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Service Tax - Case Laws
Showing 181 to 200 of 29325 Records
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2024 (3) TMI 1283 - CESTAT CHENNAI
Levy of service tax - collection of excess amount from customers over and above the actual ocean freight paid to the shipping lines - period from April 2012 to September 2012 - HELD THAT:- The Adjudicating Authority has considered in Paragraphs 10.4 and 10.5 that the amount collected during the course of providing the Steamer Agent Service is subject to levy of Service Tax. However, he has not stated under which category and how this amount is an excess amount collected as freight would be consideration and the appellant has paid the Service Tax on the commission received as Steamer Agent. The amount collected is some excess of ocean freight as they were not able to quantify the exact freight to be paid to shipping lines. The ocean freight cannot be subjected to levy of Service Tax as it is not a consideration for Steamer Agency Services. The Department itself admits that these are amounts collected in excess of ocean freight. There is no provision for levy of Service Tax on ocean freight.
Further, as per the decision in the case of MESSRS SAL STEEL LTD. & 1 OTHER (S) VERSUS UNION OF INDIA [2019 (9) TMI 1315 - GUJARAT HIGH COURT], the Hon’ble High Court has held that the demand of Service Tax on ocean freight cannot sustain.
It is found that though Department alleges that the appellant has collected excess amount towards freight, the Show Cause Notice does not say as to which category of service the said amount would be liable to Service Tax. So also, it is not stated whether the amount is consideration for Steamer Agency Service. The Show Cause Notice does not propose to include the amount under particular category of service and demand the Service Tax under any category. The Adjudicating Authority has not made any finding as to whether the excess amount collected would be consideration for service. The Show Cause Notice is the foundation of the litigation. When the Show Cause is insufficient as to clarify the category of service, the demand cannot sustain and requires to be set aside.
The impugned order is set aside - The appeal is allowed
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2024 (3) TMI 1282 - CESTAT BANGALORE
Service or not - levy of service tax - collection of liquidated damages for supply of goods and services beyond the due date as per the agreement entered into with various suppliers and service providers - HELD THAT:- The issue is squarely covered by the judgement of the Principal Bench of this Tribunal in appellant’s own case for Bhopal / Dehradun Unit. Referring to the earlier judgment of the Tribunal on the same issue, it is observed The amount cannot be made liable to tax in the name of it being consideration for providing deemed service.
The judgment have been accepted by the Board vide Circular No.214/2023-S.T. dated 28.02.2023.
The impugned order is set aside and the appeal is allowed.
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2024 (3) TMI 1281 - CESTAT BANGALORE
Levy of service tax - Life Insurance Service - premium collected by the appellant for providing life insurance service to its employees - Renting of Immovable Property Service or not - amount received towards renting of immovable property - HELD THAT:- Undisputedly, the appellant is a department of Karnataka State Government and not an insurance company and in pursuance to the Karnataka Government Servant’s (Compulsory Life Insurance) Rules, 1958 under the welfare scheme applicable to all Government employees irrespective of their status, collected contribution of 6.5% of mean pay as monthly premium towards the policy. The Service Tax Department proposed to levy service tax on the premium so collected by the appellant. On the said issue, this Tribunal in appellant own case, considering the Circular dt. 18/12/2006 issued by the Board, held that the amount of premium collected in rendering life insurance service is in the nature of sovereign function and not leviable to service tax - there are no reason not to follow the aforesaid finding of the Tribunal as no contrary decisions have been placed by the Revenue.
Levy of service tax on renting of immovable property - HELD THAT:- The appellant is not contesting the same and also covered by the judgment of the Hon’ble Supreme Court in the case of KRISHI UPAJ MANDI SAMITI, NEW MANDI YARD, ALWAR VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, ALWAR [2022 (2) TMI 1113 - SUPREME COURT]. Since the issue relates to interpretation of law relating to applicability of service tax on ‘Renting of Immovable Property Service’ during the period in question and conflicting opinions on the subject expressed, levy of penalty for non-payment of service tax on the said service cannot be sustained.
The demands relating to service tax on life insurance service provided to the employees are hereby dropped and service tax on renting of immovable property in both the appeals are confirmed with interest. However, penalties imposed for failure to discharge service tax on renting of immovable property are hereby dropped. The impugned orders are modified - Appeal disposed off.
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2024 (3) TMI 1280 - CESTAT KOLKATA
Demand of service tax - SSI exemption - Construction of boundary and main gate at the sub-station at Dhaka and Gopalganj - time limitation - demand alongwith interest and penalty - HELD THAT:- The impugned order has confirmed the demand of service tax of Rs.78,341/- on the amount of Rs.21,60,967/- received by the Appellant from PGCIL. Out of this Rs.14,78,589/- was shown to have been received by the Appellant on 10.05.2008, but the Appellant submitted that this amount has been received on various dates in the year 2004-05 - the submission of the Appellant is agreed upon, that the amount of Rs.14,78,589/- was not received on 10.05.2008, but on various dates in the year 2004-05. Hence, the Notice issued on 30.09.2011 demanding service tax on these amounts received in 2004-05 is barred by limitation. Accordingly, the demand confirmed on this amount is set aside.
It is observed that the amount of Rs.1,27,505/- and Rs. 2,05,234/-, totally amounting to Rs. 3,32,739/-, was received by the Appellant in the Financial Year 2006-07 and the amount of Rs.3,49,639/- was received in the Financial Year 2007-08. In both the Financial years 2006-07 and 2007-08, their turnover was below the threshold limit of Rs.10 lakhs. Accordingly, no service tax is payable by the Appellant on these receipts.
Interest and penalty - HELD THAT:- The demand of service tax confirmed in the impugned order is not sustainable. Since the demand of service tax is not sustainable, the question of demanding interest and penalties under sections 77 and 78 does not arise.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 1232 - MADRAS HIGH COURT
Violation of principles of natural justice - non-service of impugned order - no proof of service of order - HELD THAT:- On examining the Order-in-Original, it follows that the Special Leave Petition filed by the tax authorities against the order of the Telangana and Andhra Pradesh High Court was dismissed by the Hon'ble Supreme Court in [2019 (7) TMI 1975 - SC ORDER]. Consequently, the judgment of the Telangana and Andhra Pradesh High Court holds the field as on date. In these circumstances, it is just and appropriate that the petitioner be provided with an opportunity to contest the tax demand. It should also be noticed, in this regard, that there is no proof of service of the impugned order on the petitioner.
The impugned order is quashed and the matter is remanded for reconsideration by the 1st respondent. The 1st respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of a copy of this order - Petition disposed off.
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2024 (3) TMI 1231 - CESTAT CHANDIGARH
Levy of service tax - Business Support Service - joint venture - setting up clean development mechanism electricity (CDM) Co-generation plant of 20 MW on Build, Own, Operate and Transfer (BOOT) basis to improve energy efficiency and to reduce steam consumption - HELD THAT:- On going through the definition of the taxable service it appears that the term “Infrastructure Support Service” includes providing of office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services etc. A clear takeaway from the definition of “Business Support Service” is that it is in the nature of outsourced work which necessarily presupposes deployment of services as well as personnel to help the business of the other person. In the instant case, no such outsourcing of work by M/s a2z Ltd to the appellant is visible. It is clear from the wordings of the definition that one party, the provider of the service should render service to support the business of the other party, that is the recipient of the service. However, in the instant case, it is found that no such arrangement is visible.
The MOU between the appellants and the M/s a2z is on a principal-to-principal basis and not on the basis of a service provider and the client. We find that while rendering a service may result in the payment of a consideration, monetary or otherwise, the vice versa is not true. Department seriously erred in viewing every consideration to be necessarily for rendering a service.
On going through the provisions of the statute, board’s clarification and the terms of the MOU, it is opined that deposit of Rs. 50,00,000/- received by the appellants from M/s a2z is not any consideration for the provision of any service. The nature of relationship between the appellant and M/s a2z is on the principal-to-principal basis and therefore, similar to a “Joint Venture”. The arrangement is mutually beneficial.
The impugned order does not stand the scrutiny of law and therefore is not legally maintainable and requires to be set aside - Appeal allowed.
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2024 (3) TMI 1230 - CESTAT NEW DELHI
Claim of Interest on Refund of pre-deposit (amount as was deposited in terms of Section 35F of the Finance Act) - rejection on the ground that the amount of interest on the refund claim as was already sanctioned to the appellant - HELD THAT:- It is held that Commissioner (Appeals) has wrongly relied upon the pre amended Section 35FF for denying the entitlement of interest to the appellant. The appellant is held entitled for the same. The decision of Hon’ble Apex Court in the case of Commissioner of Customs (Import), Raigad vs M/s. Finacord Chemicals (P) Ltd. [2015 (5) TMI 371 - SUPREME COURT] while discussing the liability of the department to pay the interest has referred to Departments' own circular dated 02.1.2002 wherein the Board clarified that the matters of refund other than the amount of duty would not be covered under the provisions of Section 11B of Customs Act or Section 35FF of Central Excise Act. It was held by the Hon'ble Apex Court that in such cases of refund even the concept of unjust enrichment is not applicable.
Rate of interest - HELD THAT:- No doubt the department has relied upon a notification of 2014 and as per the Section 35FF also, the rate of interest has to be more than 5% but less than 36%, however, subject to a re-notification. The above decision of Hon’ble Apex Court in M/s. Finacord Chemicals (P) Ltd. [2015 (5) TMI 371 - SUPREME COURT] which is subsequent to the said notification. Applying the said matrix, the appellant entitled for interest at the rate of 12%. The decision of Hon’ble High Court is found not applicable to the given set of circumstances. The provision involved in the said decision is the Section 129 EE of the Customs Act - the appellant is held entitled for interest from the date of deposit to the date of payment at the rate of 12%.
Appeal allowed.
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2024 (3) TMI 1229 - CESTAT KOLKATA
Refund of Service Tax - Principles of unjust enrichment - Department took the view that the Appellant has not discharged onus of showing that unjust enrichment clause is not applicable in that case - HELD THAT:- The Credit Notes issued by the Public Limited Company is a proper document wherein the transaction towards credit given to their customers is properly recorded. These Credit Notes form part of their P & L Account and Balance Sheet. Therefore, the Credit Notes cannot be taken as a piece of paper as has been held by the Commissioner (Appeals). However, the veracity of the same can definitely be checked and verified before it is accepted as a proper document.
As per judgment in COMMISSIONER OF CENTRAL EXCISE, MADRAS VERSUS M/S ADDISON & CO. LTD. [2016 (8) TMI 1071 - SUPREME COURT], since the person who has initially bought the goods would have already charged the full amount on the end customer, if subsequent discount is granted to the person, there is no possibility for that discount to be passed on the end customer. Because of this reason, the Supreme Court has held that unjust enrichment clause will be applicable and no refund can be granted in that case - In the present case, the refund is purely on account of erroneously paid Service Tax. The only way unjust enrichment can get attracted is if the receiving client takes the Cenvat Credit. If it is established that no Cenvat Credit has been taken by the client, there would be no case of unjust enrichment. Therefore, it is found that in the present case, the case law of Addison is not applicable.
From the documentary evidence produced, it is felt that they should be given an opportunity to produce all these documents before the Adjudicating Authority. In view of the forgoing, the matter remanded to the Adjudicating Authority directing him to follow the principles of natural justice and decide the issue within four months from the dated of communication of this order.
Appeal disposed off by way of remand.
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2024 (3) TMI 1180 - BOMBAY HIGH COURT
Rejection of the Petitioner’s Application filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground that the amount of tax is not quantified before 30th June 2019 and investigation is going on - HELD THAT:- It is thus seen that the Department has taken a clear position that the duty liability admitted by any person during enquiry, investigation or audit would amount to making him eligible for the benefits of the scheme. Such interpretation, as made by the Department, has also become relevant in terms of Section 121(r), which defines the term quantified. Section 125 (1) (e), as referred, clearly sets out that an assessee, who has been subjected to an enquiry or investigation or audit, and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019, would not make him eligible to take the benefit of the scheme. However, in the present case, the duty was quantified much prior to the cut off date of 30th June 2019.
The rejection, as generated by the electronic system, appears to be not correct, and would be required to be held to be illegal considering the clear position as brought out by the terms and conditions of the Scheme, and the clarification of the Scheme as issued by the Circular of the Revenue dated 27th August 2019.
The Petitioner was clearly eligible to avail benefits of the Scheme and the rejection, as impugned, is illegal - Petition allowed.
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2024 (3) TMI 1179 - CESTAT NEW DELHI
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 - CESTAT NEW DELHI
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 - CESTAT AHMEDABAD
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 - CESTAT CHENNAI
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 - CESTAT CHENNAI
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 - CESTAT KOLKATA
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 - CESTAT AHMEDABAD
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 - CESTAT KOLKATA
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 - CESTAT NEW DELHI
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 - DELHI HIGH COURT
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 - CESTAT NEW DELHI
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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