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Service Tax - Case Laws
Showing 81 to 100 of 1616 Records
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2023 (12) TMI 566
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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2023 (12) TMI 527
Levy of service tax - mark-up on freight charges - ocean freight - air freight - activity of the appellant in arranging transportation of the cargo - service or not - HELD THAT:- On perusal of the Annexure to the Show Cause Notice, it is seen that the demand is raised not only on the mark-up but also on the ocean freight and air freight. These charges are not subject to levy of Service Tax during the disputed period. The mark-up received by the appellant on the freight charges is due to the difference in the freight charges collected from the shipper and paid to the shipping / airliners. The issue is no longer res integra, the Tribunal in the case of M/S. TIGER LOGISTICS (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX-II, DELHI [2022 (2) TMI 455 - CESTAT NEW DELHI] held that the activity is trading of cargo space and there is no rendering of service. The demand of Service Tax on mark-up / differential of ocean freight was set aside.
In the case of M/S. DIRECT LOGISTICS INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX BANGALORE SERVICE TAX- I [2021 (9) TMI 500 - CESTAT BANGALORE], the demand was raised on the mark-up received on the difference between the freight charges collected and paid to the shipping liners where it was held that no service tax is chargeable on the difference between the ocean freight collected from the clients and the ocean freight paid to the shipping lines.
The Tribunal in the case of M/S. EMU LINES PVT. LTD. VERSUS COMMISSIONER OF CGST & CE, BELAPUR [2023 (6) TMI 64 - CESTAT MUMBAI] had considered the very same issue where the demand of Service Tax was raised under Business Auxiliary Services. It was held by the Tribunal that the activity does not amount to rendering of service and it is merely trading of cargo space. The said decision was upheld by the Apex Court in COMMISSIONER OF CGST AND CE BELAPUR VERSUS M/S EMU LINE PVT. LTD. [2023 (2) TMI 1155 - SC ORDER].
Thus, the demand of Service Tax on ocean freight / air freight or the mark-up on the above received by the appellant cannot be subject to levy of Service Tax - the impugned orders set aside - appeal allowed.
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2023 (12) TMI 526
Discharge of service tax liability by ‘book adjustment’ - Instructions dated 21.03.2023 issued by the Central Board of Indirect Taxes and Customs - HELD THAT:- It would be seen from the Instructions that the Board had directed that in all cases pending adjudication where the duty/tax had been demanded only on account of the fact that amount due as tax/duty had not been paid as per the procedure laid down but by book adjustment, the adjudicating authority may focus on the reconciliation of duty/tax paid by book adjustment - It is, therefore, clear from the aforesaid Instructions that payment of service tax by book adjustment has been accepted by the Board.
Whether reconciliation was provided to the adjudicating authority? - HELD THAT:- It is seen that the Principal Commissioner, in view of the decision of the Tribunal in M/S. FA & CAO, ECR, HAJIPUR VERSUS COMMISSIONER OF CGST & CX, PATNA-II COMMISSIONERATE [2021 (7) TMI 1407 - CESTAT KOLKATA], noted that the accounts have not been audited by Comptroller and Auditor General of India. It is apparent that the words ‘Comptroller and Auditor General’ in the aforesaid order of the Tribunal have been mistakenly written for the words ‘Controller General of Accounts’. This fact is also clear from the Instructions of the Board wherein reference has been made to Controller General of Accounts.
In the present case, the details of book transfer of the service tax was submitted to the Principal Commissioner from the site of the Controller General of Accounts and the communication dated 13.10.2022 of the Railway Boards clearly provide evidence of transfer of service tax - since the data provided by the appellant has been taken from the website of Controller General of Accounts, Ministry of Finance, the directions contained in the Instructions dated 21.03.2023 stand fulfilled. The appellant, therefore, made payment of service tax by book adjustment.
The impugned order dated 31.10.2022, therefore, cannot be sustained and is set aside - Appeal allowed.
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2023 (12) TMI 525
Levy of Service tax - Club or Association Service - doctrine of mutuality - management and maintenance of Sumel Business Park-2 of commercial scheme comprising various commercial buildings owned by the member of the appellant society - HELD THAT:- It is found that in the absolutely identical issue involved in the identical facts in the appellant’s own case for a different society i.e. Sumel Business Park-3 Corporative Service Society Limited, this Tribunal in THE SUMEL BUSINESS PARK 3 CO OPERATIVE SERVICE SOCIETY LTD VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [2023 (10) TMI 740 - CESTAT AHMEDABAD] decided the matter in favour of the appellant, holding that In the present case since there is a doctrine of mutuality between the appellant’s corporative society and its members, it cannot be said that a person had provided service to another person. There is no difference between the corporative society and its members that means both are one. Accordingly, there is no service provision by one person to another person. Therefore even as per the definition of service provided under section 65B(44) with effect from 01.07.2012, the activity between the appellant and it's members does not fall under the definition of service.
From the above decision of this Tribunal, it can be seen that the facts and the legal issue involved in the present case is same as in the above case. Therefore, the ratio of the above decision is squarely applicable in the present case - the impugned order set aside - appeal allowed.
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2023 (12) TMI 484
Interest on refund denied - relevant date - HELD THAT:- Hon’ble Apex Court’s decision in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [2006 (1) TMI 55 - SUPREME COURT], relied upon by the various judgments cited by the appellants, is distinguishable on the facts that in the case of Sandvik Asia, the refund was granted inordinately in a delayed manner i.e. after 20 years.
The provisions regarding interest as provided in the Central Excise Act prevail and this Tribunal cannot intervene as regards the date from which the interest is payable or as regards the rate of interest, so far as refunds under Central Excise Act, 1944 are concerned.
Appeal dismissed.
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2023 (12) TMI 483
Import of service or not - reverse charge mechanism - Pure agent - service received from M/s. Bestinet, Malaysia - Appellants are authorised by Malaysian Government to conduct screening tests and bio metric registration of the persons seeking employment in Malaysia and upload the results in the web portal – Foreign Workers Centralised Management Scheme (FWCMS) maintained by M/s. Bestinet SDN BHD, Malaysia - suppression of facts or not - invocation of extended period in terms of Section 73(1) of the Finance act, 1994.
HELD THAT:- The appellant was collecting Rs.2000/- for each prospective employee who are the service receivers which is inclusive of US$ 30 which is paid to M/s. Bestinet upon raising of periodical invoices on the appellant. The total demand confirmed of Service Tax during the period from September 2014 to June 2017 worked out to Rs.36,36,856/- after giving exemption for the amounts collected towards diagnostic / medical screening tests. The Service Tax liability was computed on this US$ 30 which is the fees collected by the appellant for biometric registration of the candidates on FWCMS. The appellant acted as an agent of the Bestinet in collecting the fees of US$ 30 which was paid on periodical basis to M/s. Bestinet. The invoices raised by the appellant did not indicate collection of any other amount over and above US$ 30 payable by each foreign worker. In view of the above findings, the nature of services rendered by the appellant were in the nature of a pure agent as far as the fees for biometric registration is concerned.
The amount alleged to have been collected by the appellant over and above US$ 30 is only towards screening test conducted by the appellant which was already held to be exempt in the impugned Order-in-Original dated 30.06.2021 under Notification No. 25/2012-ST dated 20.06.2012.
As such, the demand of Rs.36,36,856/- collected by the appellant as fees for biometric registration of foreign workers who are the ultimate service recipients and which was paid to M/s. Bestinet, cannot be sustained. As the appellant succeeds on merits there is no need to discuss about the invocation of extended period.
The impugned order is ordered to be set aside - Appeal allowed.
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2023 (12) TMI 482
CENVAT Credit - inputs/capital goods - MS items like angles, channels, beams, etc., falling under Chapter 72 & 73 of CETA - Chargeability of interest under Rule 14 of CCR on the amount of Cenvat credit taken and reversed - extended period of limitation.
Credit on MS items - HELD THAT:- Hon’ble High Court of AP in COMMR. OF C. EX., VISAKHAPATNAM-II VERSUS SAI SAHMITA STORAGES (P) LTD. [2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT] have held that inputs like cement, steel, etc., used for construction of warehouses from which taxable services under the head ‘renting of immovable property’ are performed, the inputs are eligible for Cenvat credit - credit allowed.
Chargeability of interest under Rule 14 of CCR on the amount of Cenvat credit taken and reversed - it is claimed that there has been subsequent amendment in Rule 14, wherein it has been provided that interest is chargeable on Cenvat credit taken and utilized - HELD THAT:- In view of the ruling of Hon’ble Apex Court in UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. [2011 (2) TMI 6 - SUPREME COURT] and as the period falls prior to the amendment of Rule 14, and there is no specific mention in the amending Act that amendment shall apply retrospectively, the charging of interest is upheld.
The Appeal allowed in part to the effect that Cenvat credit has been rightly taken and also hold that interest is rightly charged. All penalties imposed are set aside, in the facts and circumstances of the case.
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2023 (12) TMI 481
Non-payment of service tax - service tax registration not obtained - Commercial Training and Coaching Services - institute is acting as a learning centre for Punjab Technical University and as a result of the same a degree or a diploma is awarded to the students for participating in the offered programs - HELD THAT:- It is evident that the Institute who fall under this category should be imparting skill, knowledge or lessons or any subject other than sports, with or without issuance of certificate and includes coaching or tutorial classes. In the present case, the institute is acting as a learning centre for Punjab Technical University and as a result of the same a degree or a diploma is awarded to the students for participating in the offered programs. Once that being by the definition as is exists during the relevant period, they are out of this definition as the definition clearly stated that it was with the purpose of issuance of occasional commercial teachings not a degree or a diploma granted by the university. After 01.07.2012 the definition of service was amended and concept of negative list is brought.
It is undisputed that Punjab Technical University has been constituted by the Act of State Legislature. The degree is conferred by the said university on the students who undergo the courses offered by the said university either by attending the residential programs or attending the courses through distance Education Program. The clarification or circular issued by the UGC do not bar the conferment of the degree by Punjab Technical University to the students who undertake the degree programmes offered by the university through distance education programme - Once the degree has been conferred by the university duly constituted under a State Act or a Central Act, the institute offering such programmes will, go out of the ambit of the Commercial Coaching and Training Services.
Delhi bench has in case of Punjab Technical University [2016 (1) TMI 162 - CESTAT NEW DELHI] after examining the Memorandum of Understanding etc has held that such centres are franchisee of the PTU and has held that service tax will be leviable under the category of Franchisee Services.
From the above decision it is evident that the transactions between the appellant have been held to be taxable under the category of Franchisee Services. If the service tax is now levied under the category of Commercial Coaching and Training Centre Service again the same will amount to double taxation under two different categories. Thus the decision holding that the services provided by the appellant are classifiable under the category of Commercial Coaching and Training Center Services is contrary to the above decision of Delhi Bench.
It is already held that the degree provided by the Punjab Technical University is recognized by the law and hence the deletion of the said phrase will not have any impact on findings recorded by us to the effect that the prior to introduction of Negative List, the services provided by the appellant are not covered by the definition of Commercial Training or Coaching Services.
There are no merits in the impugned order and the same is set aside - appeal allowed.
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2023 (12) TMI 480
Benefit of Cum duty price denied - services of Management, Maintenance or Repair Service - Erection Commissioning and Installation Services - allegation that services were provided clandestinely.
The issue which has to be decided by this court is whether there is any conflict between the decision of Hon’ble Supreme Court as relied upon reported by the Learned Commissioner (Appeals) in AMRIT AGRO INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., GHAZIABAD [2007 (3) TMI 14 - SUPREME COURT], and which distinguished the decision of COMMISSIONER OF CENTRAL EXCISE, DELHI VERSUS MARUTI UDYOG LTD. [2002 (2) TMI 101 - SUPREME COURT], or both operate in different domains. On same issue of cum duty price is another decision in COMMISSIONER OF C. EX; JAIPUR VERSUS DUGAR TETENAL INDIA LTD [2008 (3) TMI 50 - SUPREME COURT], which also had the benefit of referring to the decision of COMMISSIONER OF CENTRAL EXCISE, DELHI VERSUS MARUTI UDYOG LTD. [2002 (2) TMI 101 - SUPREME COURT].
HELD THAT:- This Court finds that in the decision of Maruti Udyog Ltd, that the cum duty price realised by the assesse was entire price inclusive of Excise duty. Therefore by not separately charging nor intending to charge assesse had taken upon itself to discharge the liability to pay taxes on the good sold, therefore cum duty benefit will be available to it, was the decision of the Hon’ble Court.
As against this, in the matter of Amrit Agro Industries Ltd Vs. Commr of C.Ex Ghaziabad cited (supra), the Apex Court held that in peculiar circumstances of matter when classification of roasted Peanuts was changed from chapter 21 to chapter 20 of the C.Ex. and an exemption granted of Notification No. 4/97 was being availed earlier and therefore duty charged was nil in effect. And when with change of classification to chapter 20 some duty became payable without the exempted rate (nil), same also should be considered as price inclusive of tax. Therefore further benefit was not required to be given to the assesse, consequent upon change of classification of the goods.
Thus, it is apparent that there is no conflict between various decisions cited supra of the Hon’ble Apex Court and there is a consistency that whenever matter pertains to clandestine removals or invocation of Section 11A, in cases where no duty on invoice was charged or no invoices issued in which the benefit is generally sought to be derived by evader by capturing market through lower price vis a vis., the general tax paying competitors, in such a case cum duty benefit will be afforded to such assesseee as it did not charge or intended to charge duty, whereas in other cases which pertain to classification disputes or there was an indication to the contrary indicting the price was cum duty or not cum duty, even if ‘Nil’ there the benefit shall be suitably altered.
In the instant case, this court finds that services have been rendered by the appellant, but without registration or filing returns. Therefore, under the circumstances it could not be said in the facts of the case that cum duty benefit was deniable to the party. Commissioner (Appeals) having thus wrongly interpreted the decision of the Apex Court, and having ignored other decisions is directed to re-work the duty by allowing cum tax benefit to the assesse. Needless to say the interest and penalty, if any will also be reworkable accordingly.
Appeal is allowed by way of remand.
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2023 (12) TMI 479
Nature of transaction - service or not - payment of fees paid to USFDA for approval of their medicaments - levy of service tax or not - applicability of reverse charge basis under Section 66A or not - whether the remand ordered by the commissioner (Appeals) is correct or otherwise?
HELD THAT:- It is found that the activity is a service or otherwise that depends on the issue that whether the USFDA should be treated as Government in terms of ‘Negative List’ under Section 65B(37). Therefore, the activity is service or otherwise is a consequential to the decision, whether the Service provider to the government or other then the Government. Therefore, the appellant cannot be agreed upon that the decision of the activity as service attained finality as per original order, which was not challenged by the department before the Commissioner (Appeals). Accordingly, there are no infirmity in the impugned order in appeal whereby the matter was remanded to the commissioner (Appeals). The appellant is at liberty to raise any of the issue in their defense before the Adjudicating authority. Therefore, the remand is not prejudicial to the interest of the appellant.
The impugned order is upheld and the appeal filed by the appellant is dismissed.
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2023 (12) TMI 478
Non imposition of penalty under Rule 15 (3) of Cenvat Credit Rules, 2004 - HELD THAT:- From reading of the above Rule 15(3) it is clear that penalty under the aforesaid rule can be imposed only when the credit has been taken or utilized wrongly by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of these rules or of the Finance Act or of the rules made thereunder with intent to evade payment of service tax - In the facts of the present case all the show cause notices were issued on the same issue subsequent to the show cause notice related to the case which was decided by the Hon’ble Gujarat High Court in the appellant’s own case reported at MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS [2015 (5) TMI 663 - GUJARAT HIGH COURT].
The Adjudicating Authority after discussion that since the department was aware of availing the cenvat credit by the respondent and the present show cause notices were issued subsequent to the first SCN therefore, there is no suppression of fact. Hence, the penal provision under Rule 15 (3) is not invokable - Considering the facts and circumstances of the present case, the Adjudicating Authority agreed upon, in as much as the penalty under Rule 15 (3) of CCR, 04 was not imposed.
The penalty under Rule 15 (3) is not imposable not only for the reason the demand does not exist but also independently on its merit. Accordingly, the revenue’s appeals are not maintainable hence the same are dismissed.
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2023 (12) TMI 477
Classification of service - activities of textile processing of the appellant in the factory of the service recipient - levy of service tax - activity of transportation of goods.
Classification of service - Manpower Recruitment or Supply Agency Service or not - activities of textile processing of the appellant in the factory of the service recipient - HELD THAT:- It is found that as per the contract with Valson Industries the salient terms of the contract is that the contract is a job work contract which includes the activity of warping, weaving, mending, knitting and packaging of grey and finished fabrics and texturizing, twisting, reeling, coning, rebinding and packing of grey and dyed finished yarn for different qualities - From the nature of job work and the service charge therefore it is clear that the contract remotely does not indicate that the activity of the appellant is of Manpower supply or recruitment service. As per the contract the appellant is supposed to carry out various textile processing activities and for which the payment is fixed on per metre basis irrespective of the number of manpower is deputed for the said job work. - It is observed that the appellant have fulfilled all terms and conditions as prescribed under Para 3 of the Board Circular 190/2015 – ST dated 15.12.2015. Accordingly the activity of the appellant clearly does not fall under the service of Manpower supply or recruitment service. Therefore, the demand on this count is not sustainable.
Levy of service tax - supply of tangible goods for use service - activity of transportation of goods - HELD THAT:- It is found that the appellant has merely acted as transporters of goods and issued consignment notes/LR one sample LR - From the above LR it is clear that the appellant has acted as transporter of goods for which the consignment note was issued accordingly the activity of the appellant on this count clearly not classifiable as supply of tangible goods for use hence the demand on this count is not sustainable.
The demand of service tax on both the counts is not sustainable - the impugned order is set aside - Appeal allowed.
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2023 (12) TMI 445
Levy of service tax - Renting of Immovable Property Services or not - Appellant has been giving the premises situated at Krishi Pradarshini, Aligarh on rent to different vendors/persons for carrying out business from that premises - registration not taken - non-payment of service tax - non-filing of statutory ST-3 returns as prescribed - demand alongwith interest and penalty - extended period of limitation - HELD THAT:- The taxable service under the category of renting of immovable movable property with effect from 01.07.2012 has been made declared service as per Section 66E of the amended Finance Act, 1994. Also all the expansions in the definition as it existed prior to this date have been deleted. Thus all cases of renting of immovable property has been declared as taxable service and made liable to service tax, without any exception for those specified under the negative list - it is not found that appellant falls under any of the category as specified by the negative list.
From the plain reading of Notification No.25/2012 it is evidence that this entry exempts the services of charitable nature of fake registered society/trust registered under Section 12AA of the Income Tax Act. It does not say that the trust/society registered under Section 12AA of the Income Tax Act is exempt from payment of service tax. The activities undertaken by the appellant are in nature of commercial activities or a consideration for providing certain income - there are no merits in the arguments advanced by the appellant to affect that for the reason that they are registered under Section 12AA of Income Tax Act, this exemption should be allowed to them. In our view this exemption Notification is not available to the appellant.
Section 78 is pari material with Section 11AC of the Central Excise Act, 1944. Since it is held that extended period has been rightly invoked under Section 73 of the Finance Act, 1994, penalty under Section 78 cannot be faulted with - there are no irregularity in respect of penalties imposed. Further, penalty under Section 77 has been imposed for the reason that appellant was not filing the ST-3 returns during the said period and also the penalty imposed seems to be reasonable, the penalty for non-submission of ST-3 return upheld. Late fee also imposed under Section 70 of the Act read with Rule 7C of the Act seems reasonable.
Interest - HELD THAT:- As the appellant has failed to pay the service tax by the due date, the demand of interest under section 75 of the Finance Act, 1994 is upheld.
Extended period of Limitation - HELD THAT:- Having known that service tax was leviable under this category appellant should have taken registration and started paying the service tax. They deliberately did not took registration and did not paid the service tax during the period of demand. Hence the benefit of bonafide belief cannot be extended in the present case to the appellant. Also it is on record that appellant were not filing any returns etc during the period and have never declared the services provided to the department, despite being aware that the services provided by them were taxable - Extended period rightly invoked.
There are no merits in the appeal - appeal dismissed.
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2023 (12) TMI 439
Maintainability of the writ petition on the ground that an alternate remedy is available - Correctness of Instruction dated 11.05.2011 issued by the Director, Service Tax under the Ministry of Finance through its Department of Revenue - declaration that Course Certificate being issued by Flying Training Institutes cannot be held as “recognized in law” for the purposes of exemption from paying service tax - time limitation - HELD THAT:- On perusing the judgment of the Delhi High Court in Indian Institute Aircraft Engineering [2013 (5) TMI 592 - DELHI HIGH COURT] it is found that Instruction dated 11.05.2011 that is impugned in the present writ petition was also the subject matter of consideration therein. The Division Bench after considering various provisions of the Act of 1994 including Section 65(27) alongwith Rule 133-B of the Rules of 1937 has held in clear terms that the certificate/training qualification offered by the Institute approved by the DGCA have been conferred some value in the eyes of law. A distinction has been made under the relevant Statutes and the Rules framed thereunder between an approved institute and an un-approved one. Since a successful candidate from an approved institute is entitled to enforce the right conferred on him by Statute, the inference drawn was that the Course Completion Certificate offered by such Institute was recognized by law.
The learned counsel for the respondents is justified in contending that in view of low tax effect, the guidance under Instruction dated 22.08.2019 issued by the Department of Revenue was followed. He submits that since Instruction dated 11.05.2011 had not been held to be illegal or ultra vires, the withdrawal of the proceedings on the basis of earlier Instruction dated 17.08.2011 was justified.
Maintainability of the writ petition on the ground that an alternate remedy is available - HELD THAT:- It is found that the present writ petition was filed on 10.09.2014 raising a challenge to Instruction dated 11.05.2011 and the show cause notice dated 18/21.10.2013. Since Instruction dated 11.05.2011 was also the subject matter of consideration by the Delhi High Court vide its decision in Indian Institute of Aircraft Engineering [2013 (5) TMI 592 - DELHI HIGH COURT] that was decided on 21.05.2013, the writ petition was entertained. It was informed however that the judgment of the Delhi High Court was subjected to challenge before the Hon’ble Supreme Court. The hearing of the writ petition was therefore deferred till the time the proceedings were decided by the Hon’ble Supreme Court. In the interregnum, the show cause notice issued to the petitioner was adjudicated.
Time Limitation - limitation of period of eighteen months as prescribed by Section 73(1) - HELD THAT:- It is seen from the show cause notice dated 18/21.10.2013 that it does not refer to any fraud, collusion, wilful mis-statement or suppression of facts at the behest of the petitioner to invoke the larger period of limitation of five years. For this reason the provisions of Section 73(1) would be attracted and the period beyond eighteen months would not be liable to be taken into consideration. Thus the period of demand from August-2008 to April-2012 being beyond eighteen months from issuance of the show cause notice dated 18/21.10.2013 is liable to be excluded.
The petitioner has made out a case for grant of relief. Accordingly it is held that Instruction dated 11.05.2011 cannot be made applicable to the facts of the present case. Hence the show cause notice dated 18/21.10.2013 and the order dated 24.12.2014 passed on that basis are set aside - petitioner would be entitled to refund of the amounts of service tax as paid under protest pursuant to the show cause notice dated 18/21.10.2013 in accordance with law.
Petition allowed.
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2023 (12) TMI 438
Benefit of the exemption notification no. 32/2004- ST dated 3.12.2004 - Denial of benefit on the ground that he had produced only the photo copy of the declaration of three service providers on their letter head for which the authenticity of the documents could not be verified - HELD THAT:- The appellant herein while submitting the photo copies of the declaration had sufficiently complied with the conditions of the notification to state that they have not taken the credit of duty paid on inputs or capital goods and did not avail the benefit under the notification no. 12/2003-ST dated 20th June, 2003. During the course of hearing, the learned Counsel for the appellant had produced the original copies of the said declaration, and an opportunity was granted to the learned Authorised Representative for the Revenue to examine the same and on perusal thereof, he did not find any infirmity in the photocopy in comparing the same with the original certificate.
There are similar declarations by other GTA’s on record. There is, therefore, no reason to deny the benefit of the exemption notification to the appellant - it is also found that Circular No.B/16/2005 –TRU dated 27.7.2005, has clarified that in cases where liability for tax payment is on the consignor or consignee, a declaration by the goods transport agency in the consignment note issued, to the effect that neither credit on inputs or capital goods used for provision of service has been taken nor the benefit of notification no. 12/2003 – Service Tax has been taken by them may suffice for the purpose of availment of abatement by the person liable to pay service tax.
The issue decided in favour of the appellant on merits, the issue of levying interest or penalty does not survive - The invocation of the extended period is also not sustainable. The impugned order deserves to be set aside - The appeal stands allowed with consequential benefit.
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2023 (12) TMI 437
Advance payment received in terms of the Notification No. 36/2010 –ST dated 28.06.2010 to avail the benefit of the exemption - Date of receipt of consideration of services in case where cheques were received on or before 30.06.2010 but were honoured on or after 01.07.2010 - suppression of facts or not - extended period of limitation - HELD THAT:- It is not a case of suppression or mis- statement of facts as no specific allegations have been made in the show cause notice. She is right in saying that the issue involved interpretation of the notification so as to be entitle to claim the exemption therein. There can always be two opinion as to whether it is the date of the cheque on which it is being presented or the date when the said cheque is encashed which has to be taken into account. The appellant was under a bonafide belief that since they had received the advance payment by way of cheque prior to the appointed date, they were entitle to the exemption under the notification and therefore did not pay the service tax. In such circumstances, the invocation of the extended period of limitation has been held in series of decisions to be untenable and therefore the demand shall not be maintainable.
In the decision of this Tribunal in M/S. GANNON DUNKERLEY & CO. LTD. VERSUS COMMISSIONER (ADJUDICATION) OF SERVICE TAX, NEW DELHI [2020 (12) TMI 1096 - CESTAT NEW DELHI], it has been observed that where the appellant is regularly filing the returns, the department cannot take a stand that it is only during the audit that it can examine the factual position and therefore it cannot be urged by the department that if the officers of the audit team had not conducted the audit, non-payment of service tax would not have been unearthed and therefore the extended period of limitation could not have been invoked as it was not a case of suppression of facts by the appellant. In the present case also, it is the submission of the appellant that they are duly filing ST-3 returns, which has not been disputed by the learned authorised representative for the revenue and therefore in the light of the principles laid down by the Principal Bench, the extended period of limitation cannot be invoked by the department.
The penalty and the interest shall also not be levied - Appeal allowed.
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2023 (12) TMI 436
Valuation of service - requirement to include amount towards expenses like conveyance, courier charges, miscellaneous expenses, stationery charges and travelling expenses etc. in the assessable value or not - invocation of provisions of the Rule 5 of the Service Tax (Determination of Value) Rules, 2006 read with Section 67 of Chapter 5 of Finance Act 1994, as also the Rule 5(2) of Service Tax (Determination of Value) Rules, 2006 - recovery of interst and penalty.
HELD THAT:- The issue regarding leviability of service tax on the reimbursed amount came up before Delhi High Court in the Writ Petition filed by UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT], where after going through the Statutory Provisions under the Finance Act 1994 and Rules made there under, the Hon’ble Court declared Rule 5 to be ultra vires of the provision of Section 66 & 67 of Finance Act 1994. The Hon’ble Supreme Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] examined the correctness of the judgment of the Delhi High Court upheld the decision of Hon’ble Delhi High Court. The Hon’ble Supreme Court also took note in para 29, that Legislature amended Finance Act in 2015, with effect from 14.05.2015, amending the definition of “consideration” to include reimbursable expenditure / cost incurred by the service provider and therefore observed that with effect from 14.05.2015, by virtue of provisions of Section 67 itself, such reimbursable cost or expenditure would also form part of the valuation of taxable service for charging service tax and also held this amendment has to be prospective in nature. Hon’ble Supreme Court finally dismissed the appeal filed by the Union of India, thereby upholding the decision of the Delhi High Court which had struck Rule 5 as unconstitutional as well as ultra vires.
There is nothing on record in the Show Cause Notice to the effect that the expenses incurred by the Appellants were not being reimbursed on the actual basis by the client. On the contrary, the Appellants have submitted that these were being reimbursed by the clients on the actual basis for which they were issuing debit notes, and not invoice. Therefore, the nature of the expenses / cost is nothing but reimbursable expense / cost. The provision under which such expense / costs were proposed to be included i.e. Rule 5 has been held to be ultra virus, and as such no longer applicable and therefore such reimbursable expenses cannot be included in the gross value charged even by invoking Section 67, keeping in view of the judgment cited supra. It is only after the amendment in the definition of consideration in 2015, such reimbursement can be included in the gross value charged.
The demand cannot be sustained and therefore the Order of the Commissioner (Appeals) is liable to be set aside - Appeal allowed.
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2023 (12) TMI 435
CENVAT Credit - input service or not - Insurance Premium paid to Deposit Insurance & Credit Guarantee Corporation (DICGC) - HELD THAT:- The issue is no longer res-integra and the same have been adjudicated by the Hon’ble Kerala High Court in THE PRINCIPAL COMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE, COCHIN VERSUS M/S SOUTH INDIAN BANK AND M/S CATHOLIC SYRIAN BANK LTD [2022 (12) TMI 1479 - KERALA HIGH COURT] the High Court relying on the ruling of Larger Bench of this Tribunal in South Indian Bank being Final Order No. 20691-30708/2020 dated 23.09.2020 [2020 (11) TMI 120 - CESTAT BANGALORE], have held that similarly situated assessee like banks are entitled to take Cenvat Credit on the premium paid to DICGC for the insurance services rendered by DICGC to the banks. Hon’ble High Court observed that without accepting deposits the bank cannot extend loans which is necessary to earn profit and the banks are under Statutory obligations to ensure the deposits received are issued for conducting the banking business. Further, the commercial banks face the risk of being dilicensed by the RBI if they did not insure the deposits with the DICGC (subsidiary of RBI).
The impugned order is set aside - Appeal allowed.
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2023 (12) TMI 380
Export of service or not - services provided from India and used outside India - demand has been confirmed on the ground that the services rendered by the Appellant are not used outside India and have been consumed in India by the customers located in India and thus the same do not qualify as export of services due to non-fulfilment of the condition laid down in Rule 3(2)(a) of Export of Service Rules - HELD THAT:- The coordinate bench of the Tribunal in the case of ORBIT RESEARCH ASSOCIATES PRIVATE LIMITED VERSUS COMMISSIONER OF SERVICE TAX (APPEALS-I) , NEW DELHI [2023 (8) TMI 246 - CESTAT NEW DELHI] has also relied upon the larger bench decision of the Tribunal in the case of M/S. ARCELOR MITTAL STAINLESS (I) P. LTD (NOW KNOWN AS M/S. ARCELOR MITTAL DISTRIBUTION SOLUTIONS INDIA PRIVATE LIMITED) VERSUS COMMISSIONER SERVICE TAX MUMBAI-II [2023 (8) TMI 107 - CESTAT MUMBAI-LB] and held that the assessee is not liable to pay service tax under ‘Business Auxiliary Service’ because the service provided by the appellant falls under the category of export of service.
Further, the Hon’ble High Court of Bombay in the case of THE COMMISSIONER OF SERVICE TAX, MUMBAI-VI COMMISSIONERATE VERSUS M/S. A.T.E. ENTERPRISES PVT. LTD. [2017 (8) TMI 1233 - BOMBAY HIGH COURT] has dismissed the appeal of the Revenue and upheld the decision of the Tribunal and held that the assessee is not liable to pay service tax as the services rendered by the assessee falls within the definition of export of services.
The impugned order is not sustainable in law and therefore set aside - appeal allowed.
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2023 (12) TMI 379
Demand of service tax - Vague show cause notice - SCN issued without specifying the classification of services - Assessment in terms of Section 72(a) - failure to furnish the return under Section 70 of the Finance Act, 1994 as amended - Activity of transportation of concrete from L&T to Delhi airport project site during the period 2008–09 and 2009–10 using their own vehicle - GTA Service or not.
Assessment in terms of Section 72(a) - failure to furnish the return under Section 70 of the Finance Act, 1994 as amended - HELD THAT:- There is no clarity on the actual activity carried out by the appellant. The show cause notice is completely silent on the nature of respective activities so as to fall under any specific ‘service’ as defined under the Finance Act. The authorities while issuing the show cause notice merely proceeded on the footing that the appellant has not submitted the relevant figures and therefore the department is left with no option but to issue the show cause notice on the basis of available facts and record with them. This Tribunal has time and again observed that the officers have ample powers under the statute to make effective enquiry and investigation. In M/S. SHUBHAM ELECTRICALS VERSUS CST & ST, ROHTAK [2015 (6) TMI 786 - CESTAT NEW DELHI], the Tribunal quashed the show cause notice for the simple reason that relevant facts have not been stated while issuing the show cause notice.
Similar are the observations by the Ahmedabad Bench of the Tribunal in INDO NIPPON CHEMICALS CO. LTD. VERSUS CCE, VADODARA [2009 (4) TMI 140 - CESTAT AHMEDABAD], observing that law gives sufficient powers to officers to conduct enquiries and investigations to bring out the truth, and without making any efforts, on the basis of non-production of documents, on the basis of assumptions and presumptions, a case cannot be made out against the appellant which is the case here.
The department cannot take shelter on account of failure of the appellant to produce and supply the documents, and it was incumbent upon them to have ascertained the actual nature of the services for the purpose of levying the service tax under the respective clause - there are no hesitation in holding tht the show cause notice needs to be quashed being vague.
The Principal Bench of this Tribunal in M/S EXPRESS ENGINEERS & SPARES PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS & SERVICE TAX, GHAZIABAD AND SH. NARESH KUMAR GUPTA (DIRECTOR) VERSUS COMMISSIONER, CENTRAL TAX, GST & CENTRAL EXCISE, MEERUT [2022 (1) TMI 564 - CESTAT ALLAHABAD], referring to the decision of the Apex Court in BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT], that the term “transfer of right to use goods” has neither been defined in the Constitution nor in any of the State VAT Acts or Central Sales Tax Act provided five attributes for a transaction to constitute a transfer of right to use goods.
The activity of supplying the RMC by the appellant on which he has paid VAT, considering it to be a sale transaction has been considered earlier by this Tribunal in the case of GMK CONCRETE MIXING PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, DELHI [2011 (11) TMI 425 - CESTAT, NEW DELHI], where the Principal Bench held that the appellant was engaged in preparation of Ready Mix Concrete (RMC) and while carrying out such dominant object, other ancillary and incidental activities were also carried out - the appellant is not liable to pay service tax on the supply of RMC to M/s L&T and hence the demand of service tax in that regard is not sustainable.
Activity of transportation of concrete from L&T to Delhi airport project site during the period 2008–09 and 2009–10 using their own vehicle - HELD THAT:- The scope of liability of service tax in the category of Goods Transport Agency has been considered by the Tribunal in LAKSHMINARAYANA MINING CO. VERSUS COMMR. OF ST., BANGALORE [2009 (9) TMI 71 - CESTAT, BANGALORE], where the contention of the appellant therein that the levy under the category of GTA was attracted, only when there was a relationship of Agency between the service provider and owner of the goods, carnage or the operators of the goods carriage was upheld in view of the definition of GTA and also the clarification given by the Finance Minister in the Budget Speech note, service tax is chargeable in respect of services received from individual truck owners.
The impugned order set aside - the demand of service tax proposed in the show cause notice under commercial or industrial construction services as per section 65 (105) (zzq) defined as per section 65 (25b) and Works Contract Services as per section 65 (105) (zzzza) of the Act nor are they chargeable to service tax under “Supply of Tangible Goods Use of Goods”. Consequently, neither the extended period of limitation is invocable nor the penalty and interest is leviable under the Finance Act.
Appeal allowed.
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