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Service Tax - Case Laws

Showing 121 to 140 of 31533 Records

• 2025 (6) TMI 1266
  

  Levy of service tax - manpower supply service - consideration received as driver’s salary and bhatta - HELD THAT:- It is evident from the agreement entered into by the appellant with their client, the appellant is obliged to carry out the activities including providing and maintaining vehicles as per the conditions specified in the contract. Fact being so, the said agreement cannot be bifurcated to ascertain the element of manpower in the said agreement.

  As per the judgment of the Hon’ble Supreme Court in the matter of DLF Universal Ltd. [2010 (11) TMI 1086 - SUPREME COURT], their Lordships observed 'The purpose of a contract is the interests, objectives, values, policy that the contract is designed to actualise. It comprises the joint intent of the parties. Every such contract expresses the autonomy of the contractual parties private will. It creates reasonable, legally protected expectations between the parties and reliance on its results. Consistent with the character of purposive interpretation, the court is required to determine the ultimate purpose of a contract primarily by the joint intent of the parties at the time the contract so formed. It is not the intent of a single party; it is the joint intent of both the parties and the joint intent of the parties is to be discovered from the entirety of the contract and the circumstances surrounding its formation.'

  Conclusion - The activities cannot be bifurcated to confirm demand under ‘Manpower Recruitment or Supply Agency Service’.

  The impugned order is set aside - appeal allowed.

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• 2025 (6) TMI 1265
  

  Refund of CENVAT credit arising out of service tax paid 30.01.2018 - sub-sections (3) of Section 142of the CGST Act, 2017 read with Section 11B of the Central Excise Act, 1944 - principles of unjust enrichment - HELD THAT:- From the facts of the case, it is seen that the appellants had duly followed the procedure and conditions prescribed in complying with the obligations in payment of service tax on 30.01.2018, for which refund application was filed on 31.12.2018 with the department. In terms of legal provisions prescribing the procedure for transitional credit under Section 142(9)(b) of the CGST Act, 2017, when the same is unable to be utilized for further payment of duty/tax, the appellants had applied for refund before the departmental authorities.

  The main ground on which the refund application of the appellants was held as not entertainable in the impugned order is, that there exists no provision for cash refund of CENVAT credit and therefore the refund in terms of proviso (c) to Section 11B(2) ibid, is not permissible in the case of the appellants. In this regard, it is found that the provisions of Sections 142(3) of CGST Act, 2017 is a transitional arrangement wherein it has been specifically provided that such provisions apply as a non-obstanate clause whereby such provisions will have overriding effect, if anything to the contrary is contained under the provisions of existing law i.e., Central Excise Act, 1944, except for the provisions of sub-section (2) of section 11B ibid. Thus, all the conditions of the requirements of Section 11B ibid as it remained under the existing law, other than those relating to Unjust Enrichment clause contained in Section 11B(2) ibid would apply, only if they are not contradictory to the provisions of Section 142(9)(b) of the CGST Act, 2017, in dealing with refund of ‘CENVAT credit’.

  Further, upon introduction of GST regime, the transitional arrangements have been provided under Section 142 of CGST Act, to enable the CENVAT credit, if refundable, to be paid in cash to the eligible persons, as there was no way that such excess CENVAT credit could be used by the assessee in payment of tax on output service or duty on final products. It is also found that the proviso (c) to Section 11B(2) ibid, cannot be read to state that refund of such excess CENVAT credit has not been provided under Rule 5 of the CCR, as the entire arrangement of refund of excess CENVAT credit is arising as a transitional arrangement by moving from Excise duty/Service Tax regime to GST regime.

  It is reasonable to conclude that when the Central Excise Act, 1944 amongst other laws relating to old tax regime was repealed by Section 174 of the CGST Act, 2017 and that the CCR is also being superseded vide Notification No.20/2017-C.E. (N.T.) dated 30.06.2017, by the Central Government for smooth implementation of transfer to GST regime in indirect taxation, it is found that the provisions of Section 142 of the CGST Act, 2017 are sufficient to provide for the tax administration for sanction of cash refund in circumstances stated therein, and it is found that there is no need and it is not legally feasible to make any specific provision in CENVAT statute itself, for enabling cash refund of excess CENVAT credit relating to earlier regime while moving to the new GST regime.

  In the case of Dhyan Networks and Technologies Pvt. Ltd. Vs. Commissioner of GST and Central Excise, Chennai [2022 (10) TMI 1009 - CESTAT CHENNAI], the Tribunal has held that cash refund is required to be given to the assessees in terms of Section 142 of the CGST Act, 2017.

  Conclusion - There are no merits in the impugned order passed by the learned Commissioner (Appeals) to the extent it has rejected the refund of service tax paid as CENVAT credit, which is contrary to the legal provisions of Section 142(3) of the CGST Act, 2017 and thus, it does not stand the scrutiny of law. Therefore, by setting aside the impugned order dated 30.09.2019, the appeal is allowed in favour of the appellants, with consequential relief, with respect to refund of excess CENVAT credit of Rs.12,86,186/- payable to the appellants.

  The impugned order is set aside - the appeal filed by the appellants is allowed by way of refund of Rs.12,86,186/-, as per law.

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• 2025 (6) TMI 1264
  

  Exemption from service tax - Construction Service other than residential complex, including commercial / industrial buildings or civil Structures, provided to developers / units of Special Economic Zones (SEZ) - non-production of Form A-1 and Form A-2 - non-fulfilment of conditions prescribed in the notifications issued by the department under the Customs/Central Excise/Finance Acts - applicability of N/N. 04/2004-S.T. dated 31.03.2004 as amended N/N. 09/2009-S.T. dated 03.03.2009, N/N.17/2011-S.T. dated 01.03.2011 - HELD THAT:- Chapter X-A providing for special provisions relating to SEZ were omitted or removed from the Customs Act, 1962 consequent to the Parliament enacting a special legislation viz., SEZ Act, 2005. Moreover, in order to provide more clarity and purpose of such separate legislation for SEZ, a specific Section 51 of the said Act of 2005 has provided a non obstante clause stating that the provisions of SEZ Act, 2005 shall have the overriding effect, notwithstanding anything inconsistent therewith, if any, contained in any other law for the time being in force. Thus, if an exemption is provided under Section 26 of the SEZ Act, 2005, then the same cannot be taken away by prescribing certain conditions elsewhere in any other law or notification issued thereunder, which is contrary to the legal provisions made therein.

  The dispute in respect of similar issue relating to exemption from payment of service tax in respect of services provided to SEZ have been dealt with in the case of GMR Aerospace Engineering Limited [2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT] by the Hon’ble Andhra Pradesh High Court by holding that standalone exemptions under Section SEZ law are not subject to provisions of any other law, including Finance Act, 1994, and therefore such exemption cannot be denied for mere non-filing forms, as these are not required under SEZ law.

  The Co-ordinate Bench of the Tribunal in the case of Cummins Turbo Technology [2023 (11) TMI 1077 - CESTAT NEW DELHI] have held that there is no legal authority to levy and collect central excise duty, customs duty or service tax for goods or services supplied for authorised operations of SEZ developers and units covered by Section 26 of the SEZ Act, 2005. Without such legal authority, no tax or duty can be either levied or collected in view of Article 265 of Constitution of India, 1950. Therefore, the Tribunal have held that there is no need for exemption notifications under Central Excise Act, 1944, Customs Act, 1962 and Finance Act, 1994, nor is it necessary to fulfil of conditions under exemption notifications, if any, issued.

  Tribunal in the case of Eclerx Services Ltd. [2022 (9) TMI 166 - CESTAT MUMBAI] have held that SEZ unit was eligible for exemption from service tax on services received by it and in view of the overriding effect of SEZ law, denial of exemption on the grounds of procedural infirmities is not sustainable.

  Conclusion - The exemption benefits extended to taxable services provided to SEZ under Section 26 of the Special Economic Zones Act, 2005 cannot be denied on the ground that certain procedures have not been followed or certain conditions prescribed in the notification have not been fulfilled.

  The impugned order is liable to be set aside to the extent it had confirmed the adjudged demands proposed in the SCNs - Appeal allowed.

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• 2025 (6) TMI 1176
  

  Classification of services - GTA services or Supply of Tangible Goods Service? - invocation of extended period of limitation - levy of penalty - HELD THAT:- The Appellant’s business is mainly transporting goods by road and the consideration is computed on per KM basis though many other conditions mentioned as to the computation of value of payable. These Contracts / Work Orders clearly specifies that service tax is to be paid by the service recipient who is paying freight i.e., the consignor as per Rule 2(1)(d)(v) of Service Tax Rules, 1994. The Appellant has been mandated to comply with various conditions as to the operation and maintenance of these RMC vehicles, compliance to central and state laws relating to Insurance, PF, etc., and also for exclusive usage of these vehicles - It is seen that all the incorporate required details of a consignment note like the details of vehicles, consideration payable, kilo meters run, etc., though not issued per consignment basis.

  Further, it is noted that the Tribunal Delhi and also the Tribunal Ahmedabad in the cases of Gunesh Logistics Vs. Commissioner of Central Excise & Service Tax, Jaipur-I [2019 (9) TMI 1419 - CESTAT NEW DELHI] and in Prashant Logistics Vs. C.S.T., Vadodara-I [2023 (12) TMI 566 - CESTAT AHMEDABAD] has analyzed the contracts entered into for transportation of RMC and held the service activity as classifiable under GTA service and not Supply of Tangible Goods.

  Even, in the present appeal, RMC trucks were exclusively used by the Appellant to provide transportation service and not the supply of tangible goods service. These trucks have been used by the Appellant themselves, and the consideration was computed principally on KM basis, though other miscellaneous charges are also included. These vehicles are always under the control and possession of the Appellant and insistence on complying to various Central and State Government laws and other conditions would not alter the nature of service provided. It is to be noted that the RMC companies have paid service tax applicable on reverse charge basis. Demand of service tax again under Supply of Tangible Goods Service would result in double taxation - The Appellant has used these vehicles and not the RMC companies for providing transportation service. Though the facts obtaining in appeal are different in certain aspects, when compared against the case laws relied upon, appropriate classification of the service is under GTA service.

  The nature of the service rendered is transportation of RMC and as such, the demand of service tax as made under Supply of Tangible Goods in the impugned Order-in- Original No. 16/2014 (ST-COMMR.) dated 25.11.2014 is not sustainable.

  Supply of concrete pumps - HELD THAT:- It is to be noted that there is a clause specifically mentioning that the service tax is payable by the Appellant. The Agreement is for pumping of concrete and not for transportation of concrete pump from one site to the other. Consideration is paid on the basis of the quantity of concrete pumped. Here there is no transportation of goods from one place to other like in case of ready-mix concrete. These pumps are used either at the LAC’s plant or at various work sites and as such the demand raised in respect of concrete pumps is required to be confirmed under the supply of tangible goods service.

  Extended period of limitation - HELD THAT:- It is to be observed that the classification of the service provided by the Appellant is highly contentious. The work orders issued by LAC clearly indicate that the service tax will be paid by RMC companies. The Appellant is basically a transporter of goods as such, attributing any motive to evade payment of tax on the part of the Appellant is not tenable as held by the Hon’le Supreme Court in the cases of Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur [2013 (1) TMI 616 - SUPREME COURT] and CC Vs. Magus Metals Pvt. Ltd. [2017 (11) TMI 53 - SUPREME COURT]. Whatever the service tax paid / payable is available as Cenvat credit for the RMC companies. For these reasons, invoking extended period is not justified.

  Conclusion - The Lower Authority is directed to examine the records of the Appellant and quantify the service tax payable for the normal period on the consideration / hiring charges paid by the RMC companies to the Appellant in respect of concrete pumps. It need not be stated that the Appellant is required to pay interest along with service tax payable. However, the penalties imposed are set aside.

  Appeal allowed in part.

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• 2025 (6) TMI 1175
  

  Substitution of the present Respondent with the jurisdictional Commissioner - Departmental appeal should be dismissed as deemed withdrawn pursuant to the Assessee's settlement under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 or not - HELD THAT:- Admittedly Section 123(A)(2) clearly stipulate that in case of pendency of appeal by the declarant and by the Department, sum of the amount of the duty being disputed by both would be taken together for determination of tax dues. Objection of the Department to such Miscellaneous Application is that only, the exact amount dropped i.e. ₹3,93,16,150/- was taken into consideration while filing declaration under the scheme by the Assessee-Appellant but not the non-quantifiable other liabilities, which had no reference in the appeal memo but subsequently computed by the Respondent-Department as ₹20,52,53,792/- (inclusive of the quantified one).

  In the instant case, neither Respondent-Department had raised any objection to such declaration that unascertained amount was not included nor the Designated Committee had preferred to make an upward revision of the disputed amount. This being so, after issue of discharge certificate in respect of declaration made for both the appeals, Section 129 brings the matter into a conclusive stage, against which no further proceedings should continue.

  Both the appeals filed by Assessee-Appellant and the Departmental appeal would follow the fate as explained in CBIC Circular No. 1072/05/2019-CX dated 25.09.2019.

  Conclusion - i) SVLDRS Scheme contemplates simultaneous withdrawal of both declarant and departmental appeals upon settlement, thereby ensuring comprehensive closure of legacy disputes. ii) The issuance of the discharge certificate under the Scheme precludes any further adjudicatory proceedings, and both the Assessee's and Department's appeals must be treated as withdrawn or dismissed accordingly.

  The Departmental appeal is dismissed as deemed withdrawn and Assessee-Appellant’s appeal as withdrawn, as has been settled under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - application allowed.

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• 2025 (6) TMI 1174
  

  Classification of services - Manpower Recruitment Agency and Supply Service or not - Storage and Warehousing and Cleaning Service - applicability of benefit under Sub-section (3) of Section 73 of the Finance Act, 1994 - HELD THAT:- In view of the fact that the show cause proceedings were issued only on the basis of the figure reflected in the Form 26AS visà- vis the ST-3 Returns filed by the appellants, it is opined that the proper tax liability cannot be determined only based on the comparison between the two statements, without referring to the factual aspect regarding actual provision of the taxable service, whether should be classifiable under ‘manpower recruitment’, as claimed by the appellants or, under the taxable category of Storage and Warehousing’ and ‘Cleaning Service’, as asserted by the department in the impugned proceedings.

  Assuming that the appellants contention is correct that they had already deposited the entire service tax amount, then, the benefit of sub-section (3) of Section 73 of the Act of 1994 should be available, for non-initiation of any proceedings for recovery of the tax, interest as well as the penalty amount confirmed in the impugned order. Therefore, the matter is required to be again looked into by the original authority in its proper perspective, to find out whether the adjudged demand can be confirmed on the appellants or otherwise.

  Conclusion - The adjudicating authority failed to properly consider the appellants' evidence and submissions regarding discharge of tax liability and that this issue required fresh examination.

  The impugned order is set aside and the appeal is allowed by way of remand to the original authority for deciding the matter afresh - Appeal allowed by way of remand.

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• 2025 (6) TMI 1173
  

  Classification of service - Works Contract Service or not - appellants were not discharging service tax on the services rendered by them during the disputed period from 15.10.2004 to 31.01.2007 and the returns for this period were filed on 05.05.2007 - invocation of extended period of limitation - HELD THAT:- It is an admitted fact that appellant had carried out activities under composite contract and as per the findings in the impugned order at para 4, the adjudicating authority has observed that appellant had received gross amount for providing service and it is inclusive of cost of material which were used by the service provider in rendering the said services. It is further observed that M/s. Karnataka Power Corporation, Bellary are the receiver of the service provided by the appellant, which is a commerical public sector undertaking managed by Government of Karnataka for supply of electricity to its consumers and due to that reason adjudicating authority held that the said activities of work are liable to be covered under the category of ‘Commerical or Industrial Construction service’ as per Section 65(25b)(a) of the Finance Act, 1994.

  Though the issue at the relevant time was not settled and after considering the issue in detail in the matter of CCE vs. Larsen & Toubro Ltd. and Ors. [2015 (8) TMI 749 - SUPREME COURT], Hon’ble Surpeme Court held that such activity cannot be considered under any other classification other than the classification under ‘works contract service’. Since levy of service is under ‘works contract service’ is effected only from 01.06.2007, such composite contract is not classifiable under the category of ‘Commerical or Industrial Construction Service’.

  Conclusion - Composite contracts involving both goods and services are taxable under 'Works Contract Service' only from 01.06.2007, and prior demands under other service categories for such contracts are invalid.

  The impugend order confirming the demand for the period from 15.10.2004 to 31.01.2007 is unsustainable - Appeal allowed.

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• 2025 (6) TMI 1172
  

  Liability of appellant to pay service tax - appellant who had provided their premises on rent is liable to pay service tax on the rent received by them or not - HELD THAT:- As per the impugned order, the adjudicating authority admits that the appellant is a religious body and as per the statutory provisions, such religious bodies are exempted from payment of service tax. Considering the ratio of the decisions relied upon by the appellant, he is not liable to pay service tax on the rent received by them.

  The impugned order is set aside and the appeal is allowed.

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• 2025 (6) TMI 1171
  

  Levy of service tax - terminalling charges collected by the appellant - period involved is from 2011-2012 to September-2014 - HELD THAT:- In view of the stated position which has been checked from the field unit in the appellant’s own case, the same issue was raised and terminalling charges were dropped by the adjudicating authority. The matter was not carried forward in appeal despite there being no bar of revenue implication. This court is inclined to allow the benefit to the appellant as the terminalling charges are nothing but part of the cost component of excisable goods and having been incurred in loading and unloading goods within the factory. Therefore, being a part of the cost and hence, part of the transaction value same cannot be considered as being a separate service. Therefore, the service tax, per se cannot be demanded from the appellant.

  Appeal allowed.

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• 2025 (6) TMI 1170
  

  Levy of service tax - Business Auxiliary Service - incentives received from airliners/shipping lines are liable to service tax under the category of Business Auxiliary Services and collection charges recovered from the customers - Service tax on commission received by the appellant.

  Levy of service tax - Business Auxiliary Service - incentives received from airliners/shipping lines are liable to service tax under the category of Business Auxiliary Services and collection charges recovered from the customers - HELD THAT:- This issue has been considered by this Tribunal in the matter of Freightlinks International (India) Pvt. Ltd. [2025 (2) TMI 315 - CESTAT BANGALORE], it is held that such margin earned on sale of space is business and cannot be called as a service at all. Thus, the profit earned from such business cannot be considered as a service.

  Similar view was upheld by this Tribunal in large number of cases including the case of M/s. Freightlinks International (India) Pvt. Ltd. [2024 (10) TMI 1629 - CESTAT BANGALORE]. Following the ratio in the above decisions, the demand against incentives under Business Auxiliary Service and the demand against commission charges under Business Support Service are unsustainable.

  Service tax on commission received by the appellant - HELD THAT:- Since the appellant had admitted and paid service tax along with interest and the adjudicating authority has appropriated the same, the same is upheld.

  Conclusion - i) The demand of service tax on incentives received from airlines under Business Auxiliary Service is unsustainable and set aside. ii) The demand on additional amounts retained under Business Support Service is unsustainable and set aside. iii) The admitted service tax on commission received is upheld.

  The appeal is partially allowed.

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• 2025 (6) TMI 1169
  

  Non-maintainability owing to delay in filing of appeal beyond the period prescribed in section 86 of Finance Act, 1994 - failure to comply with the requirement of pre-deposit stipulated in section 35F of Central Excise Act, 1944, as made applicable under section 83 thereof to Finance Act, 1994 - HELD THAT:- The appeal has not been disposed off on merits but dismissed at the threshold on two counts, viz., for failing to make the prescribed pre-deposit and for not having filed the appeal within the period stipulated in Finance Act, 1994.

  Insofar as the first of the deficiencies is concerned, the appellant has, since, made the pre-deposit to have appeal admitted in the Tribunal. Accordingly, that deficiency has ceased to exist even insofar as the first appellate authority is concerned.

  The appellant has placed on record therein request for the order and its receipt on 28th August 2023. In the light of the finding supra, and the submission of the documents, it appears that dismissal of the appeal without offering an opportunity to the appellant herein for submission of the relevant of documents was inappropriate.

  Matter remanded back to the first appellate authority to determine the issue on merits after examining the claim made by the appellant on compliance with time-lines prescribed in section 86 of Finance Act, 1994 - appeal allowed by way of remand.

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• 2025 (6) TMI 1168
  

  Levy of service tax - banking and other financial services - service provided by the Appellant as collection charges and other related services - Jurisdictional issue - classification of services - Transactions whether amounts to service and its value (consideration) - Determination of rate of duty - Taxability on liquidity facility service.

  Jurisdiction - legality of issue of SCN as Commissioner Service Tax, Mumbai-I without a formal appointment/notification of the CBEC appointing him as Central Excise Officer in terms of Rule, 3 of the Service Tax Rules, 1994 - HELD THAT:- Reliance placed in the case of Standard Chartered Bank and Others Vs. Commissioner of Service Tax [2013 (7) TMI 240 - CESTAT MUMBAI] in which it has been held that inherent power was available with him to issue show-cause notice. In the grounds of appeal, Assessee- Appellant only stated that inherent power theory is questionable and specific jurisdiction has to be assigned to him to assume jurisdiction for issue of show-cause notice but neither party argued on this issue of jurisdiction with respect to any justifiable ground as to why precedent decision of Tribunal is not to be followed on the issue that was preliminary in nature and therefore, it would go by the Principal Commissioner’s order that relied on the CESTAT’s decision that Commissioner of Service Tax has inherent jurisdiction as Central Excise Officer to issue show-cause notice.

  Classification - collection charges and related services - fall under banking and other financial services or otherwise? - HELD THAT:- As could be noticed, Respondent had classified the service under “Banking and Other Financial Services” that was brought into the purview of service tax by way of amendment made in to the Finance Act in 2007 under Section 65(12) of the said Act, in which cash management service, which was specifically excluded from the scope of banking and financial services, were deleted and the resultant effect runs with the clarification issued by the CBEC explaining changes proposed in the Financial Bill, 2007, justifying applicability of Service Tax on ‘Cash Management Services’ in which collection of receivables, execution of payments, management of liquidity and providing customised Management Information System (MIS) reports etc. were included as ‘service’ rendered by banks to its corporate clients. This clarification since issued prior to passing of the said Amended Act, would go to justify that collection of receivables is a service covered under ‘banking and other financial services’, though such collection can also be treated as ‘collection agency service’ that was defined under “Business Auxiliary Service” but since in the present case Appellant itself is a non-banking financial company, classification made in respect of such service of collection of receivable etc. rendered by Appellant would fall in the category of ‘banking and other financial services’, for which it is concurred with the findings of the Commissioner regarding classification of service rendered by Appellant.

  Transactions whether amounts to service and its value (consideration) - HELD THAT:- The collection of money/receivables that is been done by Appellant is independent of the transactions concerning assignment which Appellant can collect or any other Agent appointed thought ‘Collection Agency Agreement’ may also collect and since it is a non-banking financial institution confirmation of demand for such payment of Service Tax under banking and other financial services is held to be a valid demand. The case law of Commissioner of CGST & Central Excise, Mumbai East Vs. Edelweiss Financial Services Ltd. [2022 (2) TMI 1359 - CESTAT MUMBAI] on which Appellant has placed heavy reliance, since deals with issue “service without payment of consideration” has no application to this appeal.

  Determination of rate of duty - HELD THAT:- Both show-cause notice and adjudication order had proposed and determined the rate of duty on the basis of Rule, 3 of the Service Tax (Determination of Value) Rules, 2006 and best judgement method prescribed under Section 72 of the Finance Act, 1994. Appellant objects the same on the ground that Rule, 3, before it had undergone amendment w.e.f. 01.07.2012 including consideration received which are not ascertainable by wholly or partly consisting of money and no money, would not be applicable to the Appellant for the disputed period commencing from 2008 and in any event Best Judgment method as provided under Section 72 of the Finance Act, 1994 was arbitrarily used in taking just average of the percentage of principal outstanding that would vary between ‘nil’ and 2% of the outstanding principal receivable - It would be, worth mentioning, that Appellant’s own request made for valuation on the basis of weightage average can’t be ignored for the reason that when Assessee’s assessment is to be rejected, the Assessing Officer can put-forth his / her own assessment.

  It would also be worthwhile to record his answer in accepting part of the request made by the Assessee that relates to weightage average but non-acceptance of their views in respect of taking average for the entire transaction period covering more than 5 years and accepting only last available transaction amount towards collection charges for the extended period - this is the best way to put an end to the litigation in re-calculating the entire value again from nemours transactions that had taken place during the period.

  Taxability on liquidity facility service - HELD THAT:- The fixed deposit or bank guarantee which were allegedly made by the Appellant to secure the receivables of the Appellant are just a kind of guarantee only and there is no data available as to if in any specific month, such facility has been utilised and more importantly in all incidents, collection agent and liquidity facility provider were one and same, to which effect no input is available. It is not inclined to interfere with the order passed by the Commissioner in not confirming Service Tax on liquidity facility but the reasoning available in this order that payment made against extension of liquidity facility is taken from the same amount collected by the Appellant is not proper as only from the surplus available with the Appellant is being Taxed, in which deduction of proportionate amount towards liquidity facility, if availed has also been taken into consideration.

  Conclusion - i) The Principal Commissioner's jurisdiction to issue the notices and adjudicate the matter upheld. ii) The collection of receivables by a non-banking financial company falls within "banking and other financial services" rather than "collection agency services." iii) The appellant's collection charges were either explicitly invoiced or embedded in the purchase consideration (yield spread), thereby constituting consideration for taxable services. iv) Valuation of taxable services under Rule 3 of the Service Tax (Determination of Value) Rules, 2006 and best judgment assessment under Section 72 of the Finance Act, 1994, applied on a weighted average basis for each financial year, represents a reasonable and just method for determining service tax liability over multiple transactions and years. v) It is not inclined to interfere with the order passed by the Commissioner in not confirming Service Tax on liquidity facility but the reasoning available in this order that payment made against extension of liquidity facility is taken from the same amount collected by the Appellant is not proper as only from the surplus available with the Appellant is being Taxed, in which deduction of proportionate amount towards liquidity facility, if availed has also been taken into consideration.

  Both the appellant's and the Revenue's appeals are dismissed.

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• 2025 (6) TMI 1167
  

  Taxability - banking and financial services - upfront fee charged by an international financial institution, specifically the Asian Development Bank (ADB), on an external commercial borrowing (ECB) loan availed by the appellant - HELD THAT:- The decision of Tribunal, in re Coastal Gujarat Power Ltd [2016 (12) TMI 229 - CESTAT MUMBAI], concurring a dispute caused by like charges incurred in availing ‘external commercial borrowing (ECB)’ from the International Finance Corporation (IFC) and the Asian Development Bank (ADB), held that section 66A of Finance Act, 1994 was enacted to substitute for ‘provider of service’ by deeming the ‘recipient of the service’ as surrogate owing to amorphousness of supplier of service arising from ‘provider’ and ‘recipient’ having to be in the territory of India to conform to ‘taxable service’ leviable to tax under section 66 of Finance Act, 1994. It was further held that such contingency did not arise when such person is legislatively acknowledged in much the same way as any other artificial person, by operation of law, and, consequently, immunity from tax conferred on these entities would operate to extinguish tax liability under section 66 of Finance Act, 1994.

  Conclusion - The services provided by ADB are exempt from service tax by virtue of their immunity under international agreements and domestic legislation, and that the recipient cannot be taxed under section 66A.

  The impugned order is set aside and appeal allowed.

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• 2025 (6) TMI 1095
  

  Refusal to exercise the power under Section 85 of the Finance Act, 1994 by condoning delay - time limitation - invocation of extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India - HELD THAT:- On perusal of order dated 23.12.2024 passed in appeal, it surfaced that the Order-in-Original dated 09.04.2024 was served on the Petitioner on 12.04.2024. Thus, the period of limitation is to be reckoned from the next date, i.e., 13.04.2024.

  The last date for presenting the appeal within the specified period of two months from this date (13.04.2024) would fall on 12.06.2024 and the condonable period of one month would lapse on 12.07.2024. Concededly by counsel both the parties, the appeal was presented on 12.07.2024. It is, therefore, abundantly clear that the Appellate Authority has misguided himself and his approach in computation of period of limitation is tainted. The Appellate Order dated 23.12.2024 is faulted with in view of Section 85(3A) of the Finance Act, 1994 read with Section 12 of the Limitation Act, 1963 and Section 9 read with Section 3(35) of the General Clauses Act, 1897.

  The Appellate Authority has not borne in mind the purport of Section 3(35) read with sub-section (9) of the General Clause Act, 1897, Section 12 of the Limitation Act. Therefore, the conclusion arrived at by the Appellate Authority vide Order dated 23.12.2024 is faulted with.

  Conclusion - Having thus demonstrated the legal aspect of calculation of period of limitation as envisaged under Section 85(3A) of the Finance Act, 1994, this Court is inclined to interfere with the Order dated 23.12.2024 passed by the Commissioner (Appeals), Bhubaneswar and, having held that the Commissioner (Appeals) has the competence to deal with the proviso to sub-section (3A) of Section 85 of the Finance Act, 1994, on the facts and in the circumstances of the case, the said order is liable to be set aside.

  The Order-in-Appeal dated 23.12.2024 passed by the Commissioner (Appeals), Bhubaneswar is set aside and the matter is remitted to the Appellate Authority to exercise his conscientious discretion as conferred under Section 85(3A) of the Finance Act, 1994 and adjudicate the matter with respect to limitation afresh - Petition disposed off by way of remand.

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• 2025 (6) TMI 1094
  

  Maintainability of appeal - appellant's mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 was disputed - DRC-03 can be used for payment of pre-deposit for compliance of the provisions of the said Section 35F or not - HELD THAT:- The learned Commissioner (Appeals) has not decided the appeal before him on merit and held that the appeal before him was not maintainable for non-compliance of the provisions of the said Section 35F, even when 7.5% of the adjudged dues was paid through debit into electronic credit ledger on 04.06.2021.

  Hon’ble Bombay High Court has affirmed the interim order dated 07.07.2023 passed by this Tribunal in the case of Saphire Cables and Services Pvt. Ltd. [2023 (7) TMI 544 - CESTAT MUMBAI]. This Tribunal in the said interim order has held that if debit is made in electronic credit ledger, i.e. DRC-03, before 28.10.2022 towards payment of pre-deposit under the said Section 35F, then such debit is valid and it is to be concluded that the provisions of the said Section 35F have been complied with.

  Conclusion - It is noted that in the present case the debit was made on 04.06.2021. Therefore, the appellant had made mandatory pre-deposit as required under the said Section 35F. The impugned order set aside and the matter is remanded to learned Commissioner (Appeals) to decide the appeal before him on merit.

  The appeal is allowed by way of remand after setting aside the impugned order.

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• 2025 (6) TMI 1093
  

  Levy of service tax - Sponsorship Services - it is alleged that the appellant had made payments to various companies towards sponsorship in respect of Indian Premier League (IPL) T20 Tournament during the period 2010-11 and not paid service tax under the category of ‘Sponsorship Services’.

  Demands for the period prior to 01.07.2010 - HELD THAT:- It is an admitted fact that the appellants are sponsoring IPL teams through the team owner companies for which agreements were entered between them.

  In view of the definition of Sponsorship Services, the entire demand confirmed by the adjudicating authority against the appellant for the services rendered by M/s. Royal Challengers Sports Pvt. Ltd. are exempted since the activities are carried out prior to 01.07.2010. This Tribunal in the matter of Hero Motocorp Limited [2013 (6) TMI 447 - CESTAT NEW DELHI] held that the sponsorship of IPL team would amount to sponsoring the sport event and it is fully covered by the exclusion provision of definition of ‘Sponsorship Service’. This decision was upheld by the Hon’ble Supreme Court in [2015 (7) TMI 1163 - SC ORDER] and their Lordships had observed that 'The appellate Tribunal in its impugned order had held that several rights accuring to appellant under sponsorship agreement with GMR owner of Delhi Daredevi team clearly indicates that sponsorship of team is in relation to participation in IPL T-20 Cricket Tournament. This agreement, is a clear commercial transaction and is for sponsorship of T-20 sport event and not owner of Delhi Daredevils or BCCI-IPL. Accordingly, agreement falls within exclusionary clause of Section 65(105)(zzzn) of Finance Act, 1994 and appellants are not liable to pay Service Tax.'

  Hence, the demands for the period prior to 01.07.2010 are unsustainable.

  Demands raised for the services rendered prior to 01.07.2010 but payments received after 01.07.2010 - HELD THAT:- With regard to demands raised for the services rendered prior to 01.07.2010 but payments received after 01.07.2010, are not taxable in terms of 2nd proviso to subrule (1) of Rule 6 Service Tax Rules, 1994 - Hence, the demands made under Sl.No.3 and 8 of Annexure – 1 of show-cause notice with respect to (i) Bill No.KRSTL/2010-11/USL4 dated 12.07.2010 issued by IPL Team, Knight Raiders to the appellant and (ii) Bill No.13/DCSVL/2010 dated 24.07.2010 issued by IPL Team, Decan Chargers, are set aside since the last match was concluded on 25.04.2010 i.e., services were rendered prior to 01.07.2010.

  Demand confirmed for the services rendered after 01.07.2010 - HELD THAT:- It is evident that the appellant had discharged duty liability with interest before issue of show-cause notice and this fact has been reflected in their ST-3 returns. This demand is confirmed as the services were rendered after 01.07.2010.

  Levy of penalty - HELD THAT:- Considering the fact that the appellant had paid the said amount before issuance of show-cause notice, penalty imposed by the adjudicating authority is unsustainable.

  Conclusion - i) Demands for sponsorship services rendered prior to 01.07.2010 are set aside as unsustainable. ii) Demands relating to services rendered before 01.07.2010 but paid after that date are also set aside. iii) Demand for services rendered after 01.07.2010 was upheld since tax was payable; however, penalty was quashed due to pre-show-cause payment.

  Appeal allowed in part.

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• 2025 (6) TMI 1092
  

  Refund of unutilized Cenvat Credit of Service Tax - Appellant did not submit all copies of BRC/FIRC in support of export turnover - relevant services were either used in un-registered premises or did not have any nexus with the output services or did not fall in the ambit of Rule 2(1) of CCR or on strength of invalid documents/missing invoices in contravention of Rule 9 ibid - HELD THAT:- There are no merit in the ground stated at (i) for the reason that the if the credit claimed was inadmissible for any reason then proper proceedings for the denial of the CENVAT Credit should have been initiated under Rule 14 of the CENVAT Credit Rules, 2004. When the Appellant has claimed refund of the unutilized credit in terms of Rule 5 of CENVAT Credit Rules, 2004 read with Notification No 5/2006-CE, the question of admissibility of the CENVAT Credit could not be questioned and refund claim denied for this reason.

  In case of Qualcomm India Pvt. Ltd. [2019 (8) TMI 1645 - CESTAT HYDERABAD] Hyderabad Bench has held that 'in absence of specific provisions contained in the statute, denial of the refund benefit provided under Rule 5 ibid, in our considered opinion, cannot stand for judicial scrutiny.'

  Admittedly in the present case, there is no position to ascertain whether any proceedings for denial of the CENVAT Credit were initiated in terms of the Rule 14 of the CENVAT Credit Rules, 2004. Nothing to this effect has been stated either in the show cause notice, order in original or the impugned order. Thus in absence of any assertion that proper proceedings have been initiated under Rule 14, in view of the above decision, there are no merits in the impugned order denying the refund claim by holding certain credits as inadmissible.

  There are merits in the submissions of the Appellant that for determining the admissibility of the refund the authorities should have made the revised calculations by taking those FIRCS/BRCs which were produced by the Appellant. Undisputedly the entire amount claimed as refund by the Appellant as per the refund claim filed by them 28.12.2012, would be admissible even if the export turnover for the purpose of calculating the admissible refund as per notification No 5/2006-CE (NT). Thus there are no merits in the rejection of the refund claim on this account also.

  There are no merits in the submissions made by the Appellant claiming refund over and above the amount claimed by them in the claim filed by them on 28.12.2012. Impugned order correctly records that the Appellant could not have claimed any amount which was not the subject matter of proceedings before the lower authorities.

  Conclusion - There are no merit in the denial of refund on the grounds of lack of nexus or unregistered premises, especially in absence of any Rule 14 proceedings.

  Appeal is thus allowed to the extent of the amount claimed as refund in the refund claim filed by the Appellant on 28.12.2012, and was subject matter of the show cause notice dated 07.04.2014.

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• 2025 (6) TMI 1091
  

  Wrong availment and utilization of Cenvat Credit in contravention of Rule 3(4) of Cenvat Credit Rules, 2004 - Non-payment of service tax on declared service under Section 66E(e) of Finance Act, 1994 on forfeiture of deposits on account of penalty/fine and others.

  Wrong availment and utilization of Cenvat Credit in contravention of Rule 3(4) of Cenvat Credit Rules, 2004 - HELD THAT:- It has been brought to the notice that the appellant had all requisite documents in his possession to show that the said Cenvat credit has been availed and utilized well in conformity of the said rules. He also mentioned that the details of the said record, the list thereof were placed before the adjudicating authority below. He has acknowledged to have all the requisite invoices detailed in the said list to be in his possession.

  Keeping in view the said submission and the fact that the Cenvat credit has been disallowed for want of the documents, it is deemed appropriate that an opportunity be given to the appellant to produce the entire record before the original adjudicating authority who shall take a fresh decision, afresh, about the entitlement of the appellant vis-à-vis the impugned amount of Cenvat credit.

  Non-payment of service tax on declared service under Section 66E(e) of Finance Act, 1994 on forfeiture of deposits on account of penalty/fine and others - HELD THAT:- This issue is no more res integra. This tribunal in the case of South Eastern Coal Fields Ltd. vs. CCE & ST, Raipur [2020 (12) TMI 912 - CESTAT NEW DELHI] has considered the same issue as above. It has already been held that 'It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards “consideration” for “tolerating an act” leviable to service tax under section 66E(e) of the Finance Act.'

  Thus, the issue of considering a forfeited amount as an amount of consideration towards declared services stands already settled in favour of the assessee. The same is already held to not to be the consideration towards rendering declared service defined under section 66E(e) of the Finance Act, 1944. In fact the cancellation of contract itself is held to not to be a service. There are no reason to differ from these findings - the service tax demand on the forfeited amount has wrongly been confirmed. The demand is therefore set aside.

  Conclusion - The demand of service tax amounting to Rs.69,88,709/- along with interest is hereby set aside. The order of respective penalty imposed is also set aside. However, the issue of disallowing Cenvat credit with interest and respective penalty is remanded to the original adjudicating authority for fresh decision to be taken in the light of the invoices/other documents to be produced by the appellant.

  The appeal stands allowed partially by setting aside the demand of service tax and partially by way of remand.

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• 2025 (6) TMI 1090
  

  Nature of activity - sale or service - supply of license keys/codes for antivirus software constitutes a taxable service under section 65(105)(zzzze) of the Finance Act, 1994, or amounts to a transfer of goods? - HELD THAT:- It is seen that, the order of the Tribunal, in re Sakri IT Solutions Pvt Ltd v. The Additional Director General (Adjudication), [2024 (4) TMI 373 - CESTAT NEW DELHI] had held that 'the supply of packed Antivirus Software to the end user by charging license fee would amount to a provision of service and would not be a sale.'

  Conclusion - The transaction involving supply of antivirus software license keys/codes is not liable to service tax but is a sale of goods attracting VAT/sales tax.

  As the issue stands settled in their own dispute for the earlier period and with the present dispute having its origin in ‘statement of demand’ consequent to the show cause notice issued therein, the impugned order is set aside - Appeal allowed.

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• 2025 (6) TMI 1015
  

  Time limitation - Violation of principles of natural justice - adjudication of the Show Cause Notices issued in 2008, after a delay of more than 17 years - HELD THAT:- There are several circulars, which have been issued by the Board which have enjoined the Department to adjudicate the show-cause notice proceedings as expeditiously as possible - That apart, there are earlier schemes referring cases to call-book has been referred to in Circular no.1023/11/2016-CX, dated 08.04.2016.

  The decisions cited by the learned counsel for the petitioner, particularly, that of this Court indicate that the delay in adjudication of show cause proceedings has to result in abatement of the aforesaid proceedings. In this case, the Show Cause Notices were issued in the year 2008. Now, more than 17 years have lapsed.

  In the case of J.Sheik Parith [2020 (9) TMI 311 - MADRAS HIGH COURT], this Court has held that where the period of more than 8 years had lapsed from the issuance of show cause notice and there was no proper or justifiable explanation from the Revenue for the delay in their adjudication, show cause proceedings have to abate.

  In the present case also there are no justifiable reasons forthcoming from the Revenue for the delay in adjudication of the show cause proceedings. Thus, the continuation of show cause proceedings long after their issuance have to be held to be arbitrary and offending under Article 14 of the Constitution of India. Therefore, these writ petitions are deserve to be allowed in view of the overwhelming body of decisions of various Courts holding that the proceedings initiated long before cannot be continued after efflux of time.

  Conclusion - Though really no prejudice can be said to have been caused to the petitioner on account of the transfer of the case to the Call Book and delay in adjudication of the Show Cause proceedings. Nevertheless, in view of the overwhelming body of decisions of the Courts including that of this Court, these writ petitions deserve to be allowed.

  The Show Cause Notices dated 29.09.2008 & 05.11.2008 impugned in these writ petitions are quashed - Petition allowed.

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