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Service Tax - Case Laws
Showing 141 to 160 of 29271 Records
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2024 (3) TMI 1179
Levy of Service tax - Banking & Financial Services - providing corporate guarantee on behalf of its sister concerns to lenders but had not charged any commission or interest or fees for providing the guarantee - demand has been made only on a notional amount which, according to the Revenue, the respondent could have received had it charged its sister concern for providing the guarantees - HELD THAT:- Service tax can be charged on the consideration received for providing taxable services. In other words, there must be a service provider, a service recipient, a taxable service and a consideration. The service provider shall be liable to pay service tax on the consideration which it receives for providing a taxable service. Any amount which is received but which is not a consideration for providing a taxable service is not exigible to service tax. Similarly, if a service is rendered, but no consideration is received no service tax can be charged. It is for the reason that if the consideration received is zero any percentage will be zero itself.
In the case of OLAM AGRO INDIA LTD VERSUS COMMISSIONER OF SERVICE TAX [2013 (11) TMI 1503 - CESTAT NEW DELHI] it is recorded “a show cause notice dated 03.04.2012 was issued covering the period October 2010 to 31.12.2011 proposing levy of service tax, interest and penalties for corporate guarantee commission remitted by the petitioner to the signatory entity and agency commission remitted for service provided by agents in respect of the export business of the petitioner”. Thus, in both cases, a commission or other consideration was received for providing the taxable services and the dispute was whether service tax could be charged on such commission which is received.
In the present case, there is not an iota of doubt that no consideration was received at all because the show cause notice itself says so. This being the position, it is found that the impugned order is correct and proper and calls for no interference.
The impugned order is upheld and Revenue’s appeal is rejected.
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2024 (3) TMI 1178
Classification of service - service rendered by the appellant to overseas universities/colleges amounts to “export of service” or “intermediary service” or not - period 1.07.2012 to March 2016 - HELD THAT:- The undisputed fact is that the appellant had entered into agreement with various foreign universities whereby the appellant was required to provide services to the universities which implies that the service provider is located in India and the recipients of service were located outside India. It is also an undisputed fact that the appellant was receiving the consideration for the service rendered by way of convertible foreign exchange. The nature of service provided by the appellant was to recruit students in the courses conducted by these universities/institutes.
From the definition of “intermediary services”, it is found that activity between two parties cannot be considered as an intermediate service as intermediary essentially arranges or facilitates the main supply between two or more persons, which is not the case here. Further, the definition of intermediary service excludes any person who has provided the service on their own account. Here from the facts, it is evident that the appellant has provided the service on his own account to the recipient of service, i.e. the foreign university placed beyond the taxable territory of India.
The Chandigarh Bench in M/S SUNRISE IMMIGRATION CONSULTANTS PRIVATE LIMITED VERSUS CCE & ST, CHANDIGARH [2018 (5) TMI 1417 - CESTAT CHANDIGARH] considered the issue whether the assessee is an intermediary with reference to the service to universities, colleges and banks and whether any service tax could be levied and answered the issue in favour of the assessee.
Following the observations in MS EVALUESERVE SEZ PVT LTD, EVALUESERVE COM PVT LTD VERSUS C.C.E & S.T GURGAON – I (VICE-VERSA) [2018 (12) TMI 1242 - CESTAT CHANDIGARH], that receipt of consideration from the overseas client excluded them from tax as intermediary, the appellant cannot be held to be providing intermediary service as it is an admitted position that the appellant had been receiving consideration in the form of commission from the recipients of service placed abroad.
The stand of the department that the appellant was rendering two types of services, one by way of rendering consultancy services to the students who wanted to study abroad by assisting them and the second was service to foreign universities by way of recruitment of students for them, is not correct. Firstly, the fees deposited by the students is directly remitted to the universities. Secondly, the appellant is not charging any consideration from the students and there cannot be any taxable service without any consideration - there is no privacy of contract between the appellant and the prospective students as laid down by the Delhi High Court in VERIZON COMMUNICATION INDIA PVT. LTD. VERSUS ASSISTANT COMMISSIONER, SERVICE TAX, DELHI III, DIVISION-XIV & ANR. [2017 (9) TMI 632 - DELHI HIGH COURT].
The learned Counsel for the appellant has taken an alternate plea in terms of the exemption notification No. 25/2012 dated 20.06.2012 issued by the Central Government in exercise of power under section 93 of Finance Act, 1994, where at serial No. 9 services provided to or by an educational institution in respect of education has been exempted from service tax and subsequently by amendment vide Notification No. 06/2014 dated 11.07.2014 the exemption was provided to services relating to admission to, or conduct of examination by such institution and therefore the appellant was not liable to pay service tax.
The impugned order deserves to be set aside - The appeal is, accordingly allowed.
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2024 (3) TMI 1177
Short payment of service tax - service of Authorised Service Station for Motor Vehicle servicing and repairing - non-addition of the value of consumable used while providing service to vehicle owners and free service commission in the taxable value - HELD THAT:- The issue as regards includability of the cost of spares in the gross taxable value is in contradiction as regards Circulars dated 05.03.2003 and 23.08.2007. It is observed that positive findings need to be recorded on the basis of factual verification as regards existence of separate bills for spare parts and/ or payment of sales tax/VAT thereon before arriving to the conclusion to drop demand. It is found that separate invoices were not found as regards the Assessee having carried out installations on CNG kits that despite the assessee having carried out such installations and paid VAT thereon, it cannot be ipso facto concluded that they have not rendered any taxable service and are not liable to service tax. Therefore in the interest of justice the said issues need to be examined in depth.
The issue needs to be remanded to the adjudicating authority for reconsidering the value for demand taking to consideration the dispute raised in the show cause notice and submissions made by both the sides.
The appeal is allowed by way of remand to the adjudicating authority to decide the issues de-novo.
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2024 (3) TMI 1176
Levy of service tax - liquidated damages - Circular No. 178/10/2022-GST dated 3.8.2022 - HELD THAT:- The issue as contended by the learned Advocate, in the case on hand, has already been addressed to in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] and settled in favour of the taxpayer where it was 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.
The service tax liability fastened on the appellant on the liquidated damages received does not survive - the impugned order set aside - appeal allowed.
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2024 (3) TMI 1175
Classification of service - insurance service or not - general insurance scheme related to P&I Clubs which is only a membership fee paid to the club for third party insurance - HELD THAT:- Since both the counsel agree for remanding the matter back to the file of the original authority for denovo adjudication, it is deemed appropriate to set aside the impugned order and restore the matter back to the file of the original authority who shall pass a denovo adjudication order in the light of the judgment of the Hon'ble Supreme Court in STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT].
The appeal is allowed by way of remand.
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2024 (3) TMI 1174
Nature of activity undertaken by the appellant - Amounting to manufacture or not - Business Auxiliary Service or not - business of surface treatment of article/structures of steel provided to them by their clients, which is performed at site/workshop - non-payment of service tax for the period 16.06.2005 to 30.09.2009 - HELD THAT:- The process undertaken by the appellant makes a new identifiable product and the same cannot be held that it is only a job work activity. In fact, the activity undertaken by the appellant amounts to manufacture as held by this Tribunal in the case of M/S. MOHATA COAL COMPANY (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, BOLPUR COMMISSIONERATE [2024 (3) TMI 1166 - CESTAT KOLKATA], wherein this Tribunal has relied on the decision of the Tribunal in the case of M/S FERRO SCRAP NIGAM LIMITED VERSUS COMMR. OF CGST & EXCISE, BOLPUR (VICE-VERSA) [2021 (1) TMI 711 - CESTAT KOLKATA] and it was held that As it has already been decided that the said activity undertaken by the appellant amounts to manufacture and the appellant is doing the said activity on job work basis and such job worked goods have suffered duty at the end of the principal manufacturer, in these circumstances, the demand of Service Tax under the category of “business auxiliary service” is not sustainable against the appellant.
As the issue has already been decided by this Tribunal, wherein it has been held that the activity undertaken by the appellant amounts to manufacture and the appellant is doing such activity on job work basis and such “job work” has suffered duty at the end of principal manufacturer.
The appellant is not liable to pay service tax under the category of Business Auxiliary Service. Accordingly, the impugned demand is not sustainable against the appellant - Appeal allowed.
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2024 (3) TMI 1173
Refund claim - rejection on the ground that the appellant have not complied with the condition of N/N. 12/2013-ST clause-III sub-clause(C) in as much as the appellant have not obtained the Service Tax registration before filing the refund - HELD THAT:- From the condition of the Notification, the assessee is required to obtain a registration before filling a refund claim in terms of Clause-III Sub-clause (c) of Notification. However, as per sub-clause (g) even if the appellant has not obtained the registration they may obtain registration before filing the refund claim. As per the facts of the present case the appellant though did not obtain the registration before filing the refund application but subsequently on 14.07.2015 they had obtained registration. After obtaining the registration, the condition of the Notification provided under clause (c) stands made and on that account refund could not have been rejected as at the time of rejection of claim the appellant had registration in possession. Therefore, considering the same refund should have been sanctioned.
Moreover, even as per the condition the appellant is required to apply for the registration prior to filing the refund application. This condition is merely a procedural requirement and for breach of the procedural condition the substantial benefit of refund cannot rejected, particularly when the payment of service tax and use of service in the SEZ is not under dispute - Section 26 of SEZ Act provides that no tax/ duties are leviable on the input or input service received and use in the SEZ. As per this statutory provision which override any other Act, the service tax is not leviable on the service received in SEZ. Accordingly, the tax paid on the service needs to be refunded.
The impugned order is set aside - appeal allowed.
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2024 (3) TMI 1166
Levy of Service Tax - business auxiliary service - activity carried out by them of processing of cutting, grinding, drilling and machining of forged black wheels / axles supplied by M/s. Durgapur Steel Plant - HELD THAT:- The issue has already been examined by this Tribunal in the case of M/S FERRO SCRAP NIGAM LIMITED VERSUS COMMR. OF CGST & EXCISE, BOLPUR (VICE-VERSA) [2021 (1) TMI 711 - CESTAT KOLKATA] wherein this Tribunal observed The Tribunal in their own case M/S FERRO SCRAP NIGAM LIMITED VERSUS CCE, RAIPUR AND VICE-VERSA [2014 (1) TMI 1051 - CESTAT NEW DELHI] where it was held that service of shifting, transportation or raw materials, waste materials, and finished products from one place to another, inside the plant itself, does not fall under the taxing category of Cargo Handling Services.
As it has already been decided that the said activity undertaken by the appellant amounts to manufacture and the appellant is doing the said activity on job work basis and such job worked goods have suffered duty at the end of the principal manufacturer, in these circumstances, the demand of Service Tax under the category of “business auxiliary service” is not sustainable against the appellant.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 1136
Non-payment of service tax - Customs House Agent and Storage and Warehousing Services - non-payment of service tax on the value of services rendered on account of ground rent of empty containers - non-payment of service tax on services rendered in respect of handling of empty containers under the category of Storage and Warehousing Services - HELD THAT:- Due to the plea of the appellant being eligible of cum tax benefit that this Tribunal vide Final Order No. 56944/2013 dated 04.07.2013 had remanded back the matter. It is observed that subsequent to remand, the benefit of cum tax has been given to the appellant, accordingly, the entire demand on the aforementioned first issue was absolutely dropped.
However, the demand on second count is confirmed holding the activity done by the appellant to be called as storage and warehousing services. It is observed that there is no denial about discharge of service tax by the appellant with respect to handling of empty containers which were stored in the appellant’s area or were warehouse. The demand is with respect to such empty containers which were handled prior reaching the appellant’s storage area/warehouse. The issue therefore is as to whether the said activity can be called as the part of taxable service “Storage and Warehousing”.
No doubt Circular No. 60/9/2003-ST dated 10.07.2003 clarifies that handling of empty containers would be covered within the scope of Storage and Warehousing Services. However, for the applicability of this circular the goods/empty containers should first have been stored or warehoused and should be handled within the said warehouse or the storage space. Apparently and admittedly, the same is not the case for the impugned demand. Hence the appellant’s activity of handling containers cannot be called as taxable activity of storage and warehousing. The handling of the containers which were never stored or warehoused since is not covered in the taxable activity of storage and warehousing, the service tax on the amount received for handling of nonstored/ non-warehoused empty containers is wrongly demanded and thus is held to have wrongly been confirmed.
The activity of handling of container cannot to be covered under the taxable activity of cargo handling as cargo handling service also. This activity is essentially a service in relation to merchandise - The Circular No. B11/1/2002-TRU has explained that empty containers cannot be treated as cargo. In light of these observations, the activity in question cannot even be called as the taxable activity of Cargo Handling Service. The order under challenge for the said reason is liable to be set aside.
The order under challenge is held not sustainable. Same is accordingly therefore set aside - Appeal allowed.
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2024 (3) TMI 1108
Recovery of CENVAT Credit erroneously refunded alongwith interest - penalty for ineligible availment of CENVAT Credit - HELD THAT:- It is not in dispute that petitioner has been refunded the said amount after the petitioner was found eligible by the Tribunal for refund and further by this Court towards interest for delayed refund of the CENVAT Credit. Accordingly, there is no ground to demand the same from the petitioner.
Since the Revenue is approaching the Supreme Court impugning the order of the Tribunal as well as the order in appeal passed by this Court holding petitioner entitled to refund of the CENVAT Credit, it would be open to the Revenue to seek interim orders of protection from the Supreme Court. The Revenue cannot after being unsuccessful before this Court, on its own, declare the refund of the CENVAT Credit as well as interest on delayed payment to be erroneous refund. Unless the Revenue is successful before the Supreme Court or the Supreme Court so warrants, there is no question of any refund of the CENVAT Credit or refund of the interest paid to the petitioner.
The impugned Show Cause Notice cannot be sustained. The same is accordingly quashed.
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2024 (3) TMI 1107
CENVAT Credit - input service - nexus with manufacturing of final product or not - Reverse Charge Mechanism (RCM) - Excess availed cenvat credit of service tax - contravention of Rule 7 of CCR. 2004 - Cenvat credit of Education Cess and Secondary & Higher Education Cess - violation of Notification No. 12/2015-CE (NT) dated 29.10.2015 - non-payment of service tax on Ocean Freight - non-payment of service tax on Government Fees under RCM.
Wrong availment of CENVAT Credit of Rs. 6,86,000/- on the services received from M/s Satnam Construction Co. Fabrication Unit, Delhi - HELD THAT:- The appellant has exported PET plant from Neemrana in India to Jamaica, a place outside India with the services to install the same in Jamaica as received from M/s. Satnam Construction Co. Ltd. The later company only has given services to appellant for dismantling the said PET plant clearing, painting and repacking it for being exported. Hence the services received from M/s. Satnam were services exported. The activity done in India by said M/s. Satnam is definitely a service used by the provider of output service for providing output service. Hence, it is well covered in the definition of input services - Cenvat Credit on services received from M/s. Satnam Construction Co. for Rs.6,86,000/- is held admissible to the appellant. Hence the order of the Commissioner (Appeals) is not sustainable qua this issue.
Wrong availment of CENVAT Credit of Rs. 5,15,579/- on 30.06.2017 on challan in respect of RCM liability for the month of June-17 paid in July-2017 in contravention of Rule 4(7) of CCR, 2004 - HELD THAT:- Section 140(5) of the CGST Act, 2017 provides for entitlement to registered person for taking credit of eligible duties and taxes in respect of inputs and input services received on after the appointed date i.e. 30.06.2017 subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day then denying the credit to the appellant when the input services were received prior to 30.06.2017 and tax was paid under RCM before the due date prescribed under the Finance Act, 1994 would be unjustified and cause undue hardship to the appellant when there is no legislative intent to do so - appellant is held entitled for cenvat credit of Rs. 5, 15,579/-.
Excess availment of CENVAT Credit of service tax amounting to Rs. 2,41,451/- in excess on the services which were attributable to appellant as well as other manufacturing unit i.e. Gandhidham, Gujarat in contravention of Rule 7 of Cenvat Credit Rules, 2004 - HELD THAT:- It was mandatory for the appellant to distribute credit as per the directions of said Rule 7. Apparently and admittedly Rule 7 has not been followed while distributing credit. Hence it is held that the phagi unit is rightly held to have been allocated with excess credit.
Wrong availment of CENVAT Credit total amounting to Rs.1,31,219/- of Education Cess & SHE Cess in violation of Notification No. 12/2015-CE(NT) dated 30.04.2015 and 22/2015-CE (NT) dated 29.10.2015 - HELD THAT:- Hon'ble Madras High Court in SUTHERLAND GLOBAL SERVICES PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER CGST AND CENTRAL EXCISE, COMMISSIONER OF CGST AND CENTRAL EXCISE, GOVERNMENT OF TAMIL NADU, UNION OF INDIA, CENTRAL BOARD OF EXCISE AND CUSTOMS, THE CHAIRMAN, GSTN [2019 (11) TMI 278 - MADRAS HIGH COURT] has clearly held that accumulated credit of Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess - Credit continues to be available till such time it is expressly stated to have lapsed No notification/circular/instruction expressly provided that credit accumulated would lapse Authorities cannot now take stand that such credit unavailable for use. It is held that available credit as on date of transition was available to an assessee for set off - Availment of credit on this account is therefore held to be wrongly denied.
Wrong availment of CENVAT Credit of Rs. 82,720/- on M.S. Bar, Channel, H.R. Coil etc. in violation of Rule 2(a) & 2(k) of Cenvat Credit Rules, 2004 used for support of capital goods - HELD THAT:- The items on which cenvat credit had been taken were used in the manufacture of capital goods or repair and maintenance of capital goods. The basic idea is that cenvat credit is admissible so long as the inputs are used in or in relation to the manufacture of final product and whether directly or indirectly. The allegation of the department that the goods on which cenvat credit was availed did not satisfy the definition of the capital goods was considered by the larger bench of the Tribunal in the case of BALLARPUR INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BELGAUM [1999 (12) TMI 88 - CEGAT, NEW DELHI] wherein the theory of "direct participation" of the goods eligible for modvat credit had been specifically rejected in the light of its earlier larger bench decision rendered in the case of JAWAHAR MILLS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [1999 (4) TMI 153 - CEGAT, NEW DELHI] - the findings in Order-in-Appeal on this issue are not sustainable.
Non-payment of Service Tax amounting to Rs. 6,64,172/- on Ocean Freight in accordance with the Notification 16/2017- ST dated 13.04.17 - HELD THAT:- Hon'ble Supreme Court has held that the levy of IGST on the amount of Ocean Freight as unconstitutional in the case of UNION OF INDIA & ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR [2022 (5) TMI 968 - SUPREME COURT]. The adjudicating authority had not considered said judgement on the ground that the same has been passed in GST regime. These findings are therefore liable to be set aside
Non-payment of Service Tax of Rs. 1,07,393/- on the Government Fees under RCM in accordance with provisions of Notification No. 22/2016-ST - HELD THAT:- Tax liability on the amount in question under this issue arises only when any service is provided or agreed to be provided by the government or local authority. In the case of appellant no service has been provided by the DGFT and Transport department. The payment of fees to these departments is for the purpose of procuring Advance License from DGFT for duty free import of raw material for manufacture of final product which is then exported and for obtaining permit respectively. Demand on this issue is also held to be wrongly confirmed.
Appeal allowed in part.
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2024 (3) TMI 1106
Levy of service tax - Mining Services - execution of contracts for transportation of Coal/Over Burden within the mines and also outside the mines - demand under Business Auxiliary Service reported as Handling Charges - CENVAT Credit disallowed on Tippers (CH.87) used for providing Cargo Handling Service - denial of credit on M.S. Channel and M.S. Angle used for repairing Body/Dallas of the Tippers/Dumper has been disallowed on the ground that the same was not input for the repair of the Tippers/Dumpers - denial of credit availed on the strength of invoices which are in the names of third parties (contractors) - demand of CENVAT Credit against availment of CENVAT Credit prior to payment.
Mining services - HELD THAT:- The activity of transportation is most appropriately classifiable under “Goods Transport Agency Services” and the liability to pay Service Tax on the transportation service lies on the service receiver under the reverse charge mechanism. Accordingly, the transport services provided by the Appellant cannot be classified under the category of “Mining Services”. It is observed that this view has been taken by the Hon'ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR VERSUS SINGH TRANSPORTERS [2017 (7) TMI 494 - SUPREME COURT]. Relying on the said decision, this tribunal has taken the same view in the case of M/S MAA KALIKA TRANSPORT PRIVATE LIMITED VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, ROURKELA, ROURKELA [2023 (7) TMI 435 - CESTAT KOLKATA] wherein it has been held that transportation of coal within the mines is liable for service tax under the category of “Goods Transport Agency Services” and therefore the liability to pay service tax under the reverse charge mechanism lies on the service receivers - the transportation service rendered by the Appellant within the mines and outside the mines are not chargeable to service tax under the category of 'Mining Services'. Similarly, the activities of Shifting and Feeding of Coal into the Hoppers” has been carried out in the Power Plants and hence the same cannot be categorized as 'Mining Service'. Accordingly, the demand of service tax confirmed in the impugned order on this count is set aside.
Demand of service tax on diesel supplied free of cost by the client under the category of Mining Service - HELD THAT:- Under the composite contract dated 27/08/2010 awarded by Calcutta Industrial Supply Corporation (CISC) for mining, it was agreed upon that the said client would supply the Diesel (HSD) free of cost for running of Tippers, Excavators, HEMM etc. for providing the “Mining Services”. It is observed that during the relevant period, there is no provision in the valuation rules to include the value of free supply material in the assessable value for the purpose of levy of service tax. Accordingly, we hold that the cost of HSD valued Rs.3,97,69,281/- supplied free of cost by the client cannot be included in the assessable value during 2011-12 for the purpose of demanding service tax under the category of “Mining Services”. Accordingly, the demand of service tax in the impugned order on this count is not sustainable - the demand of service tax of Rs.18,76,33,250/- confirmed in the impugned order along with interest and penalty, under the category of 'Mining Services' is not sustainable and accordingly the same is set aside.
Handling charges - HELD THAT:- The discount amount received has been credited in the books of accounts under the head of “Handling Charges. It is observed that the Department has considered these receipts as taxable value received and demanded service tax under the category of "Business Auxiliary Service". A perusal of the journals, invoices and CA Certificates submitted by the Appellant reveals that the Handling Charges of Rs.75,60,332/- received them was towards 'Discounts' only and not for providing any taxable services. Merely because the amount is accounted for under the Account Head "Handling Charges", it would not make it taxable under category of “Business Auxiliary Services”. Accordingly, the service tax confirmed in the impugned order on this count is not sustainable.
CENVAT Credit of Rs.37,13,615/- disallowed on Tippers (CH.87) used for providing Cargo Handling Service - HELD THAT:- The CENVAT Credit in the instant case was claimed in the year 2008, when the Appellant was not rendering 'Cargo handling service'. The Appellant took registration of the vehicle under the Motor Vehicles Act on 12-10-2010. This date has no relevance for availing the credit on the Tippers as 'Capital goods'. As the Tippers were not used for providing Cargo Handling Service for which they are eligible as 'Capital Goods', at the time of receipt of the goods in the year 2008, we hold that the credit availed by the Appellant on this count has been rightly denied in the impugned order. The Appellant has not intimated the availment of capital goods credit on the Tippers. Hence, extended period has been rightly invoked to disallow the credit. For the same reason, the appellant is also liable for penalty. Accordingly, the demand of service tax along with interest upheld. As the irregular credit availed by the Appellant has been established, the Appellant is liable for interest and penalty under Rule 15(2) of the CENVAT Credit Rules 2004.
Denial of CENVAT Credit of Rs.8,64,278/- on the 217 MT of M.S.Channel and M.S.Angle used for repairing Body/Dallas of the Tippers/Dumper - HELD THAT:- During the period from April 2012 to November, 2012, the Appellant purchased 217 MT of M.S. Channel and M.S.Angle and claimed that they have used the same for repairing Body/Dallas of the Tippers/Dumper which were in turn used for providing taxable services under the category of “Cargo Handling Services”. This fact needs to be verified. In the impugned order, the adjudicating authority observed that a 'Dumping Truck' normally weighs 4-6 MT. The claim of consuming 217 MT angle/Channel for repairing work in one year for making 'Body/Dallas' appears nothing but a sham - the adjudicating authority has not given any finding as to whether the Tippers/Dumpers for which the 217 MT of MS Angle and MS Channel were said to have been used qualify as capital goods first. The Appellant has also not submitted any evidence to support their claim that the 217 MT of MS angle and MS Channel has been used in repairing the Tippers. Accordingly, this matter needs to be remanded back to the adjudicating authority to examine the eligibility of this credit, on the basis of the above observations.
Denial of CENVAT Credit of Rs.6,14,095/- availed on the strength of invoices which are in the names of third parties (contractors) - HELD THAT:- The Appellant had already reversed the CENVAT Credit of Rs.4,81,313/- and Rs.1,32,782/- vide Challan dated 27-04-2013 and Challan dated 29-07-2013 aggregating to Rs.6,14,095/- along with interest of Rs.1,36,728/-. However, it is found that the Impugned Order has only considered the payment of Rs.4,81,313/- and appropriated the same. Since the Appellant has already reversed the entire credit of Rs.6,14,095/- the same is appropriated.
Appeal disposed off.
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2024 (3) TMI 1105
Non-payment of service tax - Business Support Service - Renting of Immovable Property Service - Sale of space and Time for Advertisement Service - invocation of Extended period of Limitation - penalty - HELD THAT:- SCN has already been issued to the appellant on the same issue of implementation of Private Owned Buss Scheme, 2001 and a demand has already been raised under the category of 'Business Auxiliary Service' . Thus, the department is well aware of the activities of acquiring buses by the appellant from private operators for carrying passengers. Now, Notice has been again issued for the same activity under various categories of taxable service such as "Business Support Service, Renting on immovable properties and providing time & space for Advertisement service, by invoking the extended period. It is observed that the appellant has been filing returns regularly and the activities of appellant is well within the knowledge of the department. Accordingly, the department at this stage cannot claim wilful suppression of fact intending evade payment of service tax on the part of the appellant and raise the demand again by invoking extended period, as held by the Hon'ble Apex Court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT]. Accordingly, the impugned Order is not sustainable on the grounds of limitation.
Business Support Service - HELD THAT:- The appellant corporation has acquired the passenger vehicles having road worthiness to meet their requirement for the efficient, adequate and economic passenger transport services, in public interest, The appellant, being a statutory Corporation, has no authority to permit other persons to run their vehicles on their own, on payment of some amount to the Corporation. From the plain reading of the definition of Sec.65(104c) of the Finance Act, 1994, it is observed that the activity of providing parking and receipt of entry fee is not covered under the clauses mentioned under the definition of Business Support Service. Accordingly, the activity undertaken by the appellant cannot be considered as 'Business Support Services' promoting the business of the private transport operators. Hence, the demand confirmed in the impugned order under the category of 'Business Support Services' is not sustainable.
Renting of Immovable Property service - HELD THAT:- The appellant has rented out immovable property for a consideration. In their submissions, the appellant contended that they are not a commercial concern. They are a non-profit making statutory body. They have provided the spaces to stall owners at various places for the benefit of the passengers to arrange their necessity during the journey. Whatever, amount collected by them cannot be considered as 'rent' and used the same has been used towards providing amenities for the passengers in the public interest. Hence, the amount received towards rentals or lease/license fees cannot be considered as 'consideration' received for taxable services - the appellant is liable to pay service tax under the category of 'Renting of Immovable property service' - there is no suppression of fact involved in this case. Accordingly, the demand, if any, under this category of service is restricted to normal period of limitation only.
Time & Space for Advertisement Services - HELD THAT:- The appellant is not an advertisement agency. Further, we observe that 'Sale of Space and time for advertisement' has been brought under the ambit of service tax net only w.e.f. 01.05.2006. In the present case, the demand under this category has been raised for the period 2007-08 to 2011-12. As per the table mentioned in para 16.8 of the Show Cause Notice, we observe that the entire demand is confined to the period 2007-08 to 2009-10. There was no receipt under this category during the financial years 2010-11 and 2011-12. Accordingly, the entire demand under this category is barred by limitation. Hence, no demand confirmed in the impugned order survives under this category.
Penalty - HELD THAT:- There is no evidence of wilful suppression of fact intending evasion of payment of service tax in this case. Accordingly, the penalty imposed on the appellant is not sustainable and hence the same is set aside.
Appeal disposed off.
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2024 (3) TMI 1104
Non-payment of service tax - commercial training and coaching center providing vocational training to the students - Department considered the services rendered by the appellant are taxable services and the exemption provided under N/N. 24/2004-ST dated 10.09.2004 is not applicable to them - HELD THAT:- N/N. 24/2004-ST 10.09.2004, exempts vocational training provided by a Coaching Centre. The appellant considered the services rendered by them are exempted from payment of service tax as per this Notification. It is observed that there is no specific finding in the impugned order to the effect that the coaching offered by the appellant are not vocational training. A perusal of the Brochures submitted by the appellant clearly reveal that most of the courses offered by the appellant are vocational training. Accordingly, the appellant are eligible for the benefit of Notification No. 24/2004-ST 10.09.2004.
The legal status of respective universities is not in dispute. The syllabus for these courses are prescribed by the universities in consultation with the appellant institute and examinations are also conducted by the universities which thereafter issues certificate/degree/diploma to successful candidates. Therefore, the appellant institute provided educational qualification recognized by the law and are accordingly outside the ambit of 'commercial training or coaching services. Hence, there is no service tax liability on these services.
The demand of service tax confirmed in the impugned order is not sustainable. Since, the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 1103
Recovery of service tax alongwith interest and penalties - Sundry Debtors/ amounts realizable appearing in Balance Sheet - reverse charge mechanism - extended period of limitation - HELD THAT:- The proposed demand of Service Tax of Rs. 1,64,78,600/- has been reduced by Commissioner (Appeals) to an amount of Rs. 1,37,96,613/-, which has been confirmed alleging it to be the non-released receivables (sundry) from various Government debtors and private debtors (sundry debtors). Sundry debtors has been defined under Finance Act, 1994. As per normal terms sundry debtors refer to businesses, individuals or companies receiving services or products from another company or business without making the payment immediately. The payment occurs on a credit basis, where the debtors are liable to pay the money in future, i.e. the money lent to the sundry debtors is expected to return in the business financials within a short period of time. Payments on some future date to the sundry accounts are considered as fixed assets in the business.
The show cause notice is based upon the scrutiny of profit and loss account for the financial year 2014-15, wherein the amounts were found recorded to be recoverable from the Government as well as from the private debtors - the amounts mentioned in the balance sheet as profit and loss amounts as unrealized receivable from the sundry debtors cannot be considered as value of service. Apparently, there is no provision in the Act or the Rules to be disclosed as sundry debtors in the ST 3 Returns. Hence, demand cannot be confirmed by merely appreciating the difference between the profit and loss account / balance sheet and ST 3 returns.
The other ground for confirming demands is that the appellants had shown certain amounts du from the parties in their Income Tax returns and Revenue has proceeded to demand Service Tax on this amount shown in the Balance Sheet - HELD THAT:- In the present case, it is observed that the Show Cause Notice as well as orders of the adjudicating authority have just appreciated the difference noticed between the amount mentioned in the profit and loss account and are mentioned in ST 3 returns of the appellant. Without appreciating the amount out of the impugned invoices to have been actually received by the appellant and without verifying as to whether the requisite services were finally being provided. Resultantly, order confirming such a demand is not sustainable.
Invocation of the extended period - HELD THAT:- It is already observed that the matter has originated based upon the latest audit of the appellants own record. The order merely state that had audit not been conducted the liability as confirmed qua the appellant could not have been ascertained, cannot be the ground for invoking the extended period of limitation. The primary responsibility for ensuring that the credit amount of service tax is paid, rests on the officers even in the regime of self-assessment as clarified by the CBEC in its manual for scrutiny of ST return - There is no evidence found on record proving such intent / mens rea with the appellant to evade payment of service tax. The appellant have already been held not liable to pay the amount confirmed. Resultantly the department has wrongly invoked the extended period of limitation while issuing Show Cause Notice.
The impugned order is set aside - appeal allowed.
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2024 (3) TMI 1102
CENVAT Credit - activity of trading as well as erection, commissioning and installation services - non-maintenance of separate account for their input/input services used for providing taxable services as well as exempted services - violation of the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 - HELD THAT:- As held by the Hon’ble Telengana High Court in M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] that if the appellant has taken Cenvat Credit wrongly, Rule 14 of the Cenvat Credit Rules, 2004 empowers the authorities to recover such credit availed by the assessee wrongly. Admittedly in this case, no demand has been raised against the appellant under Rule 14 of the Cenvat Credit Rules, 2004.
Therefore, relying on the decision of the Hon’ble Telengana High Court in the case of Tiara Advertising vs. UOI, it s held that the demands are not sustainable against the appellant, therefore, the impugned order is set aside - appeal allowed.
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2024 (3) TMI 1101
Levy of service tax - Business Support Service - service of providing up-linking facility - classification of service - services of supply of DSNG Van to its clients can be classified and subjected to service tax under the category of Supply of Tangible Goods Service or not - time limitation - demand of interest - levy of penalties u/s 77 & 78 of FA.
Whether the service of providing up-linking facility will be taxable under the category of Business Support Service? - HELD THAT:- On examination of the terms of the contract between the appellant and their client it is clearly evident that appellant have provided the services which support the business activities of their client, by providing the uplinking facility from their teleport. Thus on merits these service would be classifiable under the category of business support services.
Whether the services of supply of DSNG Van to its clients can be classified and subjected to service tax under the category of Supply of Tangible Goods Service? - HELD THAT:- The agreement between the appellant and their customer is from the day one i.e. the day when it was entered into, was an agreement to provide these vehicles on rent to the appellant without transferring the effective control and possession of the vehicle to the customers - Hon’ble Supreme Court has in case of Adani Gases Ltd. [2020 (8) TMI 789 - SUPREME COURT] held that the supply of the pipelines and the measurement equipment (SKID equipment) by the respondent, was of use to the customers and is taxable under Section 65 (105) (zzzzj) of the Finance Act 1994 - there are no merits in the submissions made by the appellant in this respect and hold that the appellant has in fact provided the service under the taxable category of the Supply of Tangible Goods Services.
Whether the demand is barred by limitation? - HELD THAT:- The issue involved is purely of interpretation of the terms of agreement vis a vis the provisions of the Act. On going through the terms of agreement, the appellant were entertaining a bona fide belief that these service would not be classifiable under any of the taxable categories. There is nothing in the agreement to show that appellant could not have entertained such a belief. Also it is found that there has been dispute in respect of interpretation of the term “infrastructural support facility” used in the definition of Business Support Services. There are decisions which have held that the this term was restricted only to infrastructural support facilities, vis a vis the office maintenance facilities which have been out sourced. Thus it cannot be said that appellants could not have entertained such a belief - thus, extended period of limitation could not have been invoked for making this demand.
As the service tax is payable is under this category thus the demand will be restricted only to the extent it has been made within the normal period of limitation. To re-determine the same the matter needs to remanded back to the original authority.
Whether the penalties imposed under Section 77 & 78 can be justified? - HELD THAT:- As it is held invocation of extended period of limitation in respect of the demand made under the category of Business Support Services, the penalty imposed under Section in respect of this demand cannot be sustained. However in respect of the demand under category of Supply of Tangible Goods Services by invoking extended period of limitation as per proviso to Section 73 (1), which is upheld the penalty under Section 78 to that extent is upheld.
Interest - HELD THAT:- The demand for interest also upheld in respect of demands upheld.
Appeal allowed in part.
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2024 (3) TMI 1045
Classification of service - Business Auxiliary Service - Business Support Service - Intermediary - it was held by CESTAT that The appellant does not satisfy the conditions to be an ‘intermediary’ for his services and as such, the impugned order 08.07.2019 cannot sustain and is required to be set aside - HELD THAT:- The respondent-Company does not fall within the scope and ambit of any of the aforesaid definitions. This is having regard to the scope of its mandate to act on behalf of the principal namely primark.
Appeal dismissed.
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2024 (3) TMI 1044
Classification of services - Clearing and Forwarding Agents or not - testing the quality of silk received from the reelers and stock it for being sold in open auction to various agencies like the appellant, Handloom Silk Weavers Cooperative Societies and Twisters - HELD THAT:- The facts of the present case are more or less akin to the facts of THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. THE SALEM STARCH & MANUFACTURERS SERVICE INDUSTRIAL CO-OPERATIVE SOCIETY LIMITED [2013 (8) TMI 296 - MADRAS HIGH COURT], wherein also the Hon'ble High Court has held that there is no question of clearing and forwarding agents service involved and consequently there was no liability to service tax under the said category.
The demand of service tax on the appellant under the category of ‘Clearing and Forwarding Agents’ Service is not sustainable, for which reason, the impugned order cannot sustain - the impugned order set aside - appeal allowed.
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2024 (3) TMI 1043
Declared Service or not - agreement entered by the respondent-assessee with M/s. Syngenta India Limited for job work and were entitled to receive a variable costs and a fixed cost from M/s. Syngenta India Limited - falling under the categories of service “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act”, or not - clause (e) of Section 66E of the Finance Act, 1994 - HELD THAT:- On perusal of record as well as the agreement for job work, it is found that the agreement is primarily for undertaking job work for manufacturing various pesticides and the payment schedule for both, fixed as well as variable payment for manufacture of pesticides.
It can be seen from the schedule produced that payment for the job work for manufacturing of various kinds of pesticides has two components, firstly fixed charges per month of Rs. 16 Lacs and fixed charges up to 1500MT of per kg. basis at the rate of Rs. 5.7 per kg. for formulation and secondly for manufacturing of pesticides of above 1500MT variable rates has been given as provided - It can be seen that the agreement is primarily for manufacturing of pesticides by respondent-assessee on job work basis. The first category of the fixed charges which is at the rate of Rs. 16 Lacs per month is an integral part of the job work manufacturing charges i.e. primarily for the purpose of keeping the confidentiality of the formulation of the M/s. Syngenta India Limited and same cannot be considered separately from the job work agreement.
The fixed cost which are being paid to the respondent-assessee do not fall under Declared Service category as mentioned under Section 66E(e) and the amount which is paid to the respondent-assessee is primarily for manufacturing cost undertaken by them on job work basis.
It is an accepted legal position that the agreement has to be considered in its entirety for the purpose of levy of service tax since the agreement is primarily for undertaking job work for manufacturing various kinds of pesticides and therefore, even if the payment for the job work is made in two types namely one as fixed and another is at variable cost, this fact will not change the nature of the agreement and same is to be considered as job work manufacturing agreement - the department’s stand that fixed component of the payment for the job work category under the declared service under Section 66E is not sustainable.
The impugned order-in-original is legally sustainable - appeal is dismissed.
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