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Service Tax - Case Laws
Showing 21 to 40 of 1616 Records
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2023 (12) TMI 1071
Sabka Viswas Scheme (SVLDRS) - petitioner not able to pay the demanded amount in time - HELD THAT:- In W.P.No.24366 of 2021 [2023 (11) TMI 899 - MADRAS HIGH COURT], a similar set of facts was already considered and a detailed order was also passed by this Court where it was held that this Court is of the view that the application, filed on 13.02.2023 consequent to the payment made by the petitioner, has to be accepted under the SVLDRS scheme by the respondent and in such view of the matter, this Court has no hesitation to direct the respondent to issue Form SVLDRS-4 to discharge the tax liabilities within a period of 30 days from the date of receipt of copy of this order.
The impugned order dated 24.08.2021 is set aside. Further, the 2nd respondent is directed to accept the payment made by the petitioner in terms of Form SVLDRS 3 and issue a Certificate of Settlement in Form SVLDRS 4 within a period of four weeks from the date of receipt of copy of this order - the writ petition is allowed.
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2023 (12) TMI 1070
Refund of service tax - Principles of unjust enrichment - incidence of duty - it is alleged that appellant had not passed on the burden of service tax to its client departments.
According to the Revenue, unjust enrichment would apply to this case because the contracts were for an all inclusive price (including duties and taxes) and therefore, the appellant must have had reckoned the service tax into the total cost while bidding and at the time of bidding, there was no exemption from service tax and therefore, the appellant must have included in its invoice price, the service tax element.
HELD THAT:- This finding because section 102 provides for refunds only if the contracts were signed prior to 1 March 2015. During that period, no service tax was payable because of exemption notification no. 25/2012-ST. cannot be agreed - it is found inconceivable that the appellant would have anticipated that the exemption from service tax would be withdrawn even before submitting its bids and would have included the service tax element in the bills.
It is found impermissible to hold that the appellant had indirectly passed on the burden of the service tax to its client government departments. Once this anomalous and baseless presumption that the service tax would have been indirectly passed on by the appellant to its client government departments is removed, no basis remains for rejecting the refund claim or crediting it to the Consumer Welfare Fund.
What distinguishes the present case from UNION OF INDIA VERSUS SOLAR PESTICIDE PVT. LTD. [2000 (2) TMI 237 - SUPREME COURT] is the fact that no service tax was paid when the appellant submitted its bids to the clients. Therefore, there is no scope for passing on the burden of any service tax at that stage. After the service was rendered, it was only entitled to the amounts which it bid and which were accepted in the contract and not to any additional amount as service tax. The contracts specifically exclude any additional payments towards service tax - The Commissioner’s reasoning in the impugned order is based on the presumption as to how the appellant would have decided to bid an amount and we find no room in law to speculate as to how the bids would have been made by the appellant. It is their business decision and there is no presumption in law that whenever bids are made, elements X, Y or Z have been reckoned. Based on this presumption as to how the appellant would have made its bids and further, based on the factually incorrect assumption that at the time of making the bids, service tax was not exempted and hence would have been reckoned by the appellant while preparing its bids, the Commissioner held that unjust enrichment would apply.
The impugned order deserves to be set aside and is set aside - Appeal allowed.
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2023 (12) TMI 1069
Recovery of service tax alongwith interest and penalty - Business auxiliary services - spares and parts - incentive received from the Atlantic Lubricants and Specialities Pvt. Ltd. for buying minimum quantity of goods - amount received on account of colour difference charges of vehicles - rent received for providing table space to banking and financial institutions - HELD THAT:- It is found that neither in the show cause notices, nor in the impugned order, the Ld. Commissioner has mentioned any specific clause of Section 65 (19) of Business Auxiliary Service (BAS) under which service tax demand is sought to be made - it is also found that the Tribunal has consistently taken the view that specific clause of ‘Business Auxiliary Service’ is required to be mentioned and if not mentioned, the entire demand is liable to be set-aside.
Reference made to the decision of the Tribunal in the case of SYNIVERSE MOBILE SOLUTIONS PVT LTD., (EARLIER TRANSCIBERNET INDIA PVT LTD.) VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, HYDERABAD – IV [2023 (6) TMI 463 - CESTAT HYDERABAD] where it was held that On this issue it is seen that Tribunals have been consistently holding that it is essential for the Show Cause Notice issuing authority to clearly indicate the sub-clause under which the service tax in question would fall.
Demand of Service Tax on spares and parts - HELD THAT:- It is found from the documents placed on record at Page No. 116 to 124 of the Appeal Paper book that services and spares are charged separately from the manufacturer for the warranty period and service tax was paid on the value of services and on the value of spare parts, VAT/Sale Tax was paid as the sale of spare parts is considered to be sale of goods and liable to VAT. Therefore, the service tax is not leviable on the sale of spare parts - reference made to Department Circular No. 699/15/2003-CX dated 05.03.2003 which specifically clarifies that the sale of parts, accessories and consumables are not includible in the value of taxable services provided the value of such consumables are shown separately and in the present case, we find that the assessee has shown the value of service and value of spare parts separately.
Service tax on amount of incentive received from the Atlantic Lubricants and Specialities Pvt. Ltd. for buying minimum quantity of goods - HELD THAT:- It is found that such receipt of incentives/trade discount is not towards provision of any service which fact is clear from the perusal of the agreement dated 01.10.2009 entered into between the parties which is placed at Page No. 195 to 200 of the Appeal Paper Book - it has been held in many case by the Tribunal has held that the demand of service tax is not sustainable on incentives and trade discounts received on the buying minimum quantity of goods.
Demand of service tax under Business Auxiliary Service on the amount received on account of colour difference charges of vehicles - HELD THAT:- Such charges are in relation to sale of car and is related to the value of car sold and not a consideration for any service, let along BAS. To this effect, the appellant has produced the certificate of the Chartered Accountant alongwith ledger which is on record of the appeal paper book - in the appellant’s own case, for the previous period, the Ld. Commissioner (Appeals), Chandigarh set-aside the demand on this issue on the ground that there is no provisions of service involved in this case.
Demand of service tax on rent received for providing table space to banking and financial institutions - HELD THAT:- It is found that the amount received by the appellant is for providing space and not for promoting the business of banks/financial institutions. The provisions of space cannot be considered as promotion of business of the person to whom the space has been provided as held in various decisions.
The impugned order confirming the demand amounting to Rs. 18,11,691/- under Section 73 of the Finance Act, 1994 is not sustainable in law, and therefore, the same is set aside - once the demand is set aside, the question of interest and penalty does not arise - appeal of assessee allowed.
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2023 (12) TMI 1068
Non-payment of Service Tax - Cargo Handling Services - evacuation of Ash and Nuisance Free Disposal at the abandoned mines of CCL/BBCL - Mining Services - transportation of Coal - Supply of Tangible Goods Service - GTA Service - services availed for hire of trucks from various persons for transportation of coal - Violation of CCR '04 by not paying 6% on the value of exempted services.
Demand of Service Tax under Cargo Handling Service - HELD THAT:- It is observed that the Appellant has rendered the service to Tenughat Vidyut Nigham Limited, Damodar valley Corporation and Mejia Thermal Power Corporation, for evacuation of ash from different Ash Ponds located at the power stations. The ash was transported to the abandoned mines of CCL, ECL, BCCL for the disposal of ash - the ash was transported in automatic dippers/dumpers/trucks and unloaded the same into the abandoned mines, by automatically sliding down the ash in the core of such mines - A perusal of the work order reveal that the primary service in this case is transportation and the loading and unloading work is ancillary to the transportation service - the Appellant has rendered transportation service. In terms of Rule 2(1)(d)(v) of the Service Tax Rules, 1994, the recipients are liable to pay service tax for the GTA services received by them - the demand of service tax from the Appellant under the category of 'Cargo Handling Service' is not sustainable.
Demand of Service Tax under the category of 'Mining Services' - HELD THAT:- The services rendered by the Appellant was transportation of coal. They have not received any contract for actual mining of coal - A perusal of the work order received by them would reveal that it is a composite contract involving transportation as the primary service. All other services are incidental or ancillary to transportation service - the adjudicating authority has not brought in any evidence to substantiate the allegation that the appellant has rendered 'Mining Service' - the service rendered by the Appellant is transportation service. As the receiver has already paid service tax in terms of Rule 2(1)(d)(v) of the Service Tax Rules, 1994, the demand confirmed in the impugned order under 'Mining Service' against the Appellant is not sustainable.
Demand of Service Tax on the transportation services rendered by other transporters as sub-contractors - HELD THAT:- The transporters have not issued any 'Consignment Notes'. In respect of this transportation service, the Appellant has raised invoice for the full value to their clients CCL/BCCL and the receiver has paid service tax on the full value of the contract. As the sub-contractors who provided the transportation service has not issued any 'consignment note', it is observed that the Appellant are not liable to pay service tax under the category of GTA service on reverse charge - Since the sub-contractor who rendered the transportation service to the Appellant has not issued any 'consignment note' for the transportation service, it is held that the Appellant is not liable to pay service tax as recipient of GTA Service. As the Appellant has raised the invoice on the full value and the recipient has paid service tax under GTA on the full value, demanding Service Tax again from the sub-contractor for the transportation service would amount to 'double-taxation' - the demand of service tax from the Appellant on reverse charge basis under GTA service is not sustainable.
Extended period of limitation - penalty - HELD THAT:- It is observed that the issue involved in the Work Orders covered by earlier Notices were also related to the issue whether Evacuation of Ash from the ponds and transporting it out side ti fill the abandoned mines. Earlier Notice demanded service tax under the category of ,Cleaning Service, for the same work. Thus, it is evident that even though the Work Orders are different, the issue involved is the same - the department has not brought in any evidence to substantiate the allegation of suppression in this case, to invoke extended period - the adjudicating authority has rightly dropped the demands on the ground of limitation and not imposed penaltied under Section 78 of the Finance Act, 1994 and Rule 15 of the CCR ’04 - the department’s appeal is not sustainable and it is liable for rejection.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 1067
Levy of service tax - Business Auxiliary service or not - Appellant only receives distributor’s profit margin - BSNL pays service tax on the wholesale price including the distributor’s profit margin, thus appellant were not paying service tax on this income received - exemption under Sl. No.29(f) of the mega Exemption Notification No. 25/2012 – ST dated 20-06-2012 - dispute in the instant case relates to the period 2015-16 whereas the Show Cause Notice was issued on 30-12-2020 - invocation of extended period of limitation - HELD THAT:- The Appellant submits that they are distributors of BSNL Prepaid/Post-paid SIM, Vouchers and are engaged for sale and distribution of BSNL products. The relation between them and BSNL is that of buyer and seller. There is no service provider/service receiver relationship. The Appellant does not provide any service and does not receive any service charges from BSNL. They only receive distributor’s profit margin. BSNL supplies these cards etc. with fixed Maximum Retail Price (MRP) to them which is inclusive of Service Tax reduced by distributor’s profit margin which is sold by them to end users at MRP. The difference is the distributor profit margin. BSNL pays service tax on the wholesale price including the distributor's profit margin.
The issue is no longer res integra as the Tribunal Kolkata has decided the issue in Appellant's own case M/S KEDIA COMPUTER SERVICES VERSUS CCEX., CUS. & S. TAX, BHUBANESWAR [2020 (7) TMI 183 - CESTAT KOLKATA] for the period July’2003 to November’2004 and December’’2004 to July’2005 while dealing with identical facts has held that there is no agency service or sales promotion service provided in such transactions, but it is a case of sale/purchase of item from BSNL on principle to principle basis which is pure trading activity and on the cellular products, the BSNL has already discharged Service Tax, hence, demanding service tax again from the trader would amount to double taxation.
Thus, the demand confirmed in the impugned order is not sustainable on merits. Since the demand itself is not sustainable the question of demanding interest or imposing penalty does not arise.
Extended period of limitation - HELD THAT:- The dispute in the instant case relates to the period from 2015-16 whereas the Show Cause Notice was issued on 30-12-2020 i.e. beyond the normal period of limitation under Section 73(1) of the Act. The normal period of limitation under Section 73(1) is 30 month from the relevant date while the Show Cause Notice is issued after lapse of 4 year 9 months. Accordingly, the demand is liable to be set aside on the ground of limitation also.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 1066
Non-payment of service tax - Business Auxiliary Service - providing services of 'Sizing of coal' to their customers - Appellant while invoicing the sale of coal has included all the components of its sale price of coal which includes the sizing charges and paid applicable VAT on such assessable value as per the State Laws - HELD THAT:- The issue is no longer res integra, as the Tribunal Kolkata Bench has decided the issue in favour of the Appellant in the case of M/s Integrated Coal Mining Ltd. Vs Commissioner of Central Excise and Service Tax, Bolpur [2021 (1) TMI 179 - CESTAT KOLKATA] where it was held that Sizing of coal is an incidental and ancillary process to make coal marketable and thus complete “manufacture” of coal and to make it into “excisable goods” as per Section 2(d) of the Central Excise Act. The process of sizing of coal is also therefore outside Section 65(19) of the Act since it is a process in the manufacture of the final product, sized coal.
The demands confirmed in the impugned order is not liable to service tax under the category of 'Business Auxiliary Service' - the demands of service tax, interest and penalty confirmed in the impugned order set aside - appeal allowed.
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2023 (12) TMI 1065
Penalty u/s 78 of the Finance Act, 1994 - Service Tax along with the interest is paid by the assessee on commission income before issuance of SCN - Classification of services - income booked as godown rent - Renting of Immovable Property Service (RIPS) or not.
Whether penalty is imposable under Section 78 of the Finance Act, 1994 when service tax along with interest thereon has been paid before issue of the SCN and whether further penalty of Rs.5,000/- imposable under Section 77 of the Finance Act, 1994? - HELD THAT:- The Appellant has deposited the Service Tax of Rs.4,05,205/- along with interest of Rs.1,30,876/- on 25.02.2009 without raising any dispute. In terms of Section 73(3) of the Finance Act, 1994, where the Service Tax along with the interest is paid by the assessee on the basis of tax ascertained by the Central Excise Officer, no SCN is required to be served - this view has been held by this Tribunal in the case of M/S. NATIONAL POWER ENGINEERING COMPANY VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, SILIGURI COMMISSIONERATE [2023 (7) TMI 361 - CESTAT KOLKATA] - imposition of penalty under Section 78 of the Finance Act, 1994 is not warranted in this case - the penalty imposed under Section 78 is set aside.
Whether Service Tax of Rs.34,865/- is payable under the category of Renting Immovable Property Services (RIPS) during the period 2007-08 & 2008-09 for the amount shown as 'godown rent' in the balance sheet? - HELD THAT:- From the rate payable by ICICI bank as per the agreement mentioned above, it is evident that the land has been used for parking of the vehicles by ICICI bank. Accordingly, the Appellant are entitled for the exemption provided under Clause (c) of Explanation 1 to Section 65(105) (zzzz) of the Finance Act, which specifically excludes the land used for parking purposes from levy of service tax under the category of RIPS. Accordingly, the demand of Rs.34,865/- confirmed along with interest and penalty in the impugned order is not sustainable and the same is set aside.
Penalty imposed under section 77 of the Finance Act - HELD THAT:- It is observed that the penalty was imposed for non registration and not filing the returns and non-payment of the tax in time - the Appellant has been filing returns regularly. The demand confirmed in the impugned order has been held as not sustainable. In view of the above, the penalty under Section 77 is not imposable and accordingly the same is set aside.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 1011
Maintainability of appeal - appeal dismissed on the ground of being filed beyond the period of limitation - cessation of right of petitioner to get legitimate relief which involves a wide range of legal interpretations as well as involves the same question of law for the previous and subsequent assessment years, for which the same elucidation is involved - compliance with the principles of natural justice or not - HELD THAT:- Under normal circumstances this Court would not exercise any discretion in the matter on account of clear statutory mandate for fixing time limit for preferring an appeal before the Commissioner of Appeals. However, considering the fact that the appellant is a local authority and the issues which have been the subject matter of adjudication before the authority culminating in an order dated 24th August, 2017 are all recurring issues, the appellant, in our opinion, should be granted one opportunity to agitate their contentions so that a decision on merits is arrived at rather non-suiting the appellant municipality on a technical ground. This discretion cannot be exercised in all cases and this Court is of the view that the case on hand is a rare case where the municipality is contesting demand raised by the Service Tax Commissionerate. That apart, in all probabilities the appellant would have complied with the pre-deposit condition while preferring the appeal before the learned Tribunal.
The order passed by the learned Tribunal as well as the order passed by the Commissioner of Appeals is set aside and the appeal stands restored to the file of the Commissioner of Appeals, Siliguri - Appeal allowed.
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2023 (12) TMI 1010
CENVAT Credit - erection of transmission line towers - case of the appellant is the transmission towers which it had erected were for transmission of electricity and hence they are fully exempted - levy of penalty - HELD THAT:- The question is no longer res integra and it has been the consistent view in several precedent decisions that the expression ‘services relating to transmission of electricity’ in the two notifications has a wide ambit and includes the services of installation of transmission towers for electricity and no service tax is payable - reliance placed in the case of M/S. KEC INTERNATIONAL LTD. VERSUS COMMISSIONER OF CGST, GURGAON AND COMMISSIONER OF S.T., DELHI [2022 (8) TMI 992 - CESTAT CHANDIGARH].
As the entire service tax is exempted as no service tax has to be paid by the appellant. Consequently, the penalties imposed under sections 76, 77 and 78 of the Finance Act also cannot be sustained.
The impugned order is set aside - Appeal allowed.
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2023 (12) TMI 1009
Levy of service tax - Business Auxiliary service or not - commission paid by the appellants to the commission agents - reverse charge mechanism - Revenue neutrality - extended period of limitation - HELD THAT:- The appellants are manufacturers of tyres; they are clearing the tyres in the domestic market and are also exporting to other countries; they have appointed agents, overseas, to procure orders for such tyres; as per the orders confirmed by the agents, the appellants export the tyres and pay the agents a certain commission. The services rendered by agents abroad results in the export of the goods manufactured by the appellant. Thus, the services rendered by the agents are in the direction of promoting the business of the appellants. Undoubtedly, the business of the appellant is in India - It is found that the effect of the services rendered by the overseas agents, results in export of tyres by the appellant, which is their business; to this extent, it is found that the categorization of the services under “Business Auxiliary Service” is correct. Moreover, it cannot be said that the services are received abroad though, they are certainly performed outside India; as long as the recipient and his business are in India, it cannot be said that the said service is not received in India. Receipt of the service takes the colour of recipient of the service that is to say receipt of service is decided by the recipient. The services rendered by the agents are not a personalized service availed by the appellants on their visit to abroad; moreover, by no stretch of imagination, the appellant being a body corporate, services cannot be held to have been received and enjoyed overseas, as they have no place of business abroad. Understandably, the benefit of the service accrued to the business of the appellant in India and therefore, to that extent, receipt of the services is certainly in India and not abroad. To this extent, the contention of the Revenue is correct - there are no infirmity in the findings of the OIO and OIA to the extent that the appellants have received services from foreign agents who have procured order outside India against which they had supplied the goods and thus have rendered themselves liable to pay service tax on Reverse Charge Mechanism in terms of Section 66A of Finance Act, 1944 and the Taxation of Service (Provided from Outside India and Received in India) Rules, 2006.
Revenue neutrality - HELD THAT:- It is found that the Scheme of Service Tax and Excise Duty work on the principle of a chain of paying the duty and availing the credit. It is not correct to argue that the service tax paid could have been availed as credit and therefore, non-payment of service tax has not made any material difference to the Revenue. The principle of netting of duty is not in operation. For a smooth flow of goods and seamless procedures, a system of payment of duty and availing credit has been put in place. Breaking of this chain for whatever logic would entail in chaos which is neither a principle envisaged nor an intended result under the Scheme of taxation.
Extended period of limitation - HELD THAT:- It is apparent from the records that the appellant and the Department were in constant correspondence and litigation in this regard. Thus Revenue has not made out any case for invocation of the extended period. Therefore, we are of the considered opinion that extended period cannot be invoked to this extent.
Both the appeals are partially allowed to the extent of limitation - it is held that the demands be restricted to the normal period; however, penalties imposed on the appellants are set aside - appeal allowed in part.
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2023 (12) TMI 1008
Levy of service tax - business auxiliary service or not - overseas Banks has deducted certain Bank charges from the export realization of the appellant’s export of goods while remitting the export proceeds to the Indian Bank of the appellant - applicability of reverse charge mechanism - HELD THAT:- In the present case undisputed fact is that the bank charges deducted by the Foreign Bank while remitting the export proceed received from the Foreign Country to the exporters Indian Bank was demanded Service Tax - it is found that there is no contract or understanding between appellant and the Foreign Bank. The appellant being exporter of goods is exclusively dealing with Indian Bank i.e HDFC Bank of the appellant. In such case if any charge is collected by the Indian Bank from the appellant the said activity would be liable to Service Tax that too in the hands of the Bank. In the present case the dealing is clearly between the Foreign Bank and Indian Bank, therefore in such case the appellant is not a service recipient of the Bank charges collected by the Foreign Bank from the payment remitted to the Indian Bank.
The Indian Bank has only collected such charges from the appellant as a reimbursement which was born by the Indian Bank while transacting with the Foreign Bank. Therefore, the appellant even though bearing the charges as a reimbursement the same cannot be said to be service charges - in the present case the demand of Service Tax was raised under the head of BAS which is absolutely incorrect. Therefore, on this count also the demand of Service Tax will not sustain.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 1007
Classification of services - technical inspection and certification service - activity of X-Ray of pipeline - HELD THAT:- As per the definition of inspection and certification service, apart from inspection, certification is also required whereas in the present case there is no certification found on record therefore on that basis the activity of X-Ray on the material cannot be classified as inspection and certification charges - the submission of the learned Counsel is also convincing that since the service was provided along with material it is classifiable as works contract service.
The service is similar to the photography service and in M/S. JAIN BROTHERS & M/S. PUNJAB COLOUR LAB. VERSUS CCE, BHOPAL [2008 (11) TMI 58 - CESTAT, NEW DELHI] and COMMISSIONER OF CENTRAL EXCISE, RAIPUR VERSUS AJANTA COLOR LABS [2008 (12) TMI 135 - CESTAT NEW DELHI] in case of photography, since it is provided along with material. It was held that the service is qualified as works contract service - Applying the ratio of the said judgment, we are of the view that the service in the present case is qualified as works contract service, for this reason also the demand under wrong head i.e inspection and certification service will not be sustainable.
The demand in the present case is not sustainable on multiple counts - the impugned order is set aside - Appeal allowed.
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2023 (12) TMI 1006
Recovery of Service Tax - collection of service charge from the customers besides the price of the food - no show charges (amount forfeited advance as was received for providing accommodation service) - extended period of limitation.
Whether the service charges collected besides the price of the food while rendering the restaurant service, the appellant was liable to pay tax on the said amount? - HELD THAT:- It is an admitted fact that the amount in question is received by the appellant while providing the restaurant service from their customers/recipients of the said service. In the light of section 67 as recorded above, it shall be the amount as part of consideration received for rendering the taxable service. Though the defence taken by the appellant is that they were not retaining this amount and were distributing the same among the hotel staff, hence, they were not liable to pay service tax of this amount - service tax in case of supply of food etc. in restaurant is being charged on abatement basis on the amount collected by the provider of restaurant service from the recipients thereof the TRU Circular No.334/3/2011 dated 28.02.2011 has also been referred, wherein it has been held that separation of certain portion of the bill as service charge will not represent the full value of all services rendered by the restaurants - there are no infirmity in those findings in the order under challenge when the demand of Rs.1,73,211/- on service charges has been confirmed by the Commissioner (Appeals). This issue is decided confirming appellant liability to pay service tax on service charges collected besides the price of food.
Whether the amount of „no show charges‟ i.e. the amount forfeited advance as was received for providing accommodation service, is the consideration for providing the declared service by the appellants? - HELD THAT:- In the present case admittedly there is no separate fee or charges recovered by the appellant from the customers/ recipients of hotel accommodation service, for not being appearing to attend the said service. There was no express nor implied contract for non-appearance for availment of accommodation service between the parties. The consideration was paid by the recipient only for accommodation service on which the service tax liability was duly discharged. This issue about forfeiture of the amount received by a hotel from a customer on cancellation of the booking whether to be liable to pay service tax under section 66 E (e) has already been dealt with by this Tribunal in the case of Lemon Tree Hotel [2019 (7) TMI 767 - CESTAT NEW DELHI], South Eastern Coalfields Ltd. [2020 (12) TMI 912 - CESTAT NEW DELHI] the Tribunal has held that the retention of amount on cancellation would not attract service tax under 66E (e) - the adjudicating authority below has wrongly held the „no show charges‟ as a consideration for providing declared service.
Whether demand is barred by limitation and the penalty need to be waived in the given facts and circumstances? - HELD THAT:- The demand in question pertains to the period from July, 2012 to September, 2015 and the Show Cause Notice is of April 2016. Resultantly the major demand i.e. from July, 2012 to March, 2015 is the demand for the extended period. And that extended period should not have been invoked by the Department - Since the issue is observed to be an interpretational, imposition of penalty is also not warranted in the given circumstances.
As a result of findings on three of the issues, except for the miniscule demand for the period w.e.f. April 2015 to September 2015 i.e. for the normal period, that too, on the amount of service charges collected, the entire demand is hereby set aside - Appeal stands, accordingly, partly allowed.
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2023 (12) TMI 1005
Classification of services - Erection Installation of Scaffolding - manpower supply/recruitment agency service or Erection Installation and Commissioning Service? - abatement claim - taxability of service provided to Reliance Industries Ltd. (SEZ) Jamnagar - levy of service tax on differential value arising between the figure shown as credit of service charge in the books of accounts and ST-3 return on account of credit shown twice once against receipt of service charge and second the value taken from 26-AS - Time Limitation.
HELD THAT:- From the contract order of Leo Coats (I) Private Limited, it is clear that the appellant has provided the service of Scaffolding, Erection and Dismantling. From the nature of the service, there is no doubt that the service does not fall under the Man-power recruitment or supply agency service. Moreover, the job is not on the basis of man hour or number of man power but it is on the quantum of work and the rate is also as per cubic meter of Scaffolding, Erection & Dismantling, therefore, the service is undisputedly does not fall under Manpower Agency Service but falls under Erection Installation & Commissioning Service. The Appellant considering the service as Manpower Recruitment & Supply Agency Service, availed the abatement of 75% and paid the service tax only on 25%. However it is not in dispute that on 75% of the Service provided by the appellant, the service recipient has discharged the service tax, which is clear from the work contract as well as the confirmation given by M/s Leo Coats (I) Private Limited.
The appellant’s service is classifiable under Erection Installation & Commissioning Service but the fact remains that on the entire service the service tax was paid i.e. 25% by the appellant and on 75% by the service recipient. Since the entire service has suffered the service tax only for technical reason the department has no right to demand the service tax twice, therefore, on this ground, the service tax demand on the basis of is not sustainable. This issue has been considered time and again and in the following judgments, it has been held that service tax cannot be demanded twice even though the person who is liable to pay the service tax has not discharged the service tax but some other person has discharged the service tax on the same service.
It is settled that once the service has suffered the service tax irrespective of anyone paid the service tax, the service tax cannot be demanded twice. Therefore, we hold that in respect of Erection Installation Commissioning Service, the service tax demand is not sustainable. Hence the same is set aside.
Service provided to Reliance Industries Limited (SEZ) Jamnagar Unit - HELD THAT:- It is a settled law and even as per the SEZ Act, that any service provided to SEZ is exempted from payment of service tax. In this regard in the case of CCE Patna vs Advantage Media Consultant, [2008 (3) TMI 59 - CESTAT KOLKATA], it was held When the amount is collected for the provision of services, the total compensation received should be treated as inclusive of service tax due to be paid by the ultimate customer of the services unless service tax is also paid by the customer separately. When no tax is collected separately, the gross amount has to be adopted to quantify the tax liability treating it as value of taxable service plus service tax payable - the service tax demand on the service provided to SEZ is not sustainable.
Time Limitation - HELD THAT:- It is found that in the submission of the appellant that the show cause notice has not expressly alleged any ingredient such as suppression of fact, misdeclaration, fraud, collusion etc with intent to evade payment of duty, the extended period cannot be invoked. Moreover, the appellant is a registered unit, was paying service tax on 25% of the service charges and were filing regular ST-3 Returns, therefore, it is not found any suppression of fact on the part of the appellant. Accordingly, the remaining payment being covered under extended period, will not sustain. Hence, the same is set aside on the ground of time bar.
The service tax demand is not sustainable. Hence, the same is set aside. Appeals are allowed.
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2023 (12) TMI 1004
Non-payment of service tax - providing non-scheduled operation of aircraft for the period upto 30.11.2009 by making the services of aircraft available to various entities for travelling to places in India pre-fixed and pre-intimated on payment of charges, based on duration and destination - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- In Pushpam Pharmaceuticals Company [1995 (3) TMI 100 - SUPREME COURT], the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since “suppression of facts’ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty.
Mere suppression of facts is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of duty. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked. Thus, mere non disclosure of the receipts in the service tax return would not mean that there was an intent to evade payment of service tax.
This issue was also examined at length by this Bench in M/s G.D. Goenka Private Limited vs. The Commissioner of Central Goods and Service Tax, Delhi South [2023 (8) TMI 995 - CESTAT NEW DELHI] and after referring to the provisions of section 73 of the Finance Act, the Bench observed Suppression of facts has also been held through a series of judicial pronouncements to mean not mere omission but an act of suppression with an intent. In other words, without an intent being established, extended period of limitation cannot be invoked.
The impugned order dated 31.01.2018 passed by the Commissioner (Appeals) is, accordingly, set aside - Appeal allowed.
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2023 (12) TMI 1003
Levy of service tax - Construction of Residential Complex services (CRC) - Commercial or Industrial construction (CIC) - demand prior to 1.6.2007 - HELD THAT:- The contracts are entirely composite in nature involving both element of service as well as supply of goods. The Hon.’ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] has held that the demand of service tax on composite contracts cannot be made prior to the introduction of WCS (1.6.2007). Following the said decision, it is opined that the demand prior to 1.6.2007 requires to be set aside.
After the period 1.6.2007 the department has raised the demand under the category of Construction of Residential Complex services and Construction of Commercial or Industrial Construction services - HELD THAT:- The said demand cannot sustain for the reason that the contracts involved are again, composite in nature, involving both rendering of services as well as supply of goods. The Tribunal in the case of Real Value Promoters Pvt. Ltd. and Others Vs. CGST and Central Excise, Chennai [2018 (9) TMI 1149 - CESTAT CHENNAI] had observed that even after 1.6.2007 the demand of service tax on composite contracts has to be under works contract services and the demand under Construction of Residential Complex services or Commercial and Industrial Construction services cannot sustain.
The decision rendered by the Tribunal in the case of Real Value Promoters was followed by the Tribunal in the case of Jain Housing and Construction Ltd. Vs. CST [2018 (9) TMI 1149 - CESTAT CHENNAI] In the said decision, the Tribunal set aside the demands raised under Residential Complex Services observing that the demand raised under such services after 1.6.2007 on composite contracts cannot be sustained.
The demands raised under construction of Residential Complex Services and Commercial or Industrial Construction Services for the disputed period cannot be sustained and requires to be set aside - the impugned order is set aside - appeal allowed.
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2023 (12) TMI 955
Levy of service tax - rental income, compensation amounts received and the legal expenditure displayed on the official Website of Telangana Waqf Board - petitioner-Waqf Board claimed that it has no property nor given any property for lease/rent for commercial purpose - jurisdiction of respondent No. 3 to pass impugned order - time barred by the period prescribed in Section 73(1) of the Act or not - HELD THAT:- The relevant assessment years in the impugned proceedings are between 2014-15 to 2017-18. Indisputably, from April, 2014 to 02.06.2014 as the State was united the jurisdiction was with the Principal Commissioner, Visakhapatnam. The petitioner is not disputing that after 02.06.2014 the respondent No. 3 is having jurisdiction to conduct proceedings over the disputed issue. It is not the case of the petitioner that the properties referred to in the impugned proceedings and the order are not within the territorial limits of the State of Telangana and within jurisdiction of the respondent No. 3 - the location of the tax payer is crucial to determine the jurisdiction. As the petitioner and the related properties are situated within the jurisdiction of the respondent No. 3 by the date of institution of proceedings we find no discrepancy of jurisdiction of the respondent No. 3 in the proceedings.
The other essential contention put-forth is that, as part of cause of action is time barred, the entire proceedings shall fail is also not found acceptable, since the tax liability and its effect is distinct for every assessment period and each lapse would give rise to separate cause of action - Further as the limitation is a mixed question of fact and law, to arrive at just conclusion fact finding is essential, therefore appropriate jurisdiction for scrutinizing the relevant material, would be the appeal. In addition, though the petitioner has asserted that a part of time barred cause of action would effect rest of the period has remained unsubstantiated with any legal position.
The petitioner is statutory body. As per the Wakf Act, 1955 the petitioner has to maintain the finances of the wakf institutions by exercising superintendence over the manager of the wakf/mutawalli and even in audit of the accounts of wakf properties. Further, Section 58 of the Wakf Act contemplates that the petitioner is liable in case of default by mutawalli who refuses or fails to pay any revenue, cess, or tax due to the Government or any local authority. In this statutory prescription, the petitioner’s claim that it has no concern is found untenable. That apart though the petitioner asserted that the services are exempted from the tax no such material has been placed for consideration. Be that as it may, it is open for the petitioner to place the relevant material before the appellate authority and claim.
The contention of the petitioner as to the jurisdiction has no merit and in absence of tenable grounds for judicial review under Writ Jurisdiction, the extraordinary jurisdiction cannot be exercised - petition dismissed.
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2023 (12) TMI 954
Recovery of service tax alongwith interest - sale and renting of space for advertising purposes from 01.05.2006 onwards - invocation of extended period of limitation.
Liability of appellant to pay service tax - HELD THAT:- The appellant is a statutory corporation formed under Road Transport Corporation Act, 1950 and is an instrumentality of the State Government and is operating its buses for the convenience of travelling public within and outside the state of Himachal Pradesh. Further, the corporation is not directly engaged in advertising business and does not possess expertise as an advertisement consultant - In order to prove the payment of service tax, the appellant has also placed on record the affidavit of one Mr. Parveen Bansal, Director of M/s Pisces Communications Pvt. Ltd. alongwith the copies of Challan in order to establish the payment of service tax of Rs. 16,19,883/- in the Government Treasury. They have also placed on record the copies of various challans evidencing the payment of service tax by M/s Pisces Communications Pvt. Ltd. Since, the service tax of Rs. 16,19,883/- stands deposited by the agent of the appellant, the same cannot be demanded again from the appellant - the demand of service tax alongwith interest and penalty is not sustainable in law and therefore the same is set aside.
Extended period of limitation - HELD THAT:- Since the appellant is a State Government Undertaking it cannot be inferred that they had an intention to evade payment of tax - the coordinate bench of the Tribunal in the case of M/S GD GOENKA PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, DELHI SOUTH [2023 (8) TMI 995 - CESTAT NEW DELHI] has considered in detail the issue of limitation and what is required to be proved by the Revenue in order to invoke the extended period of limitation to confirm the demand - extended period of limitation cannot be invoked.
The impugned order is not sustainable in law on merit as well as on limitation and therefore, the same is set-aside - appeal of the appellant allowed.
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2023 (12) TMI 953
Levy of service tax - amount retained by the appellant from fees of the Doctor on account of infrastructure support to the doctor - non compliance of the procedure of Rule 6(3A) can lead to a demand under Rule 6(3) despite the fact the appellant have reversed the amount in terms of Rule 6(3A) of Cenvat Credit Rules or not - extended period of limitation.
Whether the appellant is liable to pay service tax on the amount retained from the fees received on behalf of the doctors for treatment of patient? - HELD THAT:- This issue is no longer res-integra as in the various judgments, it has been held that the part of the amount of doctor’s fees retained by the respondent towards infrastructure support is not liable to payment of service tax - reliance can be placed in M/S SIR GANGA RAM HOSPITAL VERSUS COMMISSIONER OF SERVICE TAX, NEW DELHI [2020 (11) TMI 536 - CESTAT NEW DELHI] and 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] - thus, the issue is settled in favour of the assessee, therefore, demand on this count is not sustainable.
Whether demand of cenvat credit is sustainable under Rule 6(3) on the ground that the appellant have not followed the procedure such as intimation to opt for Rule 6(3A) was not given? - HELD THAT:- There is no dispute that the appellant have correctly paid the amount as required under Rule 6(3A) of Cenvat Credit Rules, 2004. The only lapse on the part of the appellant is that they have not given intimation to the department for opting of this option - merely for a procedural lapse when the amount was correctly paid under Rule 6(3A), no demand is sustainable - reliance can be placed in M/S. CRANES & STRUCTURAL ENGINEERS VERSUS COMMISSIONER OF CENTRAL EXCISE [2016 (8) TMI 387 - CESTAT BANGALORE] - it is settled that once the amount prescribed under Rule 6(3A) was paid by the appellant, no further demand is sustainable. Hence, the demand on this count is also not sustainable.
As regard the issue raised on limitation, since the entire case has been decided on its merit, the aspect of limitation not taken up and the same is left open.
The demand is not sustainable, hence, the impugned order is set aside - Appeal allowed.
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2023 (12) TMI 952
Issuance of second SCN invoking extended period of limitation - Recovery of service tax alongwith interest and penalty - Manpower Recruitment or Supply Agency Service - HELD THAT:- The present SCN dt. 22.4.2013 has been issued for the very same period. The work sheet enclosed along with SCN in page 51 of the paper book shows that the figures for the present demand under MRSA service have also been obtained from ST-3 returns of the very same period filed by the appellant. It is brought out from these returns, that in the returns the appellant had declared exempted services for certain amounts. The present demand is raised under MRSA services and not WCS on the basis that these amounts shown as exempted are taxable under MRSA services as it involves supply of labour. The work orders issued by M/s.Comtech, M/s.Espee Tech & M/s.D.R Associates show that the work orders are for executing welding, fabrication works at site - the department would have come across the figures declared as ‘exempted services’, while perusing the ST-3 returns for issuing earlier SCN by invoking extended period. Therefore all information when available before the department a second show cause notice alleging suppression of facts cannot sustain. The department when equipped with all facts as declared in the ST-3 returns ought to have initiated proceedings on all grounds in the first SCN itself.
In regard to work order issued by M/s.Comtech to the appellant for whom welding, fabrication for ship building works were carried out a letter dt. 03.07.2008 is issued by M/s.L&T Ltd. (customer) stating that the activity does not involve rendering of services and would fall under ‘manufacture’ as under Section 2(f) of Central Excise Act, 1994. So also, on perusal of the work orders, the activity rendered by the appellant for the other two customers appears to be identical - The appellant is a sub-contractor of M/s.Comtech, M/s.DR Associates and M/s.Espee Tech. The issue as to whether sub-contractor is liable to discharge service tax was under litigation. During the relevant period, The Board vide its Circular No.23/3/97-ST dt. 13.10.1997, TRU letter F.No.341/18/2004-(pt) dt. 17.12.2004 had clarified that sub contractor is not required to pay service tax.
The second show cause notice issued invoking extended period on the basis of very same ST-3 returns filed by appellant cannot sustain and requires to be set aside - the SCN is time barred. The impugned order is set aside - Appeal allowed.
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