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Service Tax - Case Laws
Showing 41 to 60 of 1616 Records
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2023 (12) TMI 951
Refund of service tax paid - appellant was not able to furnish lorry receipts giving the details of Invoice/Shipping bill issued by the transporters - non-compliance with the condition in Notification No.17/2009-ST dt. 7.7.2009 - HELD THAT:- The department has given the details of the transportation charges in the SCN itself. The appellant has also furnished a Chartered Accountant certificate certifying the correlation with the transportation charges as well as the shipping bills. There is no dispute that these charges were paid by the appellant for export of goods. The non-production of lorry receipts is only a procedural infraction for which the substantive right of refund claim cannot be rejected.
In the appellant's own case, the Commissioner (Appeals) for a different period has allowed the refund claim observing that the non-production of lorry receipt is a procedural infraction and that when the appellant as furnished Charted Accountant certificate, the same has to be accepted. The department cannot take a different view in similar situation of the same appellant for a different period.
The rejection of refund claim on procedural grounds cannot be justified - the appellant is eligible for refund - the impugned order is set aside - appeal allowed.
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2023 (12) TMI 912
Jurisdiction which the petitioners allege against the respondents - Suppression of facts or not - invocation of extended period of limitation - HELD THAT:- It is a matter of how the agreement is to be construed as such and whether the State was contributing in any manner in the running of the hospital. This is a matter of fact which has to be analyzed by the statutory authorities in appeal and to be summarized. The right of the petitioner thereafter to challenge the order in case the same is decided against it would always be available. The issue of extended period of limitation whether it has been rightly invoked or not, is a matter which the Appellate Authority can go into and since the impugned order records the fact that the consideration was being received at 5% of the gross revenue and as per the provisions of the concessionaire agreement.
Apparently from the show cause notice, it would be clear that it was only when the revenue had started investigation against Max Super Speciality Hospital, Mohali regarding non-payment of service tax, it had come to their notice about the arrangement which has been made with the petitioner and thereafter the proceedings had been initiated and, therefore, the issue of jurisdiction is also based on a factual matrix.
It would also be a matter of fact which would be within the jurisdiction of the Appellate Authority as to whether the notices as such issued were within the prescribed period and whether the action of the Revenue in extending the period of limitation is justified or not in the facts and circumstances.
The writ petition is disposed of and the petitioners are relegated to the remedy of appeal. Needless to say that since the petitioners had approached this Court on 29.08.2023, if the appeal is filed within a period of 4 weeks from today.
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2023 (12) TMI 911
Non-payment of service tax - business auxiliary service - incentives received from the Central Reservation System Companies (CRS) Companies and Airlines on the sale of tickets - service charges received by the appellant from clients for visa consultation - incentives received from medi-claim insurance companies - incentives received from Foreign Exchange brokers - incentives received from Miscellaneous Receipts - Denial of CENVAT credit on the ground that invoices bear address as 1400, Modi Tower, 98, Nehru Place, New Delhi.
Non-payment of service tax under BAS on the incentives received from the CRS Companies and Airlines on sale of tickets - HELD THAT:- This issue has been decided in favour of the appellant by a Larger Bench of the Tribunal in KAFILA HOSPITALITY & TRAVELS PVT. LTD. VERSUS COMMISSIONER, SERVICE TAX, DELHI [2021 (3) TMI 773 - CESTAT NEW DELHI (LB)]. The Larger Bench held that by rendering services connected to travel by air, a travel agent would render ‘air travel agent’ services, which services cannot be said to be for ‘promotion or marketing’ for the airlines - in view of the aforesaid decision of the Larger Bench of the Tribunal in Kafila Hospitality, service tax could not have been demanded from the appellant under BAS on the incentives that were received from CRS Companies and Air Lines on sale of tickets.
Non-payment of service tax under BAS on the service charges received by the appellant from clients for visa consultation - HELD THAT:- The services rendered by the appellant are not covered under the definition of BAS as the appellant is not involved in promotion and marketing or sale of any goods or service nor is the appellant providing any customer care service on behalf of the client or procuring goods or services which are inputs for the client. While providing such services, the appellant does not act as an agent of the embassies or of the individuals who require the assistance in obtaining VISA and, therefore, such services are not provided on behalf of anyone. The activities of the appellant would not be covered under BAS - service tax could not have been demanded from the appellant under BAS on the service charges received by the appellant from clients for visa consultation.
Non-payment of service tax under BAS on the incentives received from Mediclaim Insurance Companies - HELD THAT:- The Insurance Companies provide the mediclaim insurance policies to the individuals. The Insurance Companies make payment of incentives on their own as per their policy on which the appellant has no control. The appellant merely receives incentives from the insurance companies and does not raise any invoice on the Insurance Company. The liability to pay service tax on commission paid to agents is on Insurance Company. The appellant is not involved in promotion or marketing or sale of any goods or service and the appellant is also not providing any customer care service on behalf of the client or procuring goods or services for the clients. The activities of the appellant would, therefore, not be covered under BAS.
Non-payment of service tax under BAS on the incentives received from Foreign Exchange brokers - HELD THAT:- The appellant is not an authorized money changer as per the Reserve Bank of India requirement. Thus, for the Foreign Exchange required by the passenger, the payment is made directly by the passenger in the name of authorized money changer. The authorized money changer makes payment of incentive on its own to the appellant as per their policy and market rates of Foreign Exchange from time to time. The appellant does not raise any invoice on the authorized money changer. The appellant is not involved in promotion or marketing or sale of any goods or services nor is the appellant providing any customer care service on behalf of the client or procuring goods or services for the client. The client or the service recipient are the Foreign Exchange brokers who pay for the service - The reasons given by the Commissioner (Appeals) for confirming the demand on the incentives received by the appellant from Foreign Exchange brokers is the same as that for confirmation of the demand on service charges received by the appellant from clients for Visa Consultation. The confirmation of this demand, therefore, would also have to be set aside.
Non-payment of service tax under the category BAS on the incentives received from Miscellaneous Receipts - HELD THAT:- According to the learned counsel for the appellant, the appellant is not involved in promotion or marketing or sale of any goods or service - There is force in the submission advanced by the learned counsel for the appellant. When the aforesaid services have already been taxed under ‘air travel agency’ service, the incentives received from Miscellaneous Receipts arising out of the same transaction cannot be taxed under BAS. The confirmation of demand, therefore, deserves to be set and is set aside.
Denial of CENVAT credit - Credit denied on the ground that invoices bare address as 1400, Modi Tower, 98 Nehru Place which is the address of the registered premises and not 110, Modi Tower, 98 Nehru Place which is the address of the travel agency division of the appellant specified in ST-2 form - HELD THAT:- There is no dispute on receipt of service and payment made. According to the appellant, the issue of PAN based registration has been decided in favour of the appellant meaning thereby that registration of the service provider is not in dispute. Thus, once registration of service provider and rendition of service and payment thereof is not in dispute, mere mention of the wrong address is a procedural defect and CENVAT credit cannot be denied for this reason - The appellant was, therefore, clearly entitled to CENVAT credit and it could not have been denied merely on the ground of procedural lapses.
The impugned order dated 28.11.2016 passed by the Commissioner (Appeals) cannot be sustained and is set aside - Appeal allowed.
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2023 (12) TMI 910
Maintainability of appeal - non-prosecution of the case - matter adjourned beyond three times - HELD THAT:- In case of ISHWARLAL MALI RATHOD AND SMT. LEELABAI & ONE ANOTHER VERSUS GOPAL & OTHERS (VICE-VERSA) [2021 (2) TMI 1360 - MADHYA PRADESH HIGH COURT] condemning the practice of adjournments sought mechanically and allowed by the Courts/Tribunal’s Hon’ble Supreme Court has observed considering the fact that in the present case ten times adjournments were given between 2015 to 2019 and twice the orders were passed granting time for cross examination as a last chance and that too at one point of time even a cost was also imposed and even thereafter also when lastly the High Court passed an order with extending the time it was specifically mentioned that no further time shall be extended and/or granted still the petitioner – defendant never availed of the liberty and the grace shown. In fact it can be said that the petitioner – defendant misused the liberty and the grace shown by the court. It is reported that as such now even the main suit has been disposed of. In view of the circumstances, the present SLPs deserve to be dismissed and are accordingly dismissed.
There are no justification for adjourning the matter beyond three times which is the maximum number statutorily provided - Appeal is dismissed for non prosecution in terms of Rule 20 of CESTAT Procedure Rules, 1982.
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2023 (12) TMI 909
Levy of Service Tax - Restaurant Service - rendering Mandap Keeper Service, Cab Operator Service and Business Auxiliary Service - Department was of the view that the respondent was liable for registration and payment of Service Tax on ‘Restaurant Services’ provided in respect of food and beverages, including alcoholic beverages or both, in their premises - exemption under Notification No. 25/2012-ST dated 20.06.2012.
HELD THAT:- As the restaurants though located in the premises of Hotel Sangam in Trichy and Thanjavur, they are clearly demarcated from the permit room and these restaurants are separately named and the service activities in the restaurants are not linked to the service activities in the permit room or bar. As the restaurants located in the premises of Hotel Sangam in Trichy and Thanjavur, do not fulfil the requirement of having a licence to serve alcoholic beverages, the services provided in the restaurant does not come under the ambit of ‘Restaurant Services’. The basic premise of the Show Cause Notice for demanding Service Tax from the appellant is that the services from the restaurant are located within the premises of the hotel and the hotel has a licence to serve liquor, hence, the restaurant fulfills the requirements under the category of ‘Restaurant Services’ is not legally correct and this inconsistent interpretation has to be discarded. The term establishment as figuring in the definition under Section 65(105)(zzzzv) has been referred to as the ‘Hotel’ in whose premises the restaurant is located and not for the ‘Restaurant’.
As such, the restaurants located in the appellant’s premises both at Trichy and Thanjavur have not satisfied one of the conditions of serving alcoholic beverages and so the Service Tax liability cannot be fastened in respect of restaurant service on the appellant.
As held by the Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS M/S RATAN MELTING & WIRE INDUSTRIES [2008 (10) TMI 5 - SUPREME COURT], the Department Circulars and instructions are binding on the Revenue authorities under the respective statutes and as such, in view of the express clarification issued vide Circular No. 139/8/2011-TRU dated 10.05.2011, the impugned order could not have been challenged by filing an appeal by the Department as in doing so, it goes against the Circular issued by the Board.
The contentions advanced on behalf of the Department are without substance as the Circulars / Notifications ibid do not run contrary to the provisions of the Act - there is no reason to differ with the Order-in-Original No. 06/2014- ST dated 20.02.2014 passed by Commissioner of Central Excise and Service Tax, Trichy - As the demand cannot sustain, there is no need to discuss about the invocation of extended period in this appeal.
The impugned order does not call for any interference - the Department’s appeal stands dismissed.
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2023 (12) TMI 908
Classification of service - cleaning activity or not - services relating to fumigation of export containers - HELD THAT:- A bare perusal of the definition of ‘cleaning activity’ under section 65(24b) of the Finance act would indicate that it means cleaning, including specialized cleaning services such as disinfecting, exterminating or sterilizing of objects or premises of commercial or industrial buildings and premises thereof; or factory, plant or machinery or buildings, but would not include such services in relation to agriculture, horticulture, animal husbandry or dairying - In the instant case, the activity of fumigation of containers was not of commercial or industrial building or premises thereof. It would, therefore, not be covered by the definition of cleaning activity under section 65(24b) of the Finance Act.
Circular dated 12.01.2011 was amended by Circular dated 20.01.2011 by deleting the word ‘Circular’ at paragraph 2(b) and replacing it by ‘Notification’ - A perusal of the aforesaid Circular shows that fumigation of export cargo would not satisfy the statutory definition of cleaning activity under section 65(24b) of the Finance Act and it is only as a matter of abundant caution that the government had issued the Notification dated 06.10.2007 which was subsequently amended on 29.11.2007 and that the wordings of the Notification cannot be used to interpret the scope of the service taxable under section 65(105) (zzzd) of the Finance Act.
The Commissioner (Appeals) completely fell in error in holding that because the Notification dated 06.10.2007 exempts the cleaning activity services, it should be held that they were taxable and for claiming exemption the conditions have to be satisfied. The Commissioner (Appeals) also fell in error in misreading the Circular dated 12.01.2001 - Once it is clear that fumigation of export containers would not fall within the definition of ‘cleaning activity’ defined under section 65 (24b) of the Finance Act, service tax could have been levied.
The impugned order dated 04.05.2018 passed by the Commissioner (Appeals) is set aside - Appeal allowed.
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2023 (12) TMI 907
Maintainability of appeal - appeal dismissed on the ground of non-fulfilment of mandatory pre-deposit condition - violation of principles of natural justice - HELD THAT:- It is seen that the Appellant has canvassed once again all the details before the Commissioner(Appeals). Even he did not take any trouble to get these facts verified from the office of the adjudicating authority and has mechanically passed this impugned order dismissing the Appeal filed by the Appellant.
After observing that gross violation of principles of natural justice has taken place, in the interest of justice, the details is gone through and it is found that the amount of Rs.3,26,322 + Rs.29,449/- already stands paid by the appellant before issue of the Show Cause Notice and is more than the pre-deposit equivalent of 10% of the litigated amount.
The defect stands cured - the Appeal itself taken for disposal as the issue is in a short compass - matter remanded to the adjudicating authority to go through all the details given in the letters submitted by the Appellant and also grant Personal Hearing and follow principles of natural justice.
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2023 (12) TMI 906
Levy of Service tax - security agency services - collection of security charges for providing police guards to various banks for their security - HELD THAT:- It has been held in the case of SUPERINTENDENT OF POLICE VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2019 (11) TMI 250 - CESTAT NEW DELHI] that merely because the Police may charge a fee it would not become “a person engaged in the business of providing security” and, therefore, no service tax can be levied.
The impugned order dated 28.07.2014 is set aside and appeal is allowed.
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2023 (12) TMI 905
Levy of service tax - Manpower Recruitment Service - services of ‘Loading of Scrap into Trucks’ for onward transportation rendered by the Appellant to their client - HELD THAT:- The Appellant has collected the charges @ Rs. 429/- per trip. The loading was done by engaging “Crane’ and helpers/operator. The Appellant was never obliged to supply labour or manpower. They were only required to perform a “specific job of loading”. Further, they were paid against the loading of truck which is at the rate of 'per trip' and not on the basis of 'number of manpower' deployed. Thus, the service rendered by the Appellant cannot be categorized as 'Manpower Recruitment Service'.
The services of ‘Loading of Scrap into Trucks’ for onward transportation rendered by the Appellant to their client are not liable to service tax under the category of 'Manpower Recruitment Service' - the demand confirmed in the impugned order is not sustainable. Since, the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
Appeal allowed.
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2023 (12) TMI 904
Levy of service tax - earnest money deposit/security deposit - liquidated damages collected by the appellant - service in the nature of “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” as defined under section 66E (e) of Finance Act or not - HELD THAT:- In M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI], the Tribunal held that since liquidated damages recovered on account of breach or non-performance of contract are not consideration for any service, but are in the nature of deterrent imposed so that such a breach or non-performance is not repeated service tax would not be leviable on the amount so collected.
The Circular dated 28.02.2023 issued by the Central Board of Indirect Tax and Customs also provides that service tax cannot be levied on the amount collected for the said purpose.
In view of the aforesaid decision of the Tribunal in South Eastern Coalfields and the Circular dated 28.02.2023 issued by the Central Board of Indirect Tax and Customs, the contention advanced by the learned counsel for the appellant has to be accepted.
It is, therefore, not possible to sustain the demand. The order dated 25.06.2019 passed by the Commissioner (Appeals) is, accordingly, set aside - Appeal allowed.
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2023 (12) TMI 903
Levy of service tax - declared service or not - Debit notes raised to offset the excess credit in the ledger account - Notice pay recovery - Cheque return penalty - Liquidated damages - HELD THAT:- A service conceived in an agreement where one person, for a consideration, agrees to an obligation to refrain from an act, would be a 'declared service' under section 66E(e) read with section 65B(44) and would be taxable under section 68 at the rate specified in section 66B. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in Section 66E(e).
Debit notes - HELD THAT:- The debit notes are mere book adjustments to balance the ledger. The appellant has merely followed the price reduction method with the suppliers. In terms of the agreement price is agreed upon on the commitment by the supplier to supply the goods. However, upon delivery, the price of the delivered goods is reduced if it falls short in quantity or quality. Such price reduction is effected through debit notes issued by the appellant to the suppliers. It is apparent that no consideration is paid. The Tribunal in M/S FUTURA POLYESTER LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE. CHENNAI-I [2013 (1) TMI 658 - CESTAT CHENNAI] also held that no tax can be levied merely because of the entries made in the books of account. In the present case, there is no separate agreement and the provisions of section 66E(e) have been applied in terms of the purchase order, as is clear from paragraph 3 of the show cause notice.
Notice pay recovery - HELD THAT:- The Madras High Court in GE T & D INDIA LIMITED (FORMERLY ALSTOM T & D INDIA LIMITED) VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE [2020 (1) TMI 1096 - MADRAS HIGH COURT] in no uncertain terms, also held that notice pay recovery is not subject to service tax.
Cheque bounce penalty - HELD THAT:- Circular No. 178/10/2022-GST dated-3-8-2022 has clarified that cheque bounce penalty is not subject to Goods and Service Tax and the reasoning would also be applicable to service tax - The Tribunal in M/S. ROHAN MOTORS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, DEHRADUN [2020 (12) TMI 1014 - CESTAT NEW DELHI] also held that cheque dishonour amount is deterrent in nature and not towards consideration for any service.
Liquidated damages - HELD THAT:- Though the department had filed Civil Appeal No. 2372 of 2021 before the Supreme Court in COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS SOUTH EASTERN COALFIELDS LTD [2023 (8) TMI 606 - SC ORDER] to assail the decision of the Tribunal rendered in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] but in view of the Circular dated 28.02.2023 issued by the CBIC, the Civil Appeal was dismissed as withdrawn on 11.07.2023.
Thus, as none of the four demands can be sustained, the order dated 08.03.2018 passed by the Commissioner is set aside - appeal allowed.
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2023 (12) TMI 854
Penalty for delayed payment of tax - Seeking review of the order - Review Petitioner contended that, it is incorrect to state that evasion of service tax has come to the notice of the Department only after detailed investigation of the assessee account - HELD THAT:- As per second proviso of Section 73, if the tax is paid within a period of 30 days, the penalty payable would be within a period of 30 days of the date of service of the notice under proviso to sub Section (1) of Section 73, the penalty payable shall be 15% of such service tax and proceedings in respect of such service tax, interest and penalty shall be deemed to be concluded - In the case on hand, notice under Section 73(1) of the Act came to be issued by the authorities, the first show cause notice issued by the authorities is on 08.08.2007. Again, the second show cause notice was issued on 18.09.2008.
The material on record would also disclose that the service tax has been paid subsequently with accrued interest even before the show cause notice has reached the review petitioner - Surprisingly, the Additional Commissioner has observed in his order that the service tax has not been paid. The show cause notice itself shows that there was a payment of service tax along with interest by the review petitioner. Therefore, the order of the Additional Commissioner is factually incorrect.
This Court is of the considered opinion that a case is made out by the Review Petitioner RP No.384/2022 to pay a sum of Rs.2,50,000/- towards penalty proceedings initiated by the Department and put an end to the litigation.
Revision petition disposed off.
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2023 (12) TMI 853
Levy of Service Tax - grants / funds / consideration received by the appellant in respect of projects under sponsored research under Scientific and Technical Consultancy Services - provision of service in respect of sponsored research classifiable under Scientific and Technical Consultancy Service or not - activity / events undertaken by the Appellant at its Convention center - eligibility to avail input service credit on Travel, Postage and freight relating to Scientific and Technical Consultancy services rendered - invocation of extended period in terms of Section 73(1) of the Finance act, 1994.
Whether any service is rendered in respect of sponsored research projects and whether such a service can be classifiable under Scientific and Consultancy Services in terms of Section 65(92) of the Finance Act, 1994? - HELD THAT:- It is found that CBEC Circular B/11/1/2001––TRU dated 09.07.2001, relevant extracts of which have been reproduced below, clarified that Service Tax was liable to be paid when any scientific or technical consultancy service is rendered whether by Public Funded institutions or by private agencies. Further it was clarified that Service Tax is not payable when Public funded research institutions received grants in aid from the Government for conducting research/ project work and service tax is payable only if service is rendered on payment basis.
In the instant case, the Appellant is entering into a MOU with their Clients as per which consideration is being paid towards Research & Development and conduct of workshops by IIT, Madras. The Appellant has received consideration in the form of grants for research activities from JK Tyres, Cadbury India Ltd., Tata Steel, etc. during the aforesaid period.
Besides, the Appellant is also receiving amounts in Foreign Currency from overseas clients like World bank, Chevron Products Corporation, Hewlett Packard Company, Proctor and Gamble, etc. From the above it is clear that the Appellant is conducting research work for various clients and workshops are being conducted for dissemination of research findings to academic community and others involved. The Appellants are receiving consideration from various Sponsors towards grants for the above work. As per the terms and conditions of MOU entered into with Sponsors, the research leading to patentable invention is being used by the Sponsor after entering into a separate contract in its manufacturing facility and if not, the Appellant has the right to license it to third party to generate revenue and if the Sponsor licenses it to third party, then the revenue generated is shared between the Sponsor and Appellant. If any commercially viable results emerge on account of such a research, a separate agreement is entered into and any consideration received is charged to Service Tax.
In respect of Government of India Sponsored projects the grants are received by an order from the Ministry of Science and Technology (MST), Government of India for which separate audited accounts are maintained for each project. As per the Order, we find that even if interest is earned by way of keeping the grant in bank accounts, the Ministry should be accordingly informed. Further the Appellants are required to furnish to the MST utilisation certificate and audited statement of accounts pertaining to the grant immediately after the end of each financial year - the Service Tax is not payable when Public funded research institutions like IIT receive grants or aid from the Government for conducting research / project work - thus, in respect of sponsored research, there is no provision of service. The services provided are in the nature of furtherance of education and promotion of sharing of knowledge. Many times, the projects include organising workshops, international conferences and conducting seminars. As such, the impugned Order-in-Original No. 11/2013 (RST) dated 31.05.2013 demanding Service Tax in respect of sponsored research projects cannot be sustained.
Demand of Service Tax on Convention services - HELD THAT:- The CBEC Circular No. 86/04/2006-ST does not pertain to clarification on Convention services and hence not applicable to the facts of the case - it is found that the Centre for Industrial Consultancy and Sponsored research (IC & SR) building of the Appellant had facilities for conferences, meetings and video conferencing and facilities were available to respective departments of the Appellant, the cultural affairs secretary and private industries, industrial associations and other professional bodies, for organising seminars/ technical sessions and conferences and a tariff was fixed for them and collected by the Appellant - the contention of the appellant agreed upon that some of these conferences / meetings may be open to the public and students and some of the events may be related to cultural activities. But, taking an overall view that there is no convention service is not supported by evidence and facts. So, the demand in respect of convention services is required to be upheld.
Availment of CENVAT Credit on ‘Travelling and Postal Expenses, etc. - HELD THAT:- The lower adjudicating authority has disallowed the CENVAT Credit concluding that these services are not input services under Rule 2(l) of CENVAT Credit Rules, 2004. However, it is found that the appellant is rendering ‘consultancy services’ and also discharging Service Tax. As such, there are no reason for disallowing the CENVAT Credit on these services.
Invocation of Extended period of limitation - HELD THAT:- In the instant case, the Appellant is an Autonomous Organisation under the Ministry of Science and Technology and cannot be attributed with any malafide intention for non-payment of service tax in as much as they are already registered with Service Tax for various services and regularly paying Service Tax and filing periodical returns and being so, their records were always available for audit and scrutiny. The Appellant were under the reasonable belief that the Services rendered by them were not liable for Service Tax. Further taxability of sponsored research is interpretational in nature - the extended period of limitation is not invokable in this case and the penalty imposed under Section 78 of Finance Act, 1994 in the impugned order is set aside.
Thus, the demand raised in respect of Scientific and Consultancy Services is set aside being not sustainable. The demand in respect of convention service is upheld for the normal period - the appellant is eligible for the CENVAT Credit availed on Travelling and Postal Services, etc., being a service provider of Consultancy Services. Penalties imposed are also ordered to be set aside.
The Appeal is partly allowed.
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2023 (12) TMI 852
Non-payment of service tax - providing security guards to various organizations - intent to evade service tax or not - invocation of extended period of limitation - penalty - HELD THAT:- Appellant have been registered with Service Tax department w.e.f.14.09.2000 and regularly paying service tax and filing returns. The Appellant submits that they have been providing security agency service mainly to Government agencies and some of the agencies to whom they provided security agency service declined to pay service tax - It is observed that the explanation offered by the Appellant for non payment of service tax is not acceptable. It is the responsibility of the Appellant to collect service tax from their clients on the invoices raised towards rendering of security services. There is no specific exemption available to security services rendered by the Appellant to Government Agencies. Thus, the appellant is liable to pay service tax on the taxable services rendered by them during the period under dispute.
The Appellant have been registered with Service Tax department w.e.f.14.09.2000 and regularly paying service tax and filing returns. The department raised the demand based on the service tax paid by the Appellant which have been reflected in the service tax returns. Thus, the returns filed by the Appellant indicate the taxable value of the services rendered by them and the actual service tax paid by them. After the search by the department, they have again raised separate invoices demanding service tax from the organizations who have not paid service tax, but they declined to pay service tax This clearly indicate that the Appellant has not suppressed any information from the department with an intent to evade payment of service tax.
Appellant has not suppressed any information from the department and hence extended period cannot be invoked in this case to demand service tax - the demands confirmed in the impugned order by invoking the extended period is not sustainable on the ground of limitation. The Appellant is liable to pay service tax, if any, along with interest, for the normal period of limitation. As suppression with intent to evade payment of tax has not been established, no penalty imposable on the Appellant.
The demands confirmed in the impugned order by invoking the extended period is not sustainable. The Appellant is liable to pay service tax, if any, along with interest, for the normal period of limitation. No penalty imposable on the Appellant - Appeal disposed off.
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2023 (12) TMI 851
Levy of penalty u/s 76, 77 and 78 of FA - penalty not quantified - it is submitted that the impugned order has gone beyond the scope of OIO and appeal/cross objections filed - extended period of limitation - HELD THAT:- It is found that as soon as audit objection was raised demanding service tax of Rs. 7,31,324/- the appellant deposited Rs. 5,49,050/- alongwith interest on 02.07.2009 pertaining to the period after 18.04.2006 and contested the demand of Rs. 1,82,274/-. Further, we find that the period involved in the present case is 2005-2006 and 2006-2007 and the Hon’ble Supreme Court in the case of Indian National Shipowners Association [2009 (12) TMI 850 - SC ORDER] held that the assessee is not liable to pay service tax prior to 18.04.2006 and settled the issue finally which also shows that the issue relates to interpretation of law and extended period of limitation is not invokable and therefore, the penalty cannot be imposed.
It is found that the impugned order has travelled beyond the OIO because in the OIO, the original authority held that the appellant is not liable to penalty under Section 76 and against the said finding, no appeal was filed by the department and no cross objections were filed before the lower authorities which also shows that the impugned order imposing penalty under Section 76 is bad in law and the same has travelled beyond the OIO - further it is also found that the appellant had a bonafide belief that he is not liable to pay tax and as soon as it was pointed out; he paid the tax as per his liability and contested that the demand is barred by limitation, which was accepted by the appellate authority.
Further, in this case, there was no intention to evade the payment of service tax because the appellant would have been claimed cenvat credit of the tax paid by him which makes the entire transaction as revenue neutral.
The imposing of penalty under Section 76 , 77 and 78 are not sustainable in law - Appeal allowed.
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2023 (12) TMI 850
Levy of service tax - work contract service for construction of residential apartments and service apartments - Construction of Complex Service and Commercial and Industrial Complex Service or not - period June, 2005 to March, 2006 - HELD THAT:- As per the clauses of the agreement and subsequent RA bills show that the activity carried out by the appellant is a composite contract. As per the law laid down by the Hon’ble Apex Court in the case of Commissioner of Central Excise & Customs Kerala Vs. Larsen & Toubro Ltd [2015 (8) TMI 749 - SUPREME COURT], the activities carried out by the appellant, which fall under the category of works contract are subject to levy of service tax only after 01.06.2007. Further, the Learned AR submits that at the relevant time the service rendered by the appellant was subject to service tax and considering the law laid down by Apex Court in the matter of M/s Larsen & Toubro Ltd Vs. Commissioner of Service Tax, Kolkata [2019 (12) TMI 69 - CALCUTTA HIGH COURT] service tax is not applicable in appellant case.
Appeal allowed.
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2023 (12) TMI 849
Entitlement to the benefit of cum tax value - non-production of evidence to the effect that the considerations received were inclusive of service tax - HELD THAT:- It is apparent from the Special Conditions of the tender documents that the service tax was to be included in the rates quoted by the respondent in the tender document. It is for this reason that the Commissioner (Appeals) in the order dated March 15, 2011 had recorded that the appellant had received the gross amount inclusive of service tax and VAT during the period 2006-07 to 2008-09 and so the benefit of cum-tax was required to be given.
It is, therefore, not possible to accept the contention of the Department that as the respondent is not entitled to the benefit of cum-tax value, the appeal filed by the Department assailing the finding should be allowed - In view of the fact that the respondent is entitled to the benefit of cum-tax value, the appeal filed by the Department will have to be dismissed as earlier the other two grounds raised in the appeal had not found favour of the Tribunal.
Appeal dismissed.
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2023 (12) TMI 848
Classification of activities of wireline logging and perforation during the relevant period from 14.05.2003 to 31.03.2008 - technical testing and analysis services or not - whether the term 'technical testing and analysis agency' has been defined under section 65(107) of the Finance Act?
HELD THAT:- The activities undertaken by the appellant do not involve testing or analysis. It is the data procured by the appellant that is communicated to ONGC which, thereafter, independently analyses the same for determining the course of action. The function required to be performed by the appellant is strictly limited to the scope of measuring different parameters related to the oil rigs, and additionally, perforation, which has no relation to testing and analysis services - It can safely be concluded that the appellant was responsible for mobilizing equipment necessary for conducting the measurement/logging activities at the site and undertake perforation of the oil rigs casings. These activities do not involve any testing or analysis and accordingly, cannot be classified under 'technical testing and analysis service'.
Whether the activity carried out by the appellant would fall under TTA services prior to 01.06.2007? - HELD THAT:- It will be pertinent to refer to the decision of the Bombay High Court in INDIAN NATIONAL SHIPOWNERS' ASSOCIATION VERSUS UNION OF INDIA [2009 (3) TMI 29 - BOMBAY HIGH COURT]. It was held that introduction of a new entry and inclusion of certain services in that entry would presuppose that there was no earlier entry covering the said services. It was also observed that creation of the new entry was not by way of amending the earlier entry and it was not carved out of any earlier entry - In the instant case, the definition of TTA did not undergo any change when a new service 'in relation to mining' was introduced w.e.f. 01.06.2007. The department admits that w.e.f. 01.06.2007, the activity carried out by the appellant is covered under the category of service in relation to mining. This activity could not, therefore, have been categorized under TTA service prior to 01.06.2007 - As it has been found that the activity undertaken by the appellant w.e.f. 01.06.2007 pertains to mining services as made taxable under section 65(105)(zzzy) of the Finance Act, service tax under TTA services cannot be charged from the appellant prior to 01.06.2007.
It also transpires from the records that the appellant had filed refund applications in 2005 since the appellant was not required to deposit service tax under the TTA services. The returns filed by the appellant from 2004 onwards show that the appellant has consistently informed the department that the services performed by the appellant would not fall under the TTA services.
Whether the Commissioner was justified in holding that the extended period of limitation contemplated under section 73(1) of the Finance Act was correctly invoked in the facts and circumstances of the case? - HELD THAT:- In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [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.
The records indicate that the appellant had repeatedly informed the department from 23.12.2004 that prior to 01.06.2007 it had not been discharging service tax on wireline logging, perforation and data processing services under the category of TTA services and by a letter dated 25.10.2007 the appellant had also informed the department that it had started paying service tax on mining services when it was introduced for the first time w.e.f. 01.06.2007. Yet, the show cause notice was issued to the appellant only on 23.10.2008. Thus, the extended period of limitation could not have been invoked in the facts and circumstances of the case.
The impugned order passed by the Commissioner cannot be sustained and is set aside - Appeal allowed.
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2023 (12) TMI 784
Liability of service tax - works contract service - eligible for benefit of Notification No. 30/2012-ST dated June 20, 2012 or not - filing of incorrect service tax returns - Whether the payment of 50% tax by the appellant and remaining 50% by recipient of its service resulted into short payment of duty, as alleged? - Extended period of limitation - HELD THAT:- The admitted fact is that 100% tax liability towards the amount of consideration received by the appellant (the service provider) for providing services of ‘Packaging activity’ to M/s HEG (service recipient) stands discharged by the provider as well as the recipient to the extent of 50% each. There is also no denial to the fact that appellant itself is the manufacturer of the wooden crates i.e. the packing material used while providing the said service to M/s HEG is also manufactured by appellant the service provider and that the service is provided in M/s HEG premises itself.
It is observed that 100% tax has already been paid w.r.t. the impugned taxable service of packaging in terms of the Notification No. 30/2012. Then notification applies to WCS and apparently the activity rendered by appellant is WCS. Hence payment of 50% of tax by appellant, the service provider is wrongly alleged as short payment when admittedly remaining 50% of the liability stands discharged by the recipient of the service (M/s HEG) - demand has wrongly been confirmed by the department.
Extended period of limitation - HELD THAT:- Present is not the case of tax evasion, the returns were regularly been filed by the appellants, we are of the opinion that the extended period should not have been invoked - the charging of service tax again from the appellant the service provider when the liability has been discharged by him under forward mechanism and by the service recipient under the reverse charge mechanism to the extent of 50% each in terms of relevant notification, will amount to the double taxation on the same service, question of alleging an intent to evade payment of service is absolutely in irrelevant. The department is held to have wrongly invoked the extended period of limitation.
Appeal allowed.
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2023 (12) TMI 783
Short payment of service tax - Commercial or Industrial Construction Services - mis-classification of services as Work Contract Services - benefit of the Work Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 - availment of CENVAT Credit - benefit of N/N. 1/2006-ST dated 01.03.2006 denied - HELD THAT:- Reliance placed upon the decision of Delhi Bench in case of MEHTA PLAST CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [2014 (5) TMI 1131 - CESTAT NEW DELHI] where it was held that I find that the payment of service tax @ 4.12% itself shows that they have opted composition scheme for all the contracts. Further the noticees have not paid any service tax in respect of any contract in any other services. The entire payment after calculation of service tax @ 4.12% has been made under composition scheme of Works Contract Services. In view of above, I allow the benefit of composition scheme as the noticees fulfil the condition as mentioned in the notification No. 32/2007-S.T., dated 22-5-2007.
Reliance also placed in HARSH CONSTRUCTIONS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NASHIK [2019 (3) TMI 1679 - CESTAT MUMBAI] where it was held that though the appellant had availed the cenvat credit of service tax paid on the input services, but the same was reversed and the reversal particulars were duly reflected in the period ST-3 returns. Hence, we are of the considered view that the adjudged demands confirmed on the appellant cannot be sustained.
Further impugned order also concludes that respondent has not received any consideration from his clients in respect of the two debit notes dated 31.03.2012 and 31.03.2013 against which this demand, but has included the value of these services in his ST-3 return as per the Point of Taxation Rules, 2011 and has paid service tax on these services provided. This finding recorded in the impugned order has not been challenged. Further for the debit note dated 31.03.2011, it is observed that this debit note is for the period prior to introduction of the POT, 2011 and the service tax was to be paid only on realization of the service consideration. Commissioner (Appeal) has in the impugned order consideration of the bank statements and the ledgers of the respondent have concluded that the respondent have not received the service consideration.
There are no merits in the appeal filed by the revenue - appeal dismissed.
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