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Service Tax - Case Laws
Showing 61 to 80 of 1579 Records
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2023 (12) TMI 750 - CESTAT HYDERABAD
Levy of service tax - construction of residential flats - period April 2010 to March 2011 - HELD THAT:- The service tax is not chargeable for period prior to 01.07.2010 for construction of residential property/flats as clarified by the Board vide Circular No.151/2/2010-ST. Further post 01.07.2010, it is held that service tax has been wrongly demanded under the category of ‘Construction of residential complex service’ and further hold that correct classification is ‘Works Contract service’ following the precedent ruling of this Bench.
The Impugned Order is set aside - Appeal allowed.
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2023 (12) TMI 749 - CESTAT HYDERABAD
Non-payment of service tax - sub contractor towards Survey and Exploration of Minerals service - wilful suppression or fraud or noncompliance on the part of this Appellant - HELD THAT:- It is an admitted fact that Appellant was registered with the Department and have been filing their returns regularly and maintained proper books of accounts. Further, judicial notice also taken that during the relevant period, it was the general understanding that service tax in case of work done by sub-contractor, is payable either by the sub-contractor or by the principal contractor and not by both. Further, the said issue was highly controversial as to liability of the sub-contractor to pay service tax, under the admitted facts that the main Contractor have discharged the tax liability.
The said issue was referred to Larger Bench of this Tribunal in COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB] wherein it was held that although service tax being a destination tax liability, is only chargeable once on a transaction; But, in view of the mechanism of Cenvat credit available under the Cenvat Credit Rules, service tax can also be demanded from the Sub- Contractor, even if Main Contractor has paid, but at the same time, the Main Contractor shall be entitled to take Cenvat Credit of the tax paid by the Sub- Contractor.
Appeal allowed on the ground of limitation and the impugned order set aside.
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2023 (12) TMI 748 - CESTAT NEW DELHI
Demand of service tax - nature of activity - notice pay recovered from the ex-employee - HELD THAT:- It is observed that the only issue in the impugned order is the taxability about the amount as has been received by the employer from its employees at the time of pre-mature termination of the contract of the employment. The issues stand already decided by this Tribunal, Principal Bench M/S RAJASTHAN RAJYA VIDHYUT PRASARAN NIGAM LTD. VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX, CUSTOMS AND CENTRAL EXCISE, JODHPUR I [2022 (1) TMI 909 - CESTAT NEW DELHI], this Tribunal held compensation for failure under a cannot is NOT consideration for service under the contract and also following the law laid down by Madras High Court in GE T&D that Notice pay, in lieu of termination, however, does not give rise to the rendition of service either by the employer or the employee, the impugned order upholding confirmation of a demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained.
The issue involved in the present appeal is found to be exactly same which stands already decided in the above manner - there are no reason to differ with those findings - impugned order set aside - appeal allowed.
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2023 (12) TMI 747 - CESTAT NEW DELHI
Invocation of Extended period of Limitation - whether the show cause notice served upon the appellant hits by the time bar limit? - Levy of penalty - HELD THAT:- The appellant has otherwise acknowledged the short payment of service tax during the disputed period and has not challenged the quantum of demand proposed and confirmed against the appellant. It is apparent from the record that after receiving the specific information that the appellant has short paid service tax, a letter dated 11.02.2014 was served upon the appellant requiring them to produce requisite documents and to submit the reply with the said specific information. It is very much apparent from the show cause notice itself that the said information/documents were never provided by the appellant to the department.
No reason has been brought on record by the appellant nor has been submitted by making submissions even today about the said delay on part of the appellant and about the reason as to why none of those documents were never been provided, the delay for the entire period since February 2014 till April 2018 is held to be appellant’s fault. Hence benefit cannot be extended in favour of the appellant for the said fault. Resultantly, it cannot be held that the impugned show cause notice has been issued by invoking the extended period of limitation. Had there been a response by the appellant to the letter dated 11.02.2014, there is nothing on record to even presume that department would have delayed issuing the impugned show cause notice.
Levy of penalty - HELD THAT:- As already held that the act of appellant amounts to an act of suppression of facts, there is no infirmity in the imposition of penalty under Section 78 of the Finance Act - Though learned counsel had made another submission that the penalty imposed is disproportionate, it has been imposed 100% whereas it is on record that an amount of Rs.8,14,159/- was deposited by the appellant even prior the issuance of show cause notice. On this ground learned counsel has prayed for confining the penalty for the balance amount of Rs. 2.57 lakhs approximately. Since the findings of Para 8 and 9 of the order under challenge have been confirmed and it has been held that there is an intentional suppression on part of the appellant. The only possibility of such suppression is an intent to evade the payment of tax as has been appreciated by Commissioner (Appeals) in Para 9 of the order under challenge. There are no reason to differ from the said findings also.
Appeal dismissed.
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2023 (12) TMI 684 - CESTAT NEW DELHI
Valuation - inclusion of reimbursement of expenses - Demand of service tax by invoking the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act with interest under section 75 of the Finance Act and penalties under sections 77(1) and 78 of the Finance Act.
Whether the Commissioner committed an error in confirming the demand of service tax when, according to the appellant, service tax had been paid on all the collections received during the relevant period? - HELD THAT:- The Commissioner failed to properly appreciate the nature of the refundable security deposits. The appellant was required to provide infrastructure to the customers, for which the appellant had taken premises on lease from third party suppliers. These suppliers had taken refundable security deposits from the appellant and the appellant recouped the refundable security deposits from the customers. This was a back to back arrangement. Under section 67(1) of the Finance Act the gross amount charged is for service provided or to be provided. The returnable security deposits are collected for business reasons by the service providers during the subsistence of the contract and they are refunded to the recipient when the contract is completed/terminated. This amount, therefore, cannot be for services and service tax would not be leviable - The submission advanced by the learned counsel for the appellant also deserves to be accepted.
The amount collected as imprest from the customers is towards various expenditure incurred during the provision of services such as hotel, food and telephone bills. This expenditure or costs incurred by the service provider in the course of providing the taxable service cannot be considered as the gross amount charged by the service provider "for such service" provided by him, and accordingly not taxable under section 67 - it is not possible to sustain the demand confirmed by the Commissioner. The penalty and interest, therefore, cannot also be sustained.
It would, therefore, not be necessary to examine the contention raised by the learned counsel for the appellant that the extended period of limitation could not have been invoked in the facts and circumstances of the case.
The order dated 03.10.2022 passed by the Commissioner, therefore, cannot be sustained and is set aside - Appeal allowed.
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2023 (12) TMI 683 - CESTAT AHMEDABAD
CENVAT Credit - input service - GTA service, for delivery on FOR basis - Reliance on CA Certificate - Board Circular No. 97/8/2007 dated 23.08.2007 - HELD THAT:- In the instant case, in principle this Court agrees that credit is admissible if terms are FOR basis and goods are delivered to the buyer at the place of buyer rather than place of manufacture relying on the following the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1488 - CESTAT AHMEDABAD] and M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1487 - CESTAT AHMEDABAD].
This court finds that reliance on the Chartered Accountant certificate by the appellant which, inter-alia, gives opinion on legal issues like property getting appropriated/transferred, risk and loss in terms of insurance policy or that freight charges were not integral part of the goods are not the matters on which Chartered Accountant has expertise to pronounce. These issues, inter-alia, involve interpretation of law on the terms of contract. Without Chartered Accountant pronouncing on record his legal expertise such certificate lacks credence, as it is not based on accounts alone. Same is therefore, not acceptable.
This court remands matter back to Commissioner (Appeals) with pronouncement that in case of FOR basis freight on road and till the time ownership and title gets passed to buyer, in principle is admissible - Appeal allowed by way of remand.
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2023 (12) TMI 682 - CESTAT MUMBAI
Recovery of CENVAT Credit alongwith interest and penalty - recovery sought on the ground of its erroneous availment - non-compliance of sub-Rule 3 of Rule 10 of CCR.
Contention of the Department was that sub-Rule, 3 was not followed which permits transfer of CENVAT Credit only after verification of stock of inputs or capital goods which was to be transferred.
HELD THAT:- From the discussion made by the Adjudicating Authority who gave account of each credit taken on input services in a table annexed to 11.3, it is very much clear that only on the credits accumulated from input services, transfer was effected and Rule 10(3) has not dealt with such a situation, since it deals with stock of inputs or the capital goods. However, going by sub-Rule-2 it is manifestly clear that entire CENVAT Credit lying unutilised in the account of the business unit is to be transferred to the new business unit and the same is fortified by the fact that sub-Rule-3 had not restricted availment of credits on input services which were only available with the transferor business unit - there are no irregularity in the order passed by the Adjudicating Authority and, therefore, the observation made by the Commissioner (Appeals) in para 15 of the order that Rule, 10(3) of the CENVAT Credit Rules, 2004 permits CENVAT Credit of inputs or capital goods alone to be transferred is not inconformity to the law.
Judicial decision on this issue is consistent from CESTAT up to the level of Hon'ble Apex Court that Rule, 10 does not require that Assessee can transfer the credit corresponding only to the quantum of inputs transferred to the new factory since it permits the Assessee to transfer the entire available credits alongwith inputs and capital goods in stock at the factory to the new location - reliance placed in COMMISSIONER VERSUS CESTAT [2009 (2) TMI 824 - SC ORDER].
In view of the consistent decisions of this Tribunal that has been affirmed by the Hon'ble Supreme Court and in carrying forward the judicial precedent set on the issue and having regard to the fact that no stipulation is available under Rule, 10 for transfer of credit accumulated from input services.
The order passed by the Commissioner of Customs, Central Excise & GST (Appeals), Nagpur is hereby set aside - Appeal allowed.
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2023 (12) TMI 681 - CESTAT AHMEDABAD
Extended period of limitation - Levy of service tax - brokerage in connection with service of steam agent service - period April 2012 March 2013 - HELD THAT:- The demand is sustainable on merit. However, this tribunal while considering the overall issue and facts of the case for the earlier period set aside the demand for the extended period in the appellant's own case in INTERMARK SHIPPING AGENCIES PVT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, RAJKOT [2023 (8) TMI 123 - CESTAT AHMEDABAD].
From the above decision it can be seen that the tribunal is of the view that extended period cannot be invoked. The present case is on much better footing for the reason that the show cause notice dated 08.10.2013 was issued subsequent to the earlier show cause notice, therefore, not only on the fact but also on the principle laid down by the Hon'ble Supreme Court in the case of Nizam Sugar [2006 (4) TMI 127 - SUPREME COURT] that suppression of fact cannot be invoked in respect of the subsequent show cause notice when on the same issue earlier show cause notice was issued.
The demand for the extended period in the present appeal is not sustainable. However, demand for the normal period is sustainable - the impugned order is modified to the above extent - Appeal allowed in part.
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2023 (12) TMI 680 - CESTAT HYDERABAD
Levy of service tax - activity of construction of ‘Mechanised fertiliser handling and bagging facility’ on the land leased out - invocation of extended period of limitation - HELD THAT:- Admittedly, the ‘Mechanized fertilizer handling and bagging facility’ have been constructed at berth No. 6 and its backup area of the Kakinada Deepwater Port. Admittedly, the construction of the said baggage handling facility have enhanced the capacity of the port, which shall further enhance the revenue from the operations in the port - it is further found that the agreement between KSPL and SCCPL provides to establish fertilizer and FRM handling system for unloading, bagging and rail/Road dispatch in the said port, for enhancing the port capacity with respect to fertilizer cargo. Further, both KSPL and SCCPL are obligated to market the said facility for attracting fertilizer cargo and also to jointly coordinate on matters pertaining to railway movement and allotment of the railway rakes in co-ordination with the Indian Railways - the revenue generated from the facility so created is also shareable by the port authority of the State government under the concessionaire agreement. Admittedly, the Appellants were awarded work by SCCPL for civil work concerning Mechanized fertilizer handling & bagging facility.
Extended period of Limitation - HELD THAT:- The extended period of limitation is not invokable by the Revenue as no sufficient evidence and grounds have been brought on record for invoking extended period. Admittedly, SCN dated 25.08.2018 has been issued after the end of 40 months, as calculated from April 2015. The normal limitation during the period was 30 months, as substituted for 18 months vide Finance Act, 2016. Accordingly, SCN is hit by limitation, as extended period is not available to the Revenue in the admitted facts and circumstances.
Since, on the grounds of limitation itself, the SCN is not sustainable, the case on merit as to whether or not the Appellants were eligible for the benefit of Notification No.25/2012-ST, is not examined in the facts of the case.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 679 - CESTAT KOLKATA
Non-payment of service tax - reverse charge mechanism - While quantifying the demand, the abatement available has not been considered - revenue neutrality - HELD THAT:- The Tribunal in the case of ARANI AGRO OIL INDUSTRIES LTD. VERSUS COMMR. OF C. EX., VISAKHAPATNAM [2011 (1) TMI 715 - CESTAT, BANGALORE] has gone into this issue and has held the benefit is denied for the reason that declaration of GTA as regards not availing the Cenvat credit was not available on each consignment note. We find that there is no such condition in the notification. Notification benefit should be allowed also for the period after issue of Circular based on the consolidated declaration obtained from GTA. The Circular of CBEC cannot prescribe a condition not present in the Notification. In the circumstances, we find that the impugned order is not in accordance with law.
Therefore, as per the ratio of this case law, the Appellant would be eligible for abatement of 75% of the total freight value. Accordingly, as contended by the Appellant, the total Service Tax payable would amount to Rs. 26,43,025/- after considering this abatement. There is no dispute that the Appellant has paid Rs. 20,39,182/- along with interest of Rs. 15,79,196/-.
When the issue is that of Revenue neutrality, in such cases, the question of suppression does not arise and it is held that on this count the balance demand amount of Rs. 6,03,843/- is liable to be set aside.
The appellant is eligible for 75% abatement while the demand is quantified - Service Tax of Rs. 20,26,194/- along with interest of Rs. 15,29,196/- is not being disputed by the appellant and hence the same is being taken as their part discharge of the net Service Tax liability of Rs. 26,43,025 - For the balance amount of Rs. 6,03,843/- we allow the Appeal in view of the Revenue Neutrality - interest and penalty confirmed in the OIO are set aside.
Appeal disposed off.
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2023 (12) TMI 678 - CESTAT MUMBAI
Classification of service - renting of immovable property service or construction service? - sub-leasing the industrial lands allotted by Maharashtra Industrial Development Corporation (MIDC) to various customers - HELD THAT:- Under the provisions of Section 66E ibid, the service under the category of ‘renting of immovable property’ has been considered as a declared service. Thus, any amount received towards ‘rent’ for letting out the property will only be liable for payment of service tax and not otherwise. As per the contractual norms, the rent amount has been fixed, which the appellant is entitled to receive from the lessee for letting out the property, which had not been disputed by the department in the present case. One time premium received by the appellant cannot be equated with rent inasmuch as the said amount is payable by the lessee for obtaining lease of the immovable property and for various infrastructural facilities provided in that property. In other words, since such premium amount is not in the context with the occupation of the immovable property leased, the same shall not be treated as a ‘consideration’, for letting out the property.
The issue arising out of the present dispute is no more res integra, in view of the order passed by this Tribunal, in the case of M/S. GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY VERSUS CCE & ST, NOIDA [2014 (9) TMI 306 - CESTAT NEW DELHI] where it was held that Service Tax under Section 65(105)(zzzz) read with Section 65(90a) cannot be charged on the “premium” or ‘salami’ paid by the lessee to the lessor for transfer of interest in the property from the lessor to the lessee as this amount is not for continued enjoyment of the property leased.
There are no merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellant. Therefore, by setting aside the impugned order, the appeal is allowed in favour of the appellant.
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2023 (12) TMI 677 - CESTAT NEW DELHI
Scope of SCN - dealing with an issue not raised in SCN - Non-payment of service tax - maintenance and repair services - manpower recruitment agency services - period pre and post to 01.06.2007 - invocation of extended period of limitation - HELD THAT:- A show cause notice is the foundation of any demand but the Commissioner (Appeals) proceeded to comment upon the order passed by the Joint Commissioner observing that the Joint Commissioner just took recourse to the show cause notice. The Commissioner (Appeals) could not have dealt with an issue not raised in the show cause notice.
Period prior to 01.06.2007 - HELD THAT:- Once it was found as the fact that the nature of services provided by the appellant were works contract service and this service had not been carved out of the earlier entries relating to maintenance and repair services and manpower recruitment agency services, it has to be held that no service tax could have been demanded. In any case, the appellant had not rendered manpower recruitment services and, therefore, even otherwise, the demand could not have been confirmed under a different category. In fact, no reasons have been given by the Commissioner (Appeals) to confirm the demand, except stating that the show cause notice can be ignored.
Period post 01.06.2007 - HELD THAT:- It is not in dispute that the appellant had rendered works contract and had also paid service tax. Without giving any reasons as to why service tax demanded under maintenance and repair services and manpower recruitment agency services was required to be confirmed, the Commissioner (Appeals) simply confirmed the demand holding that since the appellant had applied for registration, the demand against service tax was required to be confirmed. In any view of the matter, once the service tax is proposed under a particular category it cannot be confirmed under a different category.
The order dated 24.10.2013 passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside - Appeal allowed.
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2023 (12) TMI 676 - CESTAT NEW DELHI
Evasion of payment of service tax on 80% of the contract value considering the same as supply of material - period from 01.04.2012 to 30.06.2012 and from 01.07.2012 to 30.01.2014 - demand under works contract service.
Period from 01.04.2012 to 30.06.2012 and from 01.07.2012 to 30.01.2014 - HELD THAT:- It is not in dispute that the service tax has been demanded on amount of Rs. 6,80,248/- which was received by the appellant on trading of goods. No service tax could have been levied. It also needs to be noted that the appellant discharged VAT liability on the aforesaid amount.
Demand raised under works contract service - HELD THAT:- The works contract awarded to the appellant clearly mentions the value of material as 80% of the contract value and service portion as 20% of the contract value. The contracts awarded to the appellant are composite in nature as they involve transfer of material as well as rendering of service.
Learned consultant for the appellant has placed reliance upon the decision of the Tribunal in the matter of the appellant in M/S. UNITED ELECTRICALS AND MECHANICAL WORKS VERSUS CST, DELHI [2017 (4) TMI 1133 - CESTAT NEW DELHI]. The Commissioner (Appeals) has distinguished this decision for the reason that the bifurcation of 80% and 20% was artificially created - it was held in the said case that We have perused a few work orders, which clearly stipulated that 80% of the value shown to have suffered VAT with reference to supply of materials. Considering the ratio followed in the decided cases cited above, in identical set of facts, we find that the impugned order is not sustainable. Accordingly, the same is set aside - The Commissioner (Appeals) was not justified in distinguishing the aforesaid decision of the Tribunal rendered in the case of the appellant.
The order dated 06.06.2018 passed by the Commissioner (Appeals) is set aside except to the extent it has confirmed the demand of service tax on trade discount - Appeal allowed.
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2023 (12) TMI 606 - CESTAT HYDERABAD
Irregular availment of CENVAT Credit - invoices were issued more than one year prior to the date of taking such credit - Short payment of service tax on OLIDAR service - suppression of facts - irregularly availing exemption in terms of Notification No.01/2006-ST - Demand towards security service and consultancy service under RCM - Extended period of limitation - Penalties.
Irregular availment of CENVAT Credit - invoices were issued more than one year prior to the date of taking such credit - HELD THAT:- It is found that the Appellants have regularly taken Cenvat credit and no case is made out of having taken credit after more than one year from the date of invoice. In this view of the matter, this ground is allowed in favour of the Appellant.
Short payment of service tax on OLIDAR service - suppression of facts - HELD THAT:- Evidently Appellants have not disputed the amount of turnover as calculated by the Revenue and the same is matching with their financial records for the period April 2011 to March 2016 - It is already held herein above that the Cenvat credit availed by the Appellant is legal and proper and the same is not irregular. Thus, Appellants have rightly discharged the service tax and there is no case of escaped service tax. Accordingly, this ground is allowed in favour of the Appellant and the demand is set aside.
Short payment of service tax - suppression of facts - HELD THAT:- It is found that the Appellants have got matching turnover for sales of goods, which is not exigible to service tax during the period of dispute. Accordingly, this ground is allowed in favour of the Appellant and set aside the demand.
Irregularly availing exemption in terms of Notification No.01/2006-ST - HELD THAT:- The Appellants have simply provided multimedia presentation, website hosting and domain registration services which are not taxable under the category of OLIDAR service. Accordingly, this ground is allowed in favour of the Appellant and set aside the demand.
Demand towards security service and consultancy service under RCM - HELD THAT:- The expenses in question, incurred by the Appellant, have not been received from Advocate or a firm of Advocates towards legal services. Accordingly, it is held that no service tax demand is attracted under RCM. Accordingly, this ground is allowed and the demand is set aside.
Extended period of Limitation - HELD THAT:- As the returns of the Appellant were in arrears almost for a period of two and half years, the returns were filed during the course of investigation. Accordingly, extended period of limitation is rightly invokable. It is the statutory duty of the Appellant to file their returns in time.
Penalties - HELD THAT:- It is found that no case of suppression of any facts is made out, save and except the delay in filing the returns. Further, all the grounds are allowed on merits and no demand survives. In this view of the matter, all penalties imposed on the Appellants also set aside.
The impugned order set aside - appeal allowed.
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2023 (12) TMI 605 - CESTAT NEW DELHI
Delay in filing of appeal or not - service of the order - time limitation - appeal rejected on the ground of being filed much after a period of 60 + 30 days from the date of receipt of the Order-in-Original - Recovery of service tax alongwith interest -HELD THAT:- The Order-in-Original dated 28.07.2020 was served upon the appellant by two different modes one by speed post which apparently has not returned back ‘undelivered’; two that the order was delivered to one of the employee of appellant namely Shri Prateek Rao. He admittedly is the employee of appellant as service supervisor. It is opined that issuance of copy of order by speed post does not amount to service thereof as such because it will be mere dispatch of the order - No doubt in section 37C, speed post is the mode of service but proof of dispatch is still mandatory. In the absence of proof of receipt of the O-I-O to the appellant sent by speed post, the same cannot be held to have been served.
Shri Prateek Rao, who admittedly received the order is an employee of the appellant in their workshop. In addition, ld. CA has placed on record an affidavit of Shri Prateek Rao, wherein he deposed that he received notice but he failed to bring it to the notice of the appellant. The contents of said affidavit are fully corroborated by partner of the appellant, Shri Abbas Ali Ghasswala - It gets clear from the affidavits that the Order-in-Original could never be brought to the notice of the appellant. It is only from the recovery notice dated 23.02.2023, the appellant acquired knowledge about the Order-in-Original dated 28.07.2020. On the very next day, appellant applied for the copy of the said order and not in later than 10 days of getting the copy of the impugned order, appeal has been filed.
The present appeal shall not be thrown at the threshold and shall be decided on the merits of the case - this is a fit case to be remanded to the Commissioner (Appeals) with the direction to decide the appeal on merits of the case after giving reasonable opportunity of hearing to the appellant - appeal is allowed by way of remand.
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2023 (12) TMI 602 - CESTAT CHENNAI
Valuation of service - inclusion of freight charges in the taxable value for C & F service - invocation of extended period of limitation - penalty - HELD THAT:- The facts show that in respect of C & F services provided by appellant to M/s Ultra Tech Cement Ltd. the appellant had entered into two separate agreements. One for C & F services and the other for providing GTA services. It is asserted by the Ld. Counsel that the appellant is a proprietary concern and when M/s. Ultra Tech Ltd informed them that they wanted a separate agreement for GTA services and that they would discharge the service tax, the appellant agreed accordingly. The letter issued by M/s Ultra Tech Ltd dated 27.06.2013 establishes that the service tax has been paid on freight charges by M/s Ultra Tech Ltd. However, they are discharging service tax only as service recipient Further it is also brought out that the appellant has collected mark up on the freight charges - Further it is also brought out that the appellant has collected mark up on the freight charges. They have also used their own trucks to provide transportation of goods. From these facts it would require to remand the matter to verify such details and to quantity the demand on such basis - there is short payment of tax as the appellant has to include the freight charges in the taxable value for the reason that appellant had provided such services as part of Clearing and Forwarding Agency services. The issue on merits is answered against the appellant and in favour of Revenue.
Time Limitation - HELD THAT:- Apart from the allegation that the appellant had bifurcated the contracts there is no positive act, of suppression alleged in the show cause notice. As already discussed, even though the contract is bifurcated, the appellant has not suppressed this fact from the department. The appellant had collected the freight charges by a separate invoice and this was properly accounted. So also they were under the bonafide belief that as M/s. Ultra Tech Cement Ltd was discharging the service tax under GTA, and that appellant is liable pay service tax on freight charges under C & F services - appellant has made out a strong case on the ground of limitation. The show cause notice issued invoking the extended period is cannot sustain.
Penalty - HELD THAT:- The penalties imposed requires to be set aside invoking Section 80 of the Finance Act, 1994 as it stood during the disputed period.
The impugned order is modified to the extent of the setting aside the demand and interest and penalties for the extended period. The demand of service tax and interest payable (if any) for the normal period is sustained. The penalties are entirely set aside - Appeal allowed in part.
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2023 (12) TMI 569 - CESTAT MUMBAI
Rejection of refund of Cenvat Credit - ineligible input services - General Insurance service - Security Insurance service - Restaurant facility service - HELD THAT:- It is settled position that denial of Cenvat credit can be done by issuing notice u/r 14 ibid and it cannot be rejected solely u/r 5 ibid. Rule 14 provides for recovery of Cenvat credit wrongly taken or erroneously refunded. In the instant appeals, there are no document on record to establish that any notice under Rule 14 of Cenvat Credit Rules, 2004 has been issued to the appellant for recovery of irregularly availed Cenvat credit. From the language of Rule 5 ibid it is clear that it merely provides for refund of Cenvat credit and it nowhere talks about the correctness/recovery of availment of Cenvat Credit, which is the mandate of Rule 14 ibid only. Admittedly in the instant matter no such steps had been taken.
The instant appeal is allowed by setting aside the impugned order.
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2023 (12) TMI 568 - CESTAT CHENNAI
Levy of service tax - Business Support service or not - amount accounted as net-operating income in the financial accounts of the appellant is a consideration received by the appellant for providing services - extended period of limitation - HELD THAT:- The appellant being a freight forwarder has discharged the service tax on the amount received for providing freight forwarding services. The amount accounted under ‘net operating income’ is now brought to levy of service tax under BSS. This amount is only excess of the freight charges. The differential freight earned by the appellant is not consideration for services rendered by them to their client.
The issue as to whether the difference in the freight charges is a consideration for services and is liable to service tax was analysed in various decisions. In the case of GREENWICH MERIDIAN LOGISTICS (INDIA) PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI [2016 (4) TMI 547 - CESTAT MUMBAI], the very same issue came up for consideration and the Tribunal held that the notional amount earned by the assessee from purchase and sale of cargo space cannot be subject to levy of service tax.
In the case of COMMISSIONER OF SERVICE TAX, NEW DELHI VERSUS M/S. KARAM FREIGHT MOVERS [2017 (3) TMI 785 - CESTAT NEW DELHI] it was held that demand of service tax on the income earned by the assessee is profit earned out of sale of cargo space and cannot be subjected to levy under BAS.
After considering the submissions and following the decisions, it is opined that the demand of service tax cannot sustain and requires to be set aside.
Time Limitation - HELD THAT:- Demand has been raised after the verification of the accounts of the appellant by Audit Group. The quantification of demand has been arrived from the accounts maintained by appellant - there are no positive act of suppression with intent to evade payment of tax established by department Further, the issue is contentious and there are several decisions in favour of assessee - the SCN issued invoking extended cannot sustain. The issue on limitation is also answered in favour of appellant.
The impugned orders are set aside - Appeal allowed.
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2023 (12) TMI 567 - CESTAT CHENNAI
Levy of Service Tax - Brand Promotional Activities or not - amounts received from M/s.India Cements Ltd. under the IPL Playing Contract entered by the appellant with M/s.ICL as well as the BCCI - HELD THAT:- From the agreement, it can be seen that the appellant is under the control and supervision of the M/s.ICL during the period of agreement. The appellant is restricted from playing cricket match for any other team. So also, it is obligatory for the appellant to inform any medical condition which affects his ability to play. The appellant has to undergo medical examination as required by M/s.ICL. Again, the appellant is under obligation to attend training, coaching etc. These terms of the contract strongly indicate that the contract is in the nature of an employment contract. Though the appellant may be an independent professional player his services are taken up by M/s.ICL for playing IPL under the team ‘Chennai Super Kings’. So also, the remuneration paid to the appellant is fixed. If he is not able to play by reasons stated in the agreement, the appellant is to be compensated and thus is taken care of by M/s.ICL. Even though the appellant takes part in the promotional activities, the remuneration received remains fixed and is not based on the profit earned by M/s.ICL from such advertisements - The appellant is hired to play cricket and has not been hired to do only the promotional activities. The appellant being a professional cricketer, M/s.ICL has hired the appellant to play cricket which is the dominant activity of the contract. Merely because the appellant engages in some promotional activities of the employer, as part of playing cricket by way of wearing the shirt showcasing the logo and name of M/s. ICL etc., it cannot be said that the entire payment is for brand promotional activities.
The Tribunal in the appellant’s own case CCE & ST, CHENNAI VERSUS L. BALAJI, S. BADRINATH, DINESH KARTHICK, MURALI VIJAY, VIDYUT SIVARAMAKRISHNAN, ANIRUDA SRIKKANTH, SURESH KUMAR, YO MAHESH, HEMANG BADANI, ASHWIN R,C. GANAPATHY, ARUN KARTHIK KB, KAUSHIK GANDHI, PALANI AMARNATH C, ABHINAV MUKUND (VICE-VERSA) [2019 (5) TMI 377 - CESTAT CHENNAI] while disposing a batch of cases had perused the agreement and held that it is in the nature of an employment contract - So also, in the case of YUSUFKHAN M PATHAN AND IRFANKHAN PATHAN VERSUS C.C.E. & S.T. -VADODARA-II [2023 (1) TMI 938 - CESTAT AHMEDABAD] the issue was analysed. The Tribunal held that the relationship between the cricket player and the franchisee is that of an employer-employee relationship.
The demand of service tax cannot sustain and requires to be set aside. The impugned order is set aside - appeal allowed.
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2023 (12) TMI 566 - CESTAT AHMEDABAD
Classification of services - supply of tangible goods service or GTA service - providing of transit mixers for transportation of Ready Mix Concrete (RMC) by the appellant under agreements with various RMC manufactures - charges were recovered on per Cubic Meter of RMC + per KM of transportation basis with minimum monthly load commitment for transportation by manufacturers.
The entire case of the department is that since the manner of payment is fixed and assured minimum amount, the activity cannot be treated as transportation of goods, but it is supply of tangible goods for use to service recipient.
HELD THAT:- The contention of the revenue cannot be agreed upon that merely on the basis of manner of payment the category of service can be decided. There is no doubt that the appellant have been assigned the job by the service recipient exclusively to transport of Ready Mix Concrete which is paramount. The manner of payment of consideration towards service cannot be the criteria to decide the classification of service.
Since undisputedly for the purpose of transportation of RMC the consignment note was issued therefore the criteria prescribed to classify the activity under “goods transport agency service‟ is clearly satisfied. Therefore, on the basis of the fact of the present case, there are no doubt that the activity of the appellant is clearly falls under the definition of “goods transport agency service‟. In such case there is no tax liability on the service provider as the service recipient is required to discharge the Service Tax on reverse charge mechanism in terms of Rule 2(d) of Service Tax Rules, 1994.
In the case of GUNESH LOGISTICS VERSUS COMMISSIONER OF C. EX. & SERVICE TAX, JAIPUR-I [2019 (9) TMI 1419 - CESTAT NEW DELHI], the Principal Bench has held the Appellant has been rendering GTA service by transporting RMC from one place to another as per the directions of the service recipient. The finding to the contrary recorded in the impugned order by the Commissioner that the Appellant was not performing GTA service but was performing STG service cannot be sustained.
In the case of SHRIPAD CONCRETE PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, SURAT-I [2023 (8) TMI 707 - CESTAT AHMEDABAD], this Tribunal has held that the appellant’s service is correctly classifiable under Goods Transport Agency service for which service recipient M/s. Ultratech Cement Limited have discharged the service tax as required under Rule 2(d) of Service Tax Rules, 1994 under reverse charge basis. Therefore, the demand under the category of Supply of Tangible Goods service shall not sustain.
Thus, the activity of the appellant is classified under “goods transport agency services‟. Accordingly, the demand raised under “supply of tangible goods for use service‟ is not sustained - the alternate pleadings made by the appellant that even if the service is not classifiable under GTA, then also the activity being a deemed sale not liable to service tax under “supply of tangible goods for use service‟ not addressed.
The impugned order set aside - appeal allowed.
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