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Service Tax - Case Laws
Showing 21 to 40 of 29281 Records
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2024 (4) TMI 823
Levy of service tax - Amounts received by the appellant from Priyadarshini Gas Seva [PGS] - Legal Consultancy service (Reverse Charge Mechanism [RCM]) - Renting of immovable property service (from 2009-2010 to 2011-2012) - Miscellaneous income (other than negative list service) - Director’s remuneration under reverse charge - Extended period of limitation and penalty under section 78.
Amounts received by the appellant from Priyadarshini Gas Seva [PGS] - HELD THAT:- There are no essential requirements for levying service tax in this demand, viz., a service recipient, a service provider, a service (or which is not in the negative list) and a consideration for such service. Indisputably, PGS is a unit of the appellant. There is nothing unusual about a unit transferring profits to its parent company. Merely because an amount has been transferred, it does not prove that it was a consideration, for a service (not under negative list) rendered by the parent company to its unit. The Commissioner’s finding is that when PGS was established, the appellant had negotiated with IOC to get PGS distributorship of gas. Therefore, according to the Commissioner, the appellant had rendered a service and what was paid was a consideration for it. There is nothing unusual about a parent company negotiating on behalf of one of its units. Such negotiation does not become a taxable service. Even according to the Commissioner, the negotiation had taken place in 1984-1986 at a time when there was no levy of service tax at all. The demand under this head needs to be set aside and is set aside.
Legal Consultancy service - Reverse Charge Mechanism [RCM] - HELD THAT:- Service tax is to be paid on the consideration paid for a service which was a taxable service (up to 2012) or for service not under negative list (after 2012). It is not, as wrongly held by the Commissioner, on the expenditure booked by the assessee. Under the head Legal Consultancy Service, the appellant had booked some amounts of which to the extent they represented payments made for the legal services, it had paid service tax. Rest of the amounts booked under this head in the appellant’s books of accounts were also paid to the lawyers either for the court fee or towards reimbursements of travel expenses. Reimbursements are clearly not a consideration for a service but a compensation for what was incurred by one which was to be borne by another. In this case, they are the court fee and travel expenses. No service tax can be levied on such amounts. The demand of Rs. 1,26,820/- on the amounts paid towards court fees and reimbursements of travel expenses cannot be sustained and needs to be set aside.
Renting of immovable property service (from 2009-2010 to 2011-2012) - HELD THAT:- The taxable service in dispute is the renting of immovable property which clearly did not include renting of residential accommodation. The appellant agrees to have received the amounts and submits that some part of the income was towards rent on residences provided to its employees. The Commissioner, unable to ascertain the facts from the records, confirmed the demand on the entire income. Unless the Commissioner could establish that what was received was a consideration for rendering a taxable service, he should not have confirmed the demand. The demand of Rs. 4,26,217/- under this head needs to be set aside.
Miscellaneous income (other than negative list service) - HELD THAT:- The Commissioner appears to have lost sight of the fact that service tax is not a tax on income but is tax on the provision of taxable service (before 2012) and provision of a service which is not under negative list (after 2012). Neither before 2012 nor after this date was service tax a tax on income. If an income is received which was not accounted for in the service tax returns, it is open to the department to investigate if that income was a consideration for rendering a taxable service or, as the case may be, for rendering a service which is not in the negative list. Neither before nor after 2012 was service tax payable on income. If the investigation by the department shows that the income was a consideration on which service tax was payable, it can be levied. If the department cannot find any evidence to this effect, as is the case here, no service tax can be charged. The Commissioner’s logic that, since the appellant is not a manufacturer but a service provider and has earned an income, it must be for rendering a service not under negative list, is fallacious - The demand of Rs. 13,55,398/- on this head needs to be set aside and is set aside.
Director’s remuneration under reverse charge - HELD THAT:- The case of the appellant is that it paid the amounts to its full time Directors who are its employees. Unless any contrary evidence can be brought on record by the Revenue, this must be accepted and if so, any service rendered by the Directors to the appellant and amounts which the appellant paid as compensation are clearly excluded from the scope of service tax by section 65 (44) (b) of the Act - The demand on this head needs to be set aside and is set aside.
Extended period of limitation - penalty under section 78 - HELD THAT:- The Central Excise officer has, evidently, not done his job of scrutinising the returns, calling for records and ascertaining if the service tax was correctly paid and later, the audit discovered the incorrect self-assessment by the appellant. This does not prove that the appellant had an intention to evade but only proves that the Central Excise officer under the Commissioner had not done scrutinised the returns as he was required to. Nothing in the entire impugned order establishes intent or adduces any evidence to establish intent - It is held in favour of the appellant and against the Revenue on the questions of extended period of limitation and the penalty under section 78.
Appeal allowed in part.
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2024 (4) TMI 822
Short payment of service tax - outdoor catering services - under-valuation of taxable services - in-flight catering services to International and Domestic airlines - bundled services - HELD THAT:- For an activity to be called as outdoor catering, there has to be the preparation of food, supply of food and serving of the food. Apparently and admittedly, the activity of the respondent herein is that they are providing/supplying food to various airlines alongwith the responsibility of packing and handling of food, loading in transportation thereof alongwith the requisite equipments and of providing the laundry services. This admitted fact is sufficient shown that there is no activity of serving the food, the Hon‟ble Supreme Court in the case of TAMIL NADU KALYANA MANDAPAM ASSN. VERSUS UNION OF INDIA [2004 (4) TMI 1 - SUPREME COURT] has held that a tax on services rendered by outdoor caterers is in pith and substance a tax on services and not a tax on sale of goods or on hire purchase activities.
Even Bombay High Court in the case of NARANG HOTELS AND RESORTS PVT. LTD. VERSUS STATE OF MAHARASHTRA AND OTHERS [2003 (10) TMI 620 - BOMBAY HIGH COURT] has held that the sale by a flight kitchen of eatable or goods is complete when the goods are loaded in the supply unit and despatched when the supplied food is served simultaneously it is outdoor catering else it is merely sale of goods more so in the case when invoice shows it as a separate element.
Thus it is clear that the issue involved in the present case is no more res-integra that supply of F&B per se is not the "outdoor catering service". It rather amounts to sale of F&B. The Adjudicating Authority has considered most of the above said decisions while dropping the demand proposed by the impugned show cause notice.
There are no infirmity in the order, the same is hereby upheld - appeal dismissed.
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2024 (4) TMI 821
Demand of differential service tax - Valuation - non-inclusion on reimbursable expenses incurred by the appellant in taxable services - pure agent services - HELD THAT:- The appellant is only pure agent and all the expenses for transportation, loading and un-loading etc. paid by the appellant were reimbursed from the Principal on actual basis. In that circumstances, the appellant is not required to include the reimbursable expenses in their taxable services.
Moreover, the present issue whether the reimbursable expenses are includable in the taxable value or not, has been examined by this Tribunal in the case of M/s Ganga Carrier Private Limited [2023 (9) TMI 809 - CESTAT KOLKATA], wherein this Tribunal has observed all the 'reimbursement expenses' have been included in the consideration with effect from 14/05/2015. Hence while calculating service tax, the service provider has to include all the expenses whatever he incurred for rendering service, w.e.f.14.04.2015 only and not before that period. The dispute in the present appeal pertains to the period from 2000-01 (October) to 2004-05 (September) and hence, the substitution brought in the definition of 'Consideration' vide Finance Act, 2015 would not be applicable for the period in the present appeal.
As this Tribunal has already been held that the reimbursable expenses are not includible in the taxable value of services, therefore, it is held that the reimbursable expenses in this case, are also not includable in the taxable value of service. Therefore, we hold that the appellant has correctly paid the service tax during the impugned period.
Thus, no demand of differential service tax is sustainable against the appellant - there are no merit in the impugned order and the same is set aside - appeal allowed.
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2024 (4) TMI 820
Non-payment of Service Tax - works contract services - amounts obtained from Form 26 AS (Income Tax Department) for the Financial Year 2015-16 - HELD THAT:- Since the activity of providing WCS is not covered under negative list mentioned in section 66D of the Finance Act (impugned period being subsequent to 01.07.2012), the activity is taxable - The activity is liable to tax. But with an abatement as is given in Notification No.11/2014 dated 11th July, 2014 since the construction of additional building amounts to execution of original works.
In the present case the said taxable service is provided to M/s. Garrison Engineers which admittedly is government authority under Military Engineering Service (MES) As has also been appreciated by Commissioner (Appeals) in para 11.4 of the order under challenge. The onus was on Revenue to prove that service is rendered for commerce purposes. The service is construction of additional building for the government authority. There appears no profit motive with the recipient (M/s. Garrison Engineers). The Notification No.25/2012 dated 20.06.2012 the entry No.12 (c) exempts such services from tax liability if given to Government Department.
The demand of service tax even on the amount of Rs.5,72,590/- is also liable to be set aside. The order under challenge is therefore not sustainable. The same is hereby set aside - appeal allowed.
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2024 (4) TMI 790
Invocation of Extended period of Limitation - Evasion of service tax - taxability - construction of complex service - failure to file proper ST-3 returns - suppression of material facts - Section 78 of the Finance Act, 1994 - HELD THAT:- Applying provisions of Section 73, to the facts of the present case, it is clear that there was no intention on the part of the Respondent to evade payment of service tax. By evasion, it would be meant that the assessee was eluding and avoiding to pay tax by trickery. The intention of the Respondent in the present case was not to escape or to have an intention to default in payment of taxes so as to defeat the rigorous of the taxing provisions. The basic premise in regard to the applicability of the different ingredients namely – fraud, collusion, wilful mis-statement, suppression of facts or contravention of any of the provisions of the said Chapter or of the rules made thereunder, with intent to evade payment of service tax. It would be appropriate to note the jurisprudential understanding of the concept of evasion.
In Tamilnadu Housing Board v/s. Collector of Central Excise, Madras and Another [1994 (9) TMI 69 - SUPREME COURT] the Supreme Court has held that the word “evade” in the context of the Central Excise law would mean defeating the provisions of law of paying duty.
Thus, evasion is one of the basic requirements for applicability of the extended period under the proviso to sub-section (1) and also in regard to applicability of sub-section (4) of Section 73 of the Finance Act, 1994.
It is not in doubt that Respondent, much prior to the issuance of the show cause notice, paid the service tax as also the interest thereon. If this be the case, certainly, the designated officer was not correct in issuing a show cause notice to pass the Order-in-Original. It has been rightly interfered by the Tribunal observing that the department was not justified in invoking the extended period in the present case, and, more particularly, when the entire service tax as also the interest was paid prior to the issuance of the show cause notice, clearly indicating that there was no intention of the Respondent to evade payment of service tax.
There are no merit in the Appeal - appeal dismissed.
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2024 (4) TMI 789
Recovery of erroneous refund - amount paid by the appellant’s Chennai Unit towards the pre-deposit in connection with an appeal filed arising out of order in Tuticorin Central Excise Division with a different Registration Number - whether the amount paid by the appellant from their Head Office Registration can be treated as a pre-deposit or not? - time limitation - HELD THAT:- The appellant was made to file a refund-claim before the Assistant Commissioner of GST and Central Excise, Egmore Division, Chennai who has treated the pre-deposit amount as excess payment of tax and rejected the refund-claim as being hit by limitation in terms of provisions of Section 11B of the Central Excise Act, 1944. The appellant’s contention that the Commissioner (Appeals), Madurai has accepted the above pre-deposit for the purpose of hearing the appeal filed by the appellant has fallen on deaf ears.
The Commissioner (Appeals) has accepted the payment of pre-deposit and decided the appeal on merits. As such, the Department cannot turn back and dispute the nature of payment of pre-deposit while sanctioning the refund-claim. An amount of Rs.4,80,000/- was paid by the appellants in order to avail the remedy of appeal. The nature of payment as a pre-deposit would not undergo any change to become excess payment of tax as contended by the lower Adjudicating Authorities. This contention is totally unjustified and has to be termed as patently illegal. There cannot be any doubt as to the payment made being a pre-deposit may be vide their Head Quarter’s Service Tax Registration at Chennai.
In the case of SUVIDHE LTD. VERSUS UNION OF INDIA [1996 (2) TMI 136 - BOMBAY HIGH COURT] the Hon’ble High Court of Bombay has held that in respect of pre-deposit made under Section 35F of Central Excise Act, 1944, the provisions of Section 11B of Act ibid can never be applicable.
The amount paid by the appellant towards pre-deposit cannot be treated as an excess payment of duty and the provisions of Section 11B of the Central Excise Act, 1944 cannot be made applicable in the facts and circumstances of this case - the appellant is eligible for refund of pre-deposit of Rs.4,80,000/- paid for filing of an appeal under Section 35F of Central Excise Act, 1944.
Appeal allowed.
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2024 (4) TMI 788
Short payment of service tax - assessee’s only contention is that as per section 73 (3) no show cause notice should have been issued with respect to these demands - invocation of Extended period of Limitation - HELD THAT:- The scheme of the service tax requires the assessee to self-assess service tax and file returns as per section 70 of the Finance Act. If the assessee either fails to furnish the service tax return or, having filed the return, fails to assess the tax in accordance with the provisions of the act or rules, section 72 empowers the central excise officer to require the assessee to produce such accounts, documents or other evidences, as he may deem necessary and after taking into account all the relevant materials make the best judgment assessment - The central excise officer may seek any details, which he feel necessary to scrutinize them. The appellant cannot be faulted for not providing any information which it was not required to provide in the ST-3 returns.
The central excise officer is given sufficient time to scrutinize the returns and issue a demand under section 73 within the normal period of limitation. If he fails to do so, and if some short payment is not detected and the demand gets time barred, the responsibility for that rests squarely on the officer who is mandated to scrutinize the returns and not on the assessee. In order to invoke extended period of limitation one of the five elements indicated above need to be established and they cannot be presumed. Similarly, to invoke section 73(4), one of the five elements needs to be established and their presence cannot be presumed.
The Commissioner has erred in issuing a show cause notice covering the amount of Rs. 5,25,39,217/- which was already paid with interest prior to the issue of show cause notice. This payment is squarely covered by section 73(3)of the Finance Act and it is not excluded by virtue of section 73(4). The demand to this extent needs to be set aside.
Service tax payable as reflected in the ST-3 returns but which was not paid during the period 2012-13 and 2013-14 - HELD THAT:- The show cause notice was issued on 10.03.2016. If the service tax was payable as per the return and was not paid even a preliminary scrutiny of the service tax return could have disclosed this fact. As it is already held that the elements for invoking the extended period of limitation were not established in this case the demand of Rs. 6,37,58,915/- on this ground also needs to be set aside.
Penalty u/s 78 - HELD THAT:- The imposition of penalty under section 78 on the assessee also needs to be set aside.
Dropping of demand of Rs. 2,18,35,039/-for the period 2012-13 and 2013-14 under rule 6(3) of CCR - HELD THAT:- The Commissioner examined the returns and the CA certificates and came to the conclusion that the amount under rule 6(3) was correctly reversed. If Revenue wants to contest this finding, it should put forth reasons as to why this finding is wrong. All that is in the Revenue’s appeal and the review order passed by the Committee of Commissioners is that the committee has doubts and, therefore, the Commissioner has committed a grave error. No mistake in the finding of the Commissioner has been pointed out with any evidence whatsoever. Therefore, Revenue’s appeal is without any merit and it deserves to be dismissed.
The assessee’s appeal is allowed and the Revenue’s appeal is dismissed with consequential relief to the assessee.
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2024 (4) TMI 787
Levy of service tax - business support service - making facility to the customers to book online tickets of movies and other shows - HELD THAT:- As per the agreement, card companies were required to reimburse the appellant all the amounts that were being offered by the card companies to their customers through the ticket booking platform. Appellant had entered into agreements with cinema houses for payment of tickets booked through their platform. For booking of tickets through their platform, appellant collected convenience fee and paid service tax on the same. As per the record, appellant has not retained any amount to itself which was received from card companies and which was intended to be paid to cinema houses. The allegation in the proceedings are that the appellant had provided business support service to card companies. It was admitted in the show cause notice that the appellant was not raising any invoice to the card companies. It is very simple in the accounting standards that unless invoice is raised consideration is not collected. Therefore, it is very clear from the record that the appellant was not receiving any consideration from card companies.
By relying on the ruling by Hon’ble Supreme Court in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S EDELWEISS FINANCIAL SERVICES LTD. [2023 (4) TMI 170 - SC ORDER], it is held that the appellant was not providing any service to card companies and, therefore, the impugned order set aside.
The appeal is allowed.
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2024 (4) TMI 786
Classification of service - supply of tangible goods for use service or not - providing the cylinder skid vehicle to the service recipient on charge based on per trip - HELD THAT:- On the identical issue in the appellant own case this Tribunal in UNIVERSAL DISTRIBUTORS VERSUS C.C.E. & S.T. -VADODARA-I [2023 (10) TMI 1382 - CESTAT AHMEDABAD] remanded the matter to the adjudicating authority for passing a fresh order, therefore following judicial discipline no different view can be taken in the present appeal.
Form the above order in the appellant’s own case matter was remanded to the adjudicating authority. Following the same the present matter also deserves remand so that a common view can be taken in all the appeals.
The impugned order is set aside - appeal allowed by way of remand.
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2024 (4) TMI 726
Levy of service tax - Intellectual Property Services - license fees and other incidental expenses paid to the Russian Company i.e. M/s. Rosboronexport, Moscow, Russia towards transfer of technical knowhow and technical assistance for manufacture of aircraft & engines - amount received from the Malaysian company i.e. M/s. Setia Technologi SDN, BHD, Malaysia against repair/rectification of MIG Engines - Reverse Charge Mechanism - suppression of facts - Extended period of Limitation.
Service tax on license fees and other incidental expenses paid to the Russian Company i.e. M/s. Rosboronexport, Moscow, Russia towards transfer of technical knowhow and technical assistance for manufacture of aircraft & engines - HELD THAT:- This Tribunal in the case of M/S. SICPA INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, SILIGURI [2017 (9) TMI 1325 - CESTAT KOLKATA] held that technical knowhow provided by a foreign company to an Indian company under a licence for manufacture of goods for consideration of Royalty equal to a percentage of net sale price of the goods, was nowhere registered / patented in India as an IPR service and therefore, the recipient of such service was not liable to pay Service Tax under RCM as IPR service - the transfer of technology by M/s. Rosboron export would not qualify as “intellectual property right” within the meaning of Section 65(55a) of the Act for the various aspects as listed in paragraph 3.1 of this Order and therefore, would not be covered under the definition of “intellectual property service” within the scope of Section 65(55b).
Amount received from the Malaysian company i.e. M/s. Setia Technologi SDN, BHD, Malaysia against repair/rectification of MIG Engines - HELD THAT:- The activity of repairs and maintenance was carried out within the jurisdiction of India and therefore was liable for tax under Section 65(105)(zzg) as “management, maintenance or repair” service and was liable for payment of duty in terms of Rule 3(1)(ii) of the Export of Services Rules, 2005. The Ld. Commissioner vide the impugned order has categorically held that the provision of service having took place in India, there is a breach of Rule 6A of the Service Tax Rules, 1994 and Rule 3(1)(ii) of the Export of Services Rules, 2005. To this extent, the findings of the Ld. Commissioner on the aspect agreed upon.
Extended period of limitation - Suppression of facts or not - HELD THAT:- There are no merit to impute the charge of suppression to a government organization owned by the Ministry of Defence, for the non-payment of duty / tax with intent to evade the same by suppressing the material information, more so when it is depicted inappropriately and construed accordingly - the demand for the extended period cannot be sustained as there is nothing on record to establish mala-fides on the part of the appellant - the extended period of limitation is not invokable in the circumstances.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 725
Point of Taxation rules - service received from associate enterprises on the taxable value as determined in terms of section 67 of the Finance Act, 1994 - demand made in the present case on the basis of certain provisional entries made by the appellant in their book of accounts, as expenses towards the payments to be made to their associate enterprises, for the services of professionals visiting them - Extended period of Limitation - Penalty - HELD THAT:- By not paying the service tax at the time of making the expense entries in their book of accounts, appellant has failed to pay the service tax at the relevant time, as per Rule 6 (1) of the Service Tax Rules, 1994. Even if it is concluded that appellant have correctly discharged the service tax liability subsequently they are required to pay interest on the delayed payment of the tax as per Section 75 of the Finance Act, 1994.
Extended period of Limitation - HELD THAT:- The submissions made by the appellant to effect that the demand is barred by limitation for the reason that the audit was conducted on various dates between 24.09.2012 to 06.05.2013, so the fact was in the knowledge of the department within the normal limitation period and the show cause has been issued only on 05.10.2015, not agreed upon. Proviso to Section 73 (1) of the Finance Act,1994 provides that extended period of limitation can be invoked if the necessary ingredients as prescribed therein exist. The fact that appellant was making the expense entries in the book of accounts, in case of the receipt of services from the associated enterprises was well in knowledge of the appellant and the provisions of the Section 67 read with Rule 6(1) and Rule 7 of the Point of Taxation Rules, 2011 clearly laid down the manner in which the service tax liability was to be discharged in respect of these entries. By not following the said procedure appellant have sought to short pay the service tax, by suppressing the fact of the said entries in their book of accounts with intent to evade payment of tax at time and in the manner prescribed as per law.
In case of COMMISSIONER OF C. EX., SURAT-I VERSUS NEMINATH FABRICS PVT. LTD. [2010 (4) TMI 631 - GUJARAT HIGH COURT] Hon’ble Gujarat High Court has held The language employed in the proviso to sub-section (1) of Section 11A, is, clear and unambiguous and makes it abundantly clear that moment there is non-levy or short levy etc. of central excise duty with intention to evade payment of duty for any of the reasons specified thereunder, the proviso would come into operation and the period of limitation would stand extended from one year to five years. This is the only requirement of the provision. Once it is found that the ingredients of the proviso are satisfied, all that has to be seen as to what is the relevant date and as to whether the show cause notice has been served within a period of five years therefrom.
Penalty - HELD THAT:- As the invocation of the extended period of limitation as per Section 73 of the Finance Act, 1994 is upheld, the penalty as per Section 78 becomes mandatory as has been held by Hon’ble Apex Court in case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [2009 (5) TMI 15 - SUPREME COURT].
For re-computation of the demand of tax and interest, and the penalties imposable the matter need to be remanded back to the original authority - appeal allowed in part.
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2024 (4) TMI 724
Levy of service tax - Business Auxiliary Services (BAS) - expenses reimbursed to the foreign distributors under reverse charge mechanism - Extended period of limitation - HELD THAT:- Hon’ble Apex Court held in the case of COLLECTOR OF CENTRAL EXCISE, CALCUTTA VERSUS PRADYUMNA STEEL LTD. [1996 (1) TMI 127 - SUPREME COURT] that mere mention of wrong provision of law, when the power exercised is available even though under a different provision is by itself not sufficient to invalidate the exercise of that power. It is found that the show-cause notice was issued alleging that the appellants have not paid the service tax for the various services received by them from their overseas dealers/ distributors and that such services fall under “Business Auxiliary Service”.
It is found that the show-cause notice mentions at Para 7 that the appellants are incurred an expense on account of advertisement for sale promotion which appear to be covered under BAS. Thus, it is seen that in the instant case, the purport of the show-cause notice is to put the appellants on notice that they have received services from their foreign dealers and have not discharged due service tax under the BAS.
Whether the appellants have received services under “Business Auxiliary Services” from their overseas distributor/ dealers and if so whether they are liable to discharge duty on Reverse Charge Mechanism? - HELD THAT:- It is pertinent to note that though, the free repairs during the warranty period are undertaken by the dealer, the customer perceives that the same are provided by the manufacturer of the car. The dealers/ distributors are always associated with the manufacturer. To that extent, it is understood that the dealer/ distributor is performing his work on behalf of or as an agent of the manufacturer in this case, the appellants. Similarly, in advertising, promotion of good-will, overseeing the network of dealers/ distributors, business interest of the manufacturer of the motors is taken care even though the activity aids for his own business promotion. Therefore, the submission of the appellant not agreed upon that the relationship between the appellant and the overseas dealers is on a principal-to-principal basis. As long as the overseas dealers/ distributors are rendering some service on behalf of/ on account of/ in connection with the business of the appellant, they take the role of the manufacturer/ appellant. The overseas dealer/ distributor is receiving a consideration for this purpose. Therefore, there is a force in the argument of the Department that the services rendered are in the nature of BAS.
The Chennai Bench of the Tribunal has gone into an identical issue concerning a similarly placed manufacturer of motor cars, i.e M/S. HYUNDAI MOTOR INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX [2019 (6) TMI 856 - CESTAT CHENNAI], having similar arrangements with the overseas dealers has decided that the overseas dealers/ distributors are rendering services classifiable under BAS to the appellants therein.
It is found that as contended by the learned Authorized Representative for the Department, the exemption under Notification No.12/2003-ST dated 20.06.2003 is admissible only when goods are sold during the course of provision of service; there is documentary evidence in relation to the sale of said goods and if the appellants have not availed CENVAT credit - in the instant case, the gross value of taxable service for the purpose of computation of service tax shall be the gross amount paid by the recipient of such service.
Time Limitation - suppression of facts - HELD THAT:- It is found no case has been made by the Department to show any positive act with an intent to evade payment of duty. It is found that it was held in the case of SUNSHINE STEEL INDUSTRIES VERSUS COMMISSIONER OF CGST, CUSTOMS & CENTRAL EXCISE JODHPUR (RAJ.) [2023 (1) TMI 638 - CESTAT NEW DELHI] upheld by Supreme Court in COMMISSIONER OF CGST CUSTOMS AND CENTRAL EXCISE VERSUS SUNSHINE STEEL INDUSTRIES [2023 (7) TMI 479 - SC ORDER] that extended period cannot be invoked for a demand raised on the basis of audit. Therefore, the extended period cannot be invoked and the demand needs to be sustained only for the normal period. Looking into this background, the imposition of penalties is also not justified in the instant case.
The impugned order is modified to the extent of confirming the demand for the normal period; penalties imposed are set aside; the appeal is partially allowed.
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2024 (4) TMI 723
Recovery of service tax alongwith interest and penalties - Business Auxiliary Service - Business Support Service - agreements with M/s Rathipriya Trading Pvt. Ltd. [presently known as M/s Indiawin Sports Pvt. Ltd., Mumbai (ISPL)] for playing in Indian Premiere League - HELD THAT:- The Tribunal in its judgment, in the case of SOURAV GANGULY VERSUS COMMISSIONER OF SERVICE TAX, KOLKATA (NOW COMMISSIONER OF CENTRAL GOODS & SERVICE TAX & CENTRAL EXCISE, KOLKATA SOUTH) [2020 (12) TMI 534 - CESTAT KOLKATA] has relied on the case of CST, DELHI VERSUS MS. SHRIYA SARAN [2014 (7) TMI 78 - CESTAT NEW DELHI] and the Hon’ble Calcutta High Court’s decision in the case of COMMISSIONER OF SERVICE TAX AND ANR. VERSUS SOURAV GANGULY AND ORS. [2019 (10) TMI 221 - CALCUTTA HIGH COURT] and this judgment has been followed in many other cases.
The Hon’ble High Court of Calcutta held that the remuneration received by the petitioner from the IPL franchisee could not be taxed under business support service.
The issue is no longer res integra - Appeal allowed.
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2024 (4) TMI 685
Condonation of delay of 1776 days in filing the Civil Appeal - Rectification of mistake - mistake apparent of the face of record or not - Refund claim - export of services or not - it was held by High Court that The Tribunal’s order rejecting application of the petitioner to rectify mistake apparent from record in its order cannot be faulted - HELD THAT:- Issue notice on the application for condonation of delay as well as on the Special Leave Petition and the Civil Appeal.
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2024 (4) TMI 684
Maintainability of petition - availability of alternate remedy before the appellate Commissioner under Section 85 of the Finance Act, 1994 - marginal delay in filing the present Writ Petition - HELD THAT:- Since the petitioner has an alternate remedy before the appellate Commissioner under Section 85 of the Finance Act, 1994, I am inclined to dispose of this Writ Petition by giving liberty to the petitioner to file statutory appeal before the appellate Commissioner within a period of 30 days from the date of receipt of a copy of this order subject to the petitioner depositing 20% of the disputed tax considering the delay involved. If such an appeal is filed by the petitioner within 30 days from the date of receipt of a copy of this order together with pre-deposit of 20% i.e., 10% over and above what is contemplated under Section 35-F of the Central Excise Act, 1944, the appeal shall be entertained and disposed by the Commissioner on merits and in accordance with law.
Since the Deputy Commissioner of GST & Central Excise, Madurai I Division, has been arrayed as the sole respondent in this Writ Petition, the Commissioner of CGST & Central Excise, Madurai – I Division, No.5, V.P. Rathinasamy Nadar Road, Bibikulam, Madurai – 625 002, is suo motu impleaded as second respondent in the Writ Petition.
Petition disposed off.
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2024 (4) TMI 683
Scope of SCN - Classification of service - Club or Association services or not - services of licencing the copyrights in musical works to its members who had only paid subscription fee of meager amount and licensing of copyright in musical work - HELD THAT:- The Show-cause cum demand notice lacks clarity about the recipient of the service and the nature of services provided to it allegedly by the appellant.
The nature of service provided by the appellant was stated to be administration of copyrights owned by its members and it is in the nature of facilities or advantages extended to its members. However, going by the factual background, it is noticed that appellant is a company and not a Society registered under Society Registration Act but it collects monthly subscription fee from its members. Apart from this amount no other consideration flows from the members/ copyright owners to the appellant and there is no denial of the fact that entire collection from the membership had never exceeded the threshold prescribed for registration of a Company under Service Tax.
Clause 29A of Article 366 of Constitution of India defines all services associated with sale of goods or lease of the kind as deemed sale and as because Intellectual Property, which in the present case is copyright and other related rights in the nature of performance, play etc. that is not in tangible form, the same may not be included under the definition of services under Section 65B (44 read with Section 66E) but the very fact that Section 65 (55b) that defines “Intellectual Property Services” expressly excludes copyright from the category of Intellectual Property services and there is also no demand against such licence fee/ royalty collected by the appellant from the customers/ users, the order of the Commissioner is unsustainable in both law and facts. Further demand being confirmed against administrative expenditure that was deducted from the membership fee and royalty/ licence fee by a non-profit organization namely assesse, consideration should also be treated as ‘Nil’ for the purpose of taxation.
The order passed by the Commissioner of Service Tax-VI, Mumbai is hereby set aside - Appeal allowed.
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2024 (4) TMI 682
Time limitation - Levy of service tax - Manpower Supply Service - secondment of employees by the Appellant to its associated Foreign Counterpart at Germany on reverse charge mechanism - suppression of facts or not - HELD THAT:- In the present case it could be noticed that show-cause notice was issued on 16.10.2015 up to the end of financial year 2013-2014 during the relevant period and in view of clear provision contained in Section 73(1) read with 73(6), the normal period for making demand through show-cause notice was 18 months from the relevant date and if any fraud, collusion, wilful misstatement, suppression of facts, contravention of any of the provisions of this Chapter or the Rules made thereunder with intent to evade payment of Service Tax is noticed in view of proviso to Section 73(1), Central Excise Officer can served notice for demand that could be extended up to 5 years. This being the statutory provision, the notice of demand being signed on 16.10.2015 and dispatched thereafter cannot be considered to have been sent within 18 months of the end of financial years, up to which demand is made i.e. up to 31st March 2014 - the show-cause notice is not issued in conformity to the law and, therefore, it was required to be quashed before initiation of adjudication proceeding.
Appellant having filed its return for the said period on 25.10.2013, in view of clear provision contained in Section 73(6)(i)(a) wherein it has been mentioned that for the purpose of determination of “relevant date”, periodical return filed on the date showing particulars of Service Tax paid during the period to which return relates would be taken for the purpose of calculation of period of limitation of 18 months, which would end on 25.01.2015 the entire demand is barred by limitation.
The contention made by the Appellant that this appeal is hopelessly barred by the period of limitation, agreed upon, as the entire proceeding is carried out in gross violation of the position of law and deviation in any form from the statutory provision is impermissible.
The order passed by the Principal Commissioner of Central Excise & Service Tax, Pune-I is hereby set aside - Appeal allowed.
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2024 (4) TMI 681
Non-payment of service tax - commercial and industrial construction service - rendering of service even before registering with the department on 11.6.2007, but it had not paid any service tax on such services - non-payment of service tax on some projects/contracts on the ground that they were charitable/educational hospitals or projects - non-payment of service tax on certain residential construction on the ground that they were residential units - collection of some amounts as ‘service tax’ in some of the running bills on these projects, but did not deposit these amounts in the exchequer - non-inclusion of value of materials supplied free of cost by its clients in the value of taxable services - non-payment of service tax at all in respect of the services rendered by it from April 2009 to June 2010.
Demand for the services provided prior to 1.6.2007 are concerned, the demand is under the head ‘commercial and industrial construction service’ - HELD THAT:- During this period, the appellant was not registered with the service tax. From 1.6.2007, the appellant is registered under the head ‘Works Contract Service’ and paid service tax on the service. There is no dispute that the nature of the service was the same both before and after 01.06.2007 - ‘Works Contract Service’ is a contract which involves rendering of service along with transfer or deemed transfer of property in goods. For instance, if a builder constructs a building under a contract including the cost of materials, not only does he render the service but he also transfers the property in the material used such as bricks, steel, cement, etc. while rendering the service. Such services are distinct from contracts for sale of goods or contracts for rendering services and are known to commerce as a separate species of contracts. Such contracts became chargeable to service tax as ‘works contracts service’ w.e.f 1.6.2007 and there was no charge of service tax on such services prior to 01.06.2007 as held by the Supreme Court in COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] - the demand of service tax on works contracts executed prior to 1.6.2007 under the head ‘commercial or industrial construction service’ cannot be sustained.
Demand for the period after 1.6.2007 - suppression of facts or not - time limitation - HELD THAT:- The appellant cannot claim exemption from service tax on the ground that its client was exempted under some provision of income tax. If it wants to claim exemption from service tax, it is its responsibility to show how it was covered by an exemption notification or exemption clause under the provisions of the service tax. Similarly, if it wants to claim exemption from income tax, it has to show how it is exempted under the laws of income tax. However, it is found from Annexure B(1) of the SCN that the amounts which it had received from these three organisations were received clearly beyond the normal period of limitation and hence any demand on this count is hit by limitation.
Construction of residential complexes - HELD THAT:- It is found that the demand for the normal period of limitation was not under “construction of residential complexes” but only under the head of ‘Works Contract Service’ and hence this submission is also irrelevant.
Composition scheme - demand raised on the gross amounts received without any abatement towards the value of the goods - HELD THAT:- The reason for not allowing abatement as recorded in paragraphs 44 and 45 of the impugned order is that the appellant had not opted for payment of service tax under Works Contract Composition scheme. In this factual matrix, when it is undisputed that goods were used in execution of the contracts and the value of the goods is not available, it will not be open to the department to charge service tax on the entire gross amounts received including the value of the good transferred. Service tax cannot be charged on the value of the goods sold or otherwise transferred as a part of the contract. It is found that even if the appellant had not opted for the composition scheme by submitting a letter in writing as required during the relevant period, if it is otherwise eligible for the benefit of the composition, it cannot be denied for the technical fault of not submitting a letter within time. Accordingly, the demand for the normal period of limitation under this head is confirmed allowing abatement under the Composition scheme.
The last submission on merits of the case is that the impugned order confirmed demands on the value of the free materials supplied by the clients of the appellant - HELD THAT:- It is found from the SCN that demands have been made on this account. It has been decided by the larger bench of this Tribunal in M/S BHAYANA BUILDERS (P) LTD. & OTHERS VERSUS CST, DELHI & OTHERS [2013 (9) TMI 294 - CESTAT NEW DELHI-LB] that the value of supplies made free of cost by the service recipient cannot be included in the taxable value for calculating service tax. This decision was upheld by the Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT]. Therefore, the demand on this account needs to be set aside.
Appeal allowed in part.
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2024 (4) TMI 680
Levy of service tax - works contract service - construction of a new building or a civil structure or a part thereof or a pipeline primarily for the purpose of commerce and industry - Boundary wall is a part of the building or is it a civil structure or a part of the building or civil structure? - Extended period of limitation - penalties - HELD THAT:- Admittedly, service tax was payable on the construction of a new building or a civil structure or a part thereof. The appellant’s contention is that boundary wall is not a part of the building nor is it a civil structure. This submission cannot be accepted. A boundary wall is invariably a part of the building or a civil structure. It needs to be noted that service tax was payable not only when the entire building or a civil structure is built but it was also payable when a part of it is built - the submission of the appellant that the boundary wall is not a part of the building and is also not a civil structure, cannot be agreed upon. Therefore, regarding the demand on merits, the issue is decided against appellant.
Extended period of Limitation - Suppression of facts or not - HELD THAT:- During investigation itself, the appellant agreed and paid the service tax. Had the appellant been discharging its obligations and filing ST 3 returns, it would have been the responsibility of the department to scrutinise them with the records and raise a demand. The appellant in this case neither disclosed the rendering of this service nor paid service tax on it nor filed the returns. This qualifies as suppression of facts with intent to evade payment. Therefore, the extended period of limitation was correctly invoked in this case.
Imposition of penalties under section 77 and 78 of the Finance Act - HELD THAT:- Whenever any service tax is not paid by reason of fraud or collusion or wilful misstatement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of service tax, penalty under section 78 can be imposed. In other words, the same elements which make the extended period of limitation invokable also make the assessee liable to penalty under section 78 - Since it is already held against the appellant on the question of extended period of limitation, there are no reason to take a different view with respect to penalty under section 78. Section 77 is a general penalty for offences. Since the appellant had failed to pay self assess service tax correctly and pay it and file returns, we find the penalty of Rs. 10,000 on the appellant under section 77 is also just and fair.
The impugned order is upheld - Appeal dismissed.
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2024 (4) TMI 679
Classification of service - Business Support Service or Renting of immovable property - appellant is an operator of individual or multiple cinemas screen at multiple complexes as owner/lessee having ownership/lease hold rights - HELD THAT:- There is no service as such which has been provided by the appellant to the distributors. The appellant has agreed for exhibiting the distributor’s film without any interference of the said distributors. The distributors had actually granted licence to exhibit the theatrical exihibition rights of the film in the lincesed theatre.
As far as the time and number of shows are concerned, the distributor has agreed for getting share in the Revenue collected from the sale of the tickets that to within 10 days of completion of every week to which it pertains. The agreement clarifies that it is the transfer of copyright by the distributor in favour of the appellant to the exclusion of all including the owner of the said copyright.
The issue is otherwise no more res-integra. Various decisions have clarified that Revenue sharing arrangement in itself does not necessarily imply provision of service, unless service provider and service recipient relationship is established - reliance can be placed in DELHI INTERNATIONAL AIRPORT P. LTD. & MUMBAI INTERNATIONAL AIRPORT P. LTD. VERSUS UNION OF INDIA & ORS. [2017 (2) TMI 775 - DELHI HIGH COURT] - there is otherwise nothing on record to establish the said relationship.
There are no reason to differ with the findings arrived at in the Order-in-Appeal, the same is accordingly upheld - appeal of Revenue dismissed.
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