for various activities - in the nature of "Discharging of sovereign function" or not - non-filing of proper returns - applicability of extended period to the demand of Service Tax in the first Show Cause Notice - demand for normal period as per provisions of section 73(2A) of the Finance Act, 1994 - violation of principles of Natural Justice (second SCN) - legality in remanding back the second Show Cause Notice without considering that the same was issued as a statement of demand under Section 73(1A) of Finance Act, 1994.
HELD THAT:- In the present case, Paragraph Nos. 7 to 9 of the show cause notice dated 17/03/2016 (first SCN) refers to all the correspondence between the respondent and the Commissioner. However, it does not refer to any specific instances of fraud, collusion, misstatement or suppression of facts indulged in by the respondent. At Paragraph No. 10 of the first show cause notice, the Department only states that it appears from the correspondence referred to therein that the respondent has wilfully suppressed facts from the Service Tax Department with an intention to evade payment of service tax. It does not specify any material particulars of how wilful misstatements or suppression of facts has been indulged in by the respondent or in what manner the acts of the respondent are wilful or with an aim to evade tax.
In Cosmic Dye Chemical [1994 (9) TMI 86 - SUPREME COURT], the Hon'ble Supreme Court has also considered a similar issue on the question of what constitutes fraud, collusion or wilful misstatement or suppression of facts for the purpose of invocation of the extension of period of limitation under section 11-A of the Excise Act, where it was held that [1994 (9) TMI 86 - SUPREME COURT] - From a reading of the decision of the Hon'ble Supreme Court, it would be incumbent upon the appellant to demonstrate from the correspondence / material on record or on the specific averments made in the first show cause notice, as to how the respondent has indulged in fraud, collusion or wilful misstatement or suppression of facts. In fact all disclosures as required by the earlier notice issued by the appellant were made by the respondent in its correspondence laid before the Appellant.
Thus, the finding of fact arrived at by the CESTAT to the effect that there was no suppression, misrepresentation or fraud committed by the respondent, to enable the appellant to invoke the extended limitation clause in Section 73 is proper and based upon the correct appreciation of the record. Accordingly, it is concluded, that the substantial questions raised by the appellant in its appeal on the question of holding that the extended period of limitation was not applicable, do not arise in the present appeal, in view of the specific factual finding arrived at by the CESTAT.
The other substantial questions of law sought to be raised, as to whether the CESTAT was right in holding that the respondent was discharging sovereign function does not arise as the CESTAT has clearly refrained from giving its finding on that question. This is evident from reading of the contents of Paragraph Nos.23, 24 and 25 of the impugned order, whereat, the CESTAT had recorded that it has withheld ascertainment of the legality of the claim made by the respondent on the question of whether it was exercising sovereign functions under the SEBI Act and therefore, not liable to pay service tax.
Thus, no substantial question of law arises for our determination in the present appeal which is hereby dismissed.
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2023 (3) TMI 583
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - payments not made on or before the deadline fixed under the said Scheme - HELD THAT:- Being a show cause notice issued under Section 174 of the Central Goods and Services Tax Act, 2017 on account of the non payment of the interest and penalty amount by the petitioner, the question of interfering with the impugned show cause notice will not arise, as the same has been issued only under authority prescribed under law. However, necessarily, the respondents will have to consider the reply dated 11.05.2022 submitted by the petitioner on merits and in accordance with law and only thereafter pass final orders after adhering to the principles of natural justice including granting the petitioner the right of personal hearing.
This Writ Petition is disposed of by directing the petitioner to submit an additional reply to the impugned show cause notice dated 28.04.2022, within a period of two weeks from the date of receipt of a copy of this order.
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2023 (3) TMI 582
Unauthorized recovery made without even serving copies of the--adjudication order - Seeking for a direction upon the appellants to-consider the claim of refund, which they made in their-representation dated 28th March, 2022 - case of the-respondents/writ petitioners was that even before the order of-adjudication could be served, by way of attachment a sum of-Rs.29,14,853/- from the bank account of the first respondent-and a sum of Rs.15,43,673/- from the bank account of the-second respondent were swiped off/debited.
Whether they could have approached this Court by filing a writ-petition when admittedly their appeal against the order passed-by the Commissioner (Appeals) dated 16th March, 2021 is pending-before the Tribunal?
HELD THAT:- The prayer-sought for by the respondents/writ petitioners cannot be admitted, though not on-merits but on the ground that they cannot bypass the statutory-remedy, which they have availed and approach this Court as if-this Court is an executing Court while the appeal at the-instance of the respondents is pending before the Tribunal.
The learned advocate for the respondents has also-referred to the provisions of Finance Act, 1994 and Section-35F of Central Excise & Customs Act. As pointed earlier the-respondents were wholly unjustified in bypassing the remedy-which they have already availed by filing an appeal before the-Tribunal. However, according to the respondents the-Department is not entitled to retain anything over and above-the amount of 10% which was pre-deposited at the time of-filing appeal before the Tribunal. Such a prayer should have-been made before the Tribunal and not by way of writ petition.-More importantly, the prayer sought for in the writ petition-is to consider the representation whereas the direction issued-is a positive direction to effect refund which was-impermissible for the writ Court to do.
The appeal filed by the-Revenue is allowed and order passed by the learned writ Court-is set aside. Consequently, the writ petition stands-dismissed.
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2023 (3) TMI 581
Invocation of extended period of limitation - Valuation of services - certain charges collected from the customers towards in-room dining, in-room beverages supply and mini bar and also on laundry, Miscellaneous Income and Telephone - inclusion in the assessable value or not - Department was of the view that these charges should be included in the value of room rent and the petitioner ought to have paid service tax on these charges under “Short Term Accommodation Services”.
HELD THAT:- Admittedly the impugned proceedings are initiated invoking the extended period of limitation under Section 73 of the Finance Act, 1994. Thus, the notice issued on 16.10.2015 culminating in the impugned order dated 05.04.2017 can be sustained only if it is shown that service tax has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax.
Assuming the levy is valid, the impugned proceeding invoking the extended period of limitation cannot be sustained. To invoke the extended period, it ought to be demonstrated that service tax has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. It has been consistently held by the Hon'ble Supreme Court that any non-disclosure or claim of non-liability on the basis of bonafide interpretation of law would not enable the Respondent to invoke the extended period of limitation. This Court also finds that the attempt made by the learned counsel for the Respondent to sustain the impugned proceedings, by invoking extended period of limitation cannot be sustained, in view of the fact that the view taken by the Petitioner has also been approved by at least two High Courts - the question of existence of mental element/mens rea, which is a condition precedent for invoking the extended period, is absent, thus the invocation of extended period is unsustainable.
The proceedings having been challenged as bad for want of jurisdiction, the question of alternate remedy may not have a bearing for exercise of discretion under Article 226 of the Constitution of India. In this regard, it may be relevant to note that the remedy under Article 226 of the Constitution of India, is a discretionary remedy and existence of an alternative remedy, would not result in an embargo against exercise of jurisdiction under Article 226 of the Constitution of India, more-so, where the impugned proceedings are challenged on the ground of want of jurisdiction. The proceedings being barred by limitation, thus, the same is bad for want of jurisdiction and a nullity. In such circumstances, interference under Article 226 of the Constitution of India is warranted inasmuch as question of limitation relates to jurisdiction. An order barred by limitation is a nullity.
It appears that there is no room for invoking the extended period on the facts - the impugned order dated 05.04.2017 is thus set aside as barred by limitation and thus bad for want of jurisdiction and a nullity.
Petition disposed off.
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2023 (3) TMI 580
Levy of Service Tax - consideration received for construction services which are composite in nature including both supply of materials and provision of services - period prior to 01.06.2007 - HELD THAT:- The said issue stands answered in the case of SPRINGFIELD SHELTERS P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, COIMBATORE [2018 (10) TMI 1280 - CESTAT CHENNAI] where it was held that The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service. For the period after 1.6.2007, service tax liability under category of ‘commercial or industrial construction service‟ under Section 65(105)(zzzh) ibid, ‘Construction of Complex Service‟ under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services‟ simpliciter.
The demand cannot sustain and requires to be set aside - Appeal allowed.
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