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Service Tax - Case Laws

Showing 181 to 200 of 31546 Records

• 2025 (6) TMI 598
  

  Liability of appellant to pay service tax on advances received from customers prior to rendering services - correct point of levy of Service Tax - entitlement to the benefit of cum-duty valuation - invocation of extended period of limitation - levy of equal penalty - HELD THAT:- Regarding the cum-duty benefit the appellants have submitted that this Bench has already take a view in the case of M/s. Crimson Foods [2025 (4) TMI 959 - CESTAT CHENNAI] relying the Hon’ble Apex Court in the case of Advantage Media Consultants [2008 (10) TMI 570 - SC ORDER], it is found that this Bench has held in the case of M/s. Crimson Foods that [2025 (4) TMI 959 - CESTAT CHENNAI]

  Extended period of limitation - imposition of equal penalty - HELD THAT:- Other than alleging that the appellants have suppressed the facts etc., Revenue has not come up with any evidence showing any positive act on the part of the appellants in order to invoke extended period of limitation. The Tribunal and Courts in a catena of cases held simple non-payment of tax would not amount to suppression of facts and there should be a positive act on the part of the appellant with intent to evade payment of tax. Therefore the extended period is invokable in the impugned case before us; we also come to the conclusion keeping in mind that the appellants have deposited the applicable duty before the Lower Authorities even before the confirmation of the demand raised - the imposition of penalty does not survive and is liable to be set aside.

  Conclusion - i) The adjudicating authority ought to have granted cum-tax benefit in respect of the demand confirmed vide the impugned orders. ii) Where Service Tax is not separately charged, the valuation should be considered inclusive of tax.

  Both the issues are decided in favour of the appellant, the appeal is allowed.

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• 2025 (6) TMI 597
  

  Rebate claim - Export of services or not - activity of the appellant in providing marketing services to Heildelberg International within the territory of India - rejection of entire rebate claims on the ground that the appellant had not satisfied the condition No. 2 of Export of Service Rules, 2005 which states that services should be performed outside India, the service was fully performed and consumed in India - HELD THAT:- This issue has been examined in vide Circular No. 111/5/2009 dated 24.02.2009, which is self-explanatory where it is held that 'For the services that fall under Category III [Rule 3(1)(iii)], the relevant factor is the location of the service receiver and not the place of performance. In this context, the phrase ‘used outside India’ is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, for Category III services [Rule 3(1)(iii)], it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India. In all the illustrations mentioned in the opening paragraph, what is accruing outside India is the benefit in terms of promotion of business of a foreign company. Similar would be the treatment for other Category III [Rule 3(1)(iii)] services as well.'

  Boards circular and the judgments make it clear that since the benefit of the 'Business Auxiliary Services’ rendered by Heidelberg India accrues outside India to Heidelberg International, it amounts to an export of service making the appellant eligible for rebate on Service Tax claimed. It is a well-accepted norm of judicial discipline that a Bench of lesser quorum / strength should follow the view taken by Bench of larger quorum / strength, in a case whose ratio covers the legal issue involved in the impugned matter.

  Conclusion - i) Export of Business Auxiliary Services depends on the location of the recipient and benefit accrual, not the physical place of service performance. ii) Services rendered by Indian agents to foreign principals for marketing and related activities qualify as export of services if payment is received in convertible foreign exchange and benefits accrue outside India. iii) Rebate of service tax under Notification No. 11/2005 and Rule 5 of the Export of Service Rules is available for such exported services.

  The impugned order set aside - appeal allowed.

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• 2025 (6) TMI 596
  

  Levy of service tax - inclusion of the amount of notional interest on the security deposits collected by the appellant - HELD THAT:- The Tribunal decided the issue raised in the batch of 5 appeals, as to whether the Department could have charged service tax on the notional interest towards security deposit taken by the appellant against the renting of safe deposits and private lockers.

  Referring to the provisions of Section 67 of the Finance Act, 1994 and the decision of the Tribunal in Murli Realtors Pvt. Ltd. Vs. Commissioner of Central Excise, Pune-III [2014 (9) TMI 461 - CESTAT MUMBAI] held that since the consideration for leasing of the property is rent, so what can be levied to service tax is only rent and notional interest on the security deposit cannot be subjected to levy of service tax.

  The appeal before the Tribunal in the aforesaid case related to the period April, 2006 to March 2012, where the appeal filed by the appellant was also considered. The present appeal is related to the subsequent period from 2012-13 to 2015–16 and hence what has been decided is squarely applicable in the present appeal. Hence no service tax could be levied on the notional interest calculated by the Department and the interest free security deposit collected by the appellant.

  Conclusion - No service tax could be levied on the notional interest on interest-free security deposits collected by the appellant in relation to renting safe deposit lockers.

  The impugned order, therefore, deserves to be set aside and is hereby quashed - appeal allowed.

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• 2025 (6) TMI 595
  

  Levy of service tax - royalty amount received for granting a license to use trademarks under a novation agreement dated 24.02.2010 - refund of the amount of service tax paid after executing the novation agreement - sale or deemed sale.

  Whether the service tax was leviable on amount of royalty received by M/s. BCCL for grant of license in favour of M/s. BCL to use the trademark or not? - HELD THAT:- The transfer of property in goods is sale. In addition, the transactions where there may not be a conventional transfer of property in goods but a transfer of right to use the goods also got included to be called as sale of goods/the ‘Deemed Sale’. It is also observed that the term “transfer of right to use goods”, as got coined with the said 46th Amendment, is not defined in the Constitution nor it is defined in any other statute. The said phrase for the first time got interpreted by Hon’ble Supreme Court of India in the case of Bharat Sanchar Nigam Ltd. Vs. Union of India [2006 (3) TMI 1 - SUPREME COURT] wherein the Hon’ble Apex Court enunciated following five attributes for a transaction to constitute a “transfer of right to use the goods”.

  The ‘Intellectual Property Rights’ are held equivalent to goods. Support drawn from the decision of this Tribunal in the case of Commissioner of Service Tax, Delhi-II Vs. Future Brands [2022 (9) TMI 436 - CESTAT NEW DELHI], wherein it was held that the exclusive license to use the trademark would qualify as “transfer of right to use the goods” and would be covered by article 366 (29A) (d) of the Constitute of India.

  It is not inclined to accept the contention of the department that the transaction does not amount to permanent transfer of goods hence will amount to rendering of service. It is rather held that the impugned transaction arising out of novation agreement dated 24.02.2010, the parties to the said agreement agreed to enter into the transaction of ‘Deemed Sale’ as different from it being called as declared service as the transferee M/s. BCL was allowed to use IPR/goods to the exclusion of the transferor i.e. M/s. BCCL.

  The service tax was not leviable on amount of royalty received by the appellants M/s. BCCL. The demand is held to have been wrongly confirmed qua the appellant. This issue stands decided in favour of the appellants.

  Whether the appellant is entitled for the refund of the amount of service tax paid after executing the novation agreement dated 24.02.2010? - HELD THAT:- The appellant was restrained to use the said trademark during the said period in any territory of the world and as such the transaction was a transaction of ‘Deemed Sale’ inviting no service tax liability. Hence, the amount paid by the appellant for which refund has been claimed was the amount not towards the duty but was an amount wrongly deposited by the appellant. It is also observed that the Commissioner (Appeals) has upheld the rejection of refund announced by the original adjudicating authority on the ground of unjust enrichment. Apparently and admittedly, the appellant had collected service tax for the relevant period. There is no evidence produced on record to show the reversal of the said amount. Hence, there are no infirmity when the doctrine of unjust enrichment has been invoked for rejecting the said refund claim.

  Apparently and admittedly, the appellant had collected service tax for the relevant period. There is no evidence produced on record to show the reversal of the said amount. Hence, there are no infirmity when the doctrine of unjust enrichment has been invoked for rejecting the said refund claim.

  Conclusion - i) The service tax was not leviable on amount of royalty received by the appellants M/s. BCCL. ii) The amount paid by the appellant for which refund has been claimed was the amount not towards the duty but was an amount wrongly deposited by the appellant. However, since the appellant had collected service tax for the relevant period and there is no evidence of reversal, the doctrine of unjust enrichment applies and refund claim rightly rejected.

  Appeal allowed.

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• 2025 (6) TMI 594
  

  Invocation of extended period of limitation - Short payment of Service Tax - Erection, Commission or Installation Service - denial of benefit of N/N. 1/2006-ST dated 01.03.2006 - HELD THAT:- Admittedly the appellant is registered with the Service Tax department and paying Service Tax and filing their ST3 returns in time claiming the benefit of Notification No. 1/2006-ST dated 01.03.2006. In that circumstances the Show Cause Notice issued on 18.07.2011 for the period 01.03.2006 to 31.03.2010 is barred by limitation. The same view was taken by this Tribunal in the case of Arya Logistics [2023 (8) TMI 853 - CESTAT AHMEDABAD] wherein this Tribunal observed that 'The appellant have maintained proper books of account in the normal course of business. It is pertinent to note that the entire case of the department on merit is that since appellant have availed Cenvat Credit, they violated the condition of abatement Notification No. 1/2006-ST. As discussed above the facts that availment of Cenvat Credit and payment of Service Tax on the abated value were declared in the ST-3 return. Hence, having all the facts were disclosed to the department, nothing prevented department from issue of show cause notice within normal period of one year. Therefore, the demand raised in the show cause notice is clearly time barred.'

  As appellant has admitted certain demand amounting to Rs. 4,19,734/-the same is appropriated from the amount already paid by the appellant amounting to Rs. 7,00,000/-. In the facts and circumstances of the case no penalty is imposable on the appellant.

  Conclusion - i) The SCN issued invoking extended limitation period was barred by limitation and set aside. ii) Demand for short payment admitted by appellant was accepted and adjusted. iii) No penalty was imposed on the appellant.

  Appeal disposed off.

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• 2025 (6) TMI 533
  

  Entitlement to benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - only ground taken by the respondents is that since the time of the scheme is over, therefore, the petitioner is not entitled to avail the benefit thereunder - HELD THAT:- The Madras High Court, Bombay High Court, Gujarat High Court and Delhi High Court have held that though the notification dated 14.05.2020 extended the time limit for payment under the SVLDRS up to 30.06.2020, having regard to the prevailing COVID-19 pandemic, the petitioners-assessees therein would be entitled to extension of time.

  In Apnaa Projects's case [2022 (9) TMI 1003 - MADRAS HIGH COURT], the Madras High Court held that 'since the petitioner has admittedly approached the respondents and expressed its readiness to remit the amount on 31.07.2020, it is entitled to extension of time and is permitted to make the remittance along with interest @ 15% from 01.07.2020 to date of remittance, that must be within a period of four weeks from the date of receipt of this order, for which purpose, the website shall be enabled forthwith.'

  In Cradle Runways's case [2024 (8) TMI 155 - BOMBAY HIGH COURT], the Bombay High Court held that 'Looking at the objective for which the SVLDR Scheme was introduced and the fact that there was a technical glitch in making the payment cannot be ignored. Furthermore, Petitioner could not be said to have had any mala fide intention in delaying the payment by one day, since the challan generated stated the expiry date as 1st July 2020. Petitioner was, therefore, under a bona fide belief that he could make the payment on 1st July 2020 which admittedly he has paid on said date.'

  A perusal of the impugned order would indicate that the sole ground on which the case of the petitioner has been rejected by the respondents is that the scheme had come to an end. However, with regard to the extension of limitation referred to herein above and the coupled with the fact that the judgments rendered by the Hon’ble High Courts of Madras, Bombay, Gujarat and Delhi, granting benefits of SVLDRS in favour of the petitioner/assessee therein on the ground of the prevailing COVID-19 pandemic, even cases where payments were made subsequent to 30.06.2020, the impugned order rejecting the case of the respondents cannot sustain and deserves to be quashed and necessary directions are required to be issued to the concerned respondents to accept the payment made by the petitioner and issue discharge certificate in its favour.

  Therefore, on the facts of the present case, denying the benefits of SVLDR Scheme would not only contrary to object of the scheme but also would also be injustice to the petitioner declarant who otherwise was eligible.

  Whether the provisions under the Finance Bill with regard to the fixation of time limit for availing the benefit of scheme and with regard to extension of time for making payment of tax are directive in nature? - HELD THAT:- This precise question has been considered by the learned Single Judge of Madras High Court in N. Sundarajan vs. Union of India & Ors. [2023 (11) TMI 899 - MADRAS HIGH COURT], wherein the scheme was held to be directive.

  Conclusion - This Court is of the considered view that the petitioner deserves to be granted another chance to make the payment after associating it so as to arrive at the amount due payable.

  The Annexures P-17 and P-18 i.e. demand notices 9 SVLDRS-3 Forms issued on 28.01.2020 (forming part of Annexure P-12 (Colly), 9 SVLDRS-3 Forms issued 25.02.2020 and letter Annexure P-15 whereby the respondent department has upheld its calculation, are quashed and set aside - Petition allowed.

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• 2025 (6) TMI 532
  

  Levy of service tax - payments relating to travelling, conveyance and stay made by the appellant to their foreign licensor - IT support services were to be classified as OIDAR services or not.

  Whether the payments relating to travelling, conveyance and stay made by the appellant to their foreign licensor were liable to pay service tax and the period of disputes are 2008-2009 and 2009-2010 - HELD THAT:- The demands for the period 2004-2005 to 2007-2008 was set aside by this Tribunal in TOYOTA KIRLOSKAR AUTO PARTS PVT. LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE (APPEALS) (LTU) BANGALORE [2024 (6) TMI 1469 - CESTAT BANGALORE] wherein the Tribunal held that 'the expenses incurred by the appellant towards travel, conveyance and stay of the foreign trainers cannot be included in the value, since these expenses are not towards the provision of ‘such service’ has defined in Section 67 of Finance Act, 1994. Therefore the expenses incurred by the appellant are not includable in the taxable value, consequently the differential duty demanded and confirmed by the adjudicating authority is not legally tenable, hence the impugned order is liable to be set aside and we do so.'

  Whether the IT support services were to be classified as OIDAR services and whether the appellant is liable to be service tax on the same? - HELD THAT:- This issue also stands settled in favour of the appellant in their own case for the previous period vide Final Order. No. 21535/2024 dated 13.12.2024 [2025 (1) TMI 539 - CESTAT BANGALORE] wherein this Tribunal held 'From the contract, it is evident that the Toyota Motor Asia Pacific Pte Ltd, Singapore is not involved in the generation or the usage of data. In these circumstances, when Toyota Motor Asia Pacific Pte Ltd, Singapore maintains the functioning of the network, we cannot say that Toyota Motor Asia Pacific Pte Ltd, Singapore ‘online information and data access or retrieval’ services to the appellant to demand service tax under Reverse Charge Mechanism (RCM). Since the issue is squarely covered by the decisions as stated above, the appeal filed by the appellant is sustainable.'

  The demands in the impugned orders cannot be sustained - Appeal allowed.

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• 2025 (6) TMI 531
  

  Refund of service tax paid towards services received for export of finished goods - Compliance with the conditions of refund claim under N/N.17/2009-ST dated 07.07.2009 or not - HELD THAT:- On scrutiny of the refund application, it is evident that the appellant had furnished the entire details as required for processing the refund claim and adjudicating authority had rightly held that the appellant is eligible for the refund and partially allowed the refund claim. In the absence of any condition in the Notification No.17/2009-ST dated 07.07.2009, claim cannot be rejected as done by the appellate authority.

  Considering the above, the impugned order is set aside and the appeal is allowed with consequential relief, if any in accordance with law.

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• 2025 (6) TMI 520
  

  Demand barred by time limitation or not - appellant is an intermediary as defined in Rule 2(f) of the Place of Provision of Services Rules, 2012 or not - Export of Services as per Rule 6A of the Service Tax Rules, 1994.

  HELD THAT:- The question of limitation goes to the root of the matter and involves a question of jurisdiction to raise the demand itself in the first instance. This in turn is premised on the provisions of law that prescribe the situations as well as the attendant ingredients thereto that attract its application. The findings of fact on the question of jurisdiction would be a jurisdictional fact. Such a jurisdictional question therefore needs to be examined and is to be determined having regard to both the facts and law involved therein. To appreciate whether the demand is wholly barred by limitation, it would therefore be appropriate to reproduce section 73(1) of the Finance Act,1994 as it stood at the relevant time. This section deals with recovery of service tax not levied or paid or short levied or short paid or erroneously refunded.

  From a perusal of sub-section (1) of section 73 of the Finance Act, it can be seen that where any service tax has not been levied or paid, the Central Excise Officer may, within thirty months from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice.

  Allowing the assessee to self-assess the tax is a mere facility extended to the assessee. That in no way detracts or dilutes the statutory responsibility of the jurisdictional central excise officers to ensure correctness of the assessment, exemptions claimed and duty payments made. In the instant case, on a perusal of the ST-3 returns available as part of the Appeal records, we find that in the ST-3 returns filed regularly, the Appellants have, under PART B, titled “VALUE OF TAXABLE SERVICE AND SERVICE TAX PAYABLE”, against B1.8 titled the “amounts charged against export of service provided or to be provided”, duly indicated the amounts in respect of each month in the appropriate place provided for such declaration - The mandate of the statute, as laid down in Section 14 of the Central Excise Act, 1944, made applicable under Section 83 of the Finance Act, 1994 in relation to service tax as they apply in relation to a duty of excise, empowers the jurisdictional range officers to issue summons requiring any person to give evidence or produce records etc., and can be resorted to by the said officers in the course of performance of their official duties as per extant Departmental instructions, if it so becomes necessary.

  There is a catena of decisions in similar vein wherein, various High Courts as well as this Tribunal, have consistently held that when the assessee is registered and filing returns regularly, the range officer had a duty to scrutinize returns and detect any irregularity and to raise pertinent queries in this regard and that in the light of any negligence or failure to do so, the allegation of suppression by the assessee cannot be countenanced.

  When the appellant held a bonafide belief that its services were not liable to tax being export of services and had in fact declared the amounts received as towards export of service provided, there cannot be a finding of wilful misstatement or suppression of facts with intent to evade payment of duty attributable to the Appellant.

  On a perusal of the ST-3 returns available as part of the Appeal records, we have found that in the ST-3 returns filed regularly, the Appellants have duly indicated therein, the amounts charged against export of service provided in the appropriate place provided for such declaration. The appellant has also indicated the consequent net taxable value as well as the service tax payable, pursuant to the said particulars indicated in the ST 3 returns. The present matter covers the dispute period from October 2014 to June 2017 whereas the SCN was issued only on 29.06.2020. The appellant had filed Service Tax returns for this period on 21.07.2015, 20.10.2015, 22.04.2016, 24.10.2016, 25.04.2017 and 11.08.2017 respectively as is evidenced by the ST-3 returns - when the invoking of extended period of limitation was not available to the Department considering the fact that the appellant had declared the amounts received as towards export of service in the ST 3 returns and the said fact was in the knowledge of the department, therefore, the SCN issued on 29-06-2020 is beyond the normal period of limitation and the entire demand is barred by limitation. The normal period of thirty months when calculated in the reverse from the date of issuance of the SCN which is on 29-06-2020, which could at best have been covered, is only if there was a demand for the period from January 2018 onwards alone. In the present case the service tax returns were all filed well before January 2018 and the period under dispute is also only upto June 2017.

  The confirmation of the demand of service tax in the instant case, which was for the period from 01.10.2014 to 30.06.2017, was entirely barred by limitation and is therefore wholly unsustainable and is liable to be set aside.

  Given the findings that the extended period of limitation was not invokable and that the demand was wholly barred by limitation, it is disinclined to now go into the merits of the dispute.

  Conclusion - i) The appellant had declared the amounts received as towards export of service in the ST-3 returns filed with the Department, and the said fact was in the knowledge of the department. Therefore, the SCN issued on 29-06-2020 is beyond the normal period of limitation and the entire demand is barred by limitation. ii) Once the demand is held barred by limitation, there is no occasion to adjudicate the merits of the dispute.

  Appeal allowed.

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• 2025 (6) TMI 519
  

  Taxable service or revenue sharing arrangement - whether the appellant has provided the taxable service of “renting of immovable property service” in respect of the lands that the appellant has leased out to Shri. M. Palanisamy (lessee)? - demand of service tax made on the appellant along with applicable interest and penalties - invocation of extended period of limitation.

  HELD THAT:- The appellant has leased 22.68 acres of vacant land owned by it to Shri. M. Palanisamy, the lessee by way of a registered lease deed dated 11th February 2010 with the lease agreement being valid from 29.01.2010 for a period of five years and a yearly lease amount of Rs.22,680/- to be paid at the beginning of every year. On 29.01.2010 itself, the appellant enters into a separate notarized agreement in respect of the same 22.68 acres of vacant land owned by it, evidencing the agreement that as there are some sources and assets in the above-mentioned property, apart from the above mentioned yearly lease amount to the appellant, Mr. Palanisamy assures that seventy five percent of the receipts will be paid to the appellant every month as additional lease amount. It is also pertinent that the said notarized agreement of 29.01.2010 also stipulates that that if Mr. M. Palanisamy wishes to extend the duration and validity of the lease, it can be informed to the appellant and with the decision from the board of the appellant, it can be extended.

  The quantification of the lease amount in terms of the receipts of the lessee, and as seventy five percent of the receipts, cannot and does not divest the said additional lease amount of its intrinsic character of rent, when the said additional lease amount is paid by the lessee to the appellant.

  The agreement executed by the appellant along with the lessee Mr. Palanisamy and the District Collector, Coimbatore is at the behest of the mandate of the Government and the title reflects the purpose of the agreement entered into, namely, as that for quarrying and carrying away minor minerals by Lessees, which in this case is Mr. M. Palanisamy, and which minerals in such ryotwari lands belong to the Government. This agreement too bears out the fact situation that the appellants are the registered holders of the land which the appellants have leased out to the lessee Mr. Palanisamy and it is to Mr. Palanisamy, pursuant to his application to the collector of Coimbatore District seeking grant of quarrying lease for quarrying Rough Stone in the said lands, that the said Collector on behalf of the Government has granted a quarrying lease to the lessee for the purpose applied for.

  The quantification of the lease amount in terms of the receipts of the lessee, and as seventy five percent of the receipts, cannot and does not divest the said additional lease amount of its intrinsic character of rent, when the said additional lease amount is paid by the lessee to the appellant in terms of an agreement which characterizes the transaction between the parties not only as lease of land detailed therein but also stipulates further that if Mr. M. Palanisamy (the lessee) wishes to extend the duration and validity of the lease, it can be informed to the appellant and with the decision from the board of the appellant, it can be extended. Further, all subsequent documents including the certificate for exemption from payment of TDS on rent reveal that the transaction has only been presented as renting of immovable property before statutory authorities such as Income Tax Authorities as well as State Authorities such as the District Collector of Coimbatore. Evidently it is such presentation of facts that has been reflected as such in the joint agreement entered into by the appellant, the lessee and the District Collector wherein it is indicated that appellant is the owner and lessor of the land which is being leased out to the lessee Shri. M. Palanisamy.

  The contention of the appellant that it is a revenue sharing agreement has been shown to be without any basis. Further the contention of the appellant that liability is solely on the nomenclature and accounting treatment is incorrect - On a plain reading of the agreements, nowhere is it forthcoming that the appellant and the lessee have understood the said agreements being entered into as contracts for mining and sale of minerals on a principal-to-principal basis. The agreements do not state that they are a contract for joint business enterprise of mining and selling of minerals. The appellant Trust has averred before the Collector, Coimbatore that it is only the registered Holder of land and it is Shri. M. Palanisamy as the Lessee who has sought permission for quarrying rough stones. The agreement nowhere reflects that the appellant has a say in the management of mining operations by the lessee or in the administrative decision making related to day-to-day mining operations by the lessee when it carries out the mining activities.

  Thus, as per Section 65B(44), “Service” means any activity carried out by a person for another for consideration, and includes a declared service; Section 66E(a) stipulates “renting of immovable property” as a declared service; and Section 65B(41) "renting" means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property. Thus, the leasing of the vacant lands by the appellant to the lessee Mr. M. Palanisamy, comes within the ambit of the definition of “renting” as defined in Section 65B(41). Since the term “activity” means something that a person does, the leasing of vacant lands done by the appellant is an “activity” being carried out by the appellant - such activity of leasing of vacant lands by the appellant to Mr. Palanisamy, for receipt of annual lease amount and additional lease amount, qualifies as any activity carried out by a person for another for consideration, and thus comes within the ambit of the definition of “service.” The vacant lands being immovable property, such leasing of vacant lands by the appellant to Mr. Palanisamy fall more specifically under “renting of immovable property” and is thus a declared service under Section 66E(a).

  Further, since the negative list of services given in Section 66D (d) (iv), in so far as renting is concerned, lists only services relating to agriculture or agriculture produce by way of renting, it is evident that the “renting of immovable property” carried out by the appellant in respect of the vacant lands leased out to Mr. M Palanisamy does not come under the negative list of services - the demand of service tax confirmed by the adjudicating authority in the impugned order in original is correct and tenable in law.

  Extended period of limitation - HELD THAT:- The deliberate act of withholding the fact of receipt of additional lease amount is the positive act of suppression that the appellant has indulged in and such act coupled with the appellant’s failure to declare the receipt of additional lease amount and pay the service tax due thereon while declaring only the remaining rent amount collected for the relevant period of the return and paying tax only to that limited extent, is clearly tantamount to willful suppression and misstatement of facts with intent to evade payment of duty, especially when such additional lease amount that the appellant has received runs into crores of rupees - thus, the extended period of limitation has been rightly invoked in respect of the first show cause notice.

  Levy of penalty - HELD THAT:- The indisputable fact is that the appellants are acquainted with the provisions of law relating to renting of immovable property being an assessee registered for providing precisely the said service and therefore cannot feign ignorance of law on this aspect. It is an indisputable fact that the agreements entered into indicate that the lessee has to pay additional lease amounts - there is no rationale, rhyme or reason for the appellant not to declare such additional lease amounts as rent in the ST-3 returns and pay tax thereon. Thus, neither was there any scope to consider the matter as an issue involving interpretation nor was there any scope to claim that there was a reasonable cause for not discharging the service tax dues on such additional lease amounts received by the appellant for such renting of vacant lands - This is not a fit case to invoke section 80 and extend the benefits thereof.

  The adjudicating authority, noticing that the details of the transactions and that of the lease rent payments were available in the financial records, have extended the benefit of reduced penalty of fifty percent of the service tax not paid as has been provided for in such circumstances under the first proviso to section 78 (1) of the Finance Act, 1994 in respect of the penalty imposed with respect to the first show cause notice - As regards the second show cause notice, the adjudicating authority has imposed a penalty under Section 76 of the Finance Act, 1994 which stipulates that the penalty shall not exceed 50% of the service tax payable. It is also pertinent that this is not the case of invoking Section 78 and 76 simultaneously, as there are two SCNs spanning two different periods and the separate penalties under Section 78 and Section 76 have been invoked for the different periods - The penalty imposed under Section 77(2) of the Finance Act is also commensurate with the violations found.

  Conclusion - The Department has discharged its onus and has brought home the charges as alleged. The appellant has provided the taxable service of “renting of immovable property service” in respect of the lands that the appellant has leased out to Shri. M. Palanisamy (lessee) and consequently, the demand of service tax made on the appellant along with applicable interest and penalties as imposed, are tenable in law.

  Appeal dismissed.

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• 2025 (6) TMI 457
  

  Non-payment of service tax - mis-match in the gross amount declared in the ITR/TDS Returns from the services vis-à-vis Service Tax Returns for the corresponding period - entitlement to benefit of abatement of 60% on Rent-a-Cab services under Sr. No. 9 of N/N. 26/2012-ST dated 20.06.2012 - Requirement to pay service tax only on 40% of the value of such services - the impugned order passed without properly appreciating the facts and the law - violation of principles of natural justice - interest - penalties - HELD THAT:- The learned Commissioner (Appeals) has observed in 6.3.1 of the impugned order that in respect of services provided by the appellant to Punjab State Sports Council, Punjab Energy Development Agency and National Company Law Tribunal, the appellant is eligible for benefit of abatement on the taxi services while paying service tax in terms of Sr.No. 9 of the N/N. 26/2012-ST dated 20.06.2012. The learned Commissioner (Appeals) has further noted in the impugned order that the benefit to pay service tax on an abated value is conditional and the appellant has not submitted anything on the conditional aspect to avail the benefit of the above notification; the appellant has simply stated that he has not availed any Cenvat Credit; consequently, the appellant was not entitled to benefit of abatement.

  The learned Commissioner (Appeals), after going through the financial report, has only confirmed the demand of Rs.5,13,223/- along with interest and penalties. Further, the learned Commissioner (Appeals) has observed that the appellant has not proved on record that he has not availed the Cenvat Credit on input, capital goods or input services, which is a condition precedent to avail the abatement under Notification No. 26/2012-ST dated 20.06.2012. It is found that the learned Commissioner (Appeals) has given substantial benefit to the appellant wherever the appellant was entitled to and has only confirmed the demand of Rs.5,13,223/-. There are no infirmity as regards the confirmation of the said demand by denial of the benefit of abatement to the appellant.

  Interest - HELD THAT:- The appellant is liable to pay the same on the amount of Rs.5,13,223/- as per Section 75 of the Act.

  Penalties - HELD THAT:- In the facts and circumstances of the present case, said penalties are not imposable as the appellant has a bona fide belief that he is not liable to pay service tax on Rent- a-Cab service provided to the body corporates and those body corporates are liable to pay service tax under reverse charge basis. Hence, the penalties under Sections 77 & 78 of the Act dropped.

  Conclusion - i) The demand for service tax was confirmed at Rs. 5,13,223/- along with interest under Section 75 of the Finance Act, 1994. ii) The appellant was not entitled to abatement under N/N. 26/2012-ST due to failure to prove non-availment of Cenvat Credit. iii) Penalties under Sections 77 and 78 were dropped considering the bona fide belief of the appellant. v) The invocation of extended period of limitation was upheld.

  Appeal allowed in part.

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• 2025 (6) TMI 456
  

  Calculation of service tax - differential service tax along with interest demanded on the entire value of food and service charges is correct or service tax liability is required to be calculated only on the service charges? - inclusion of reimbursable expenditure for purchase of Flowers and Posters in the value of Outdoor Catering Service - requirement to pay service tax on the marketing leads provided to M/s. Epicurean under Business Auxiliary Services.

  Whether the differential service tax of Rs.3,51,313/- along with interest demanded on the entire value of food and service charges is correct or whether the service tax liability is required to be calculated only on the service charges? - HELD THAT:- The issue is decided in the case of M/S. GOLDLINE HOSPITALITY SOLUTIONS (P) LTD. VERSUS THE COMMISSIONER OF G.S.T. & CENTRAL EXCISE, CHENNAI SOUTH COMMISSIONERATE [2019 (1) TMI 1309 - CESTAT CHENNAI] where it was held that 'The issue is no longer res integra and is covered by the decision of the Hon’ble Karnataka High Court alluded to by the Ld. Advocate in C.S.T., Bangalore Vs. The Grand Ashok [2011 (4) TMI 210 - KARNATAKA HIGH COURT]. The Hon’ble High Court of Karnataka has held that Outdoor Catering is a composite but divisible contract of service under Article 366(29)(a)(f) of the Constitution of India; hence, sale of goods has to be bifurcated from service provided.'

  The demands of service tax of Rs.3,51,313/- and also of Rs.1,650/- on reimbursable expenditure are not sustainable.

  Whether the Appellant is required to pay service tax on the marketing leads provided to M/s. Epicurean under Business Auxiliary Services? - HELD THAT:- The Appellant has promoted or marketed the services of M/s. Epicurean to Nokia and obtained the contract favoring M/s. Epicurean and for such services M/s. Epicurean was paying 1% fee of the gross sales of M/s. Epicurean to Nokia. As such, the Appellant is providing a marketing service to M/s. Epicurean, which is appropriately classifiable under BAS and so liable to pay service tax thereon - As such, the Appellant is liable to pay service tax of Rs.83,863/- along with interest under Business Auxiliary Service.

  Conclusion - The service tax demands related to valuation and reimbursable expenses set aside, while upholding the BAS-related service tax demand upheld.

  The Appeal is partly allowed.

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• 2025 (6) TMI 455
  

  Classification of services - services rendered by the appellant to the foreign universities - export of service as claimed by the appellant or intermediary service as alleged by the Revenue? - HELD THAT:- The issue has already been decided in favour of the appellant in large number of decisions, taking a consistent view, that the appellant cannot be categorized as an “intermediary” and the services rendered by him for promotion and marketing of foreign universities was on principal to principal basis. The services rendered by the appellant in India are received by the foreign universities outside India, for which commission is received in foreign currency is “export of service” and consequently, no service tax is leviable thereon.

  Appeal allowed.

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• 2025 (6) TMI 454
  

  Short payment of service tax - discrepancies between turnover declared in Profit & Loss accounts and ST-3 returns - CENVAT Credit on input services - inability to produce prescribed documents during enquiry - HELD THAT:- The original authority has very clearly stated in para 14 of the order-in-original that the appellant had filed ST- 3 returns wherein the assessable value was shown to the tune of Rs.9.65 crores and Rs.15.74 crores. It is noted that there was difference between the assessable value shown in the ST-3 return and the turnover in the P&L account, but it is not found that there was any intention not to pay service tax on the balance amount because balance amount involved service tax of merely Rs.11 lakhs. There is no case for imposition of penalty in the present case. Insofar as the demand of service tax is concerned, ends of justice will meet once the appellant pays balance service tax of Rs.11,42,268/- with applicable rate of interest.

  Denial of CENVAT Credit - HELD THAT:- The input service invoices were pertaining to the years 2013, 2014 and 2015 and they were attempted to be produced in the year 2021 before the original authority and the appellant could establish a case of Rs.5.69 crores and could not produce invoices having service tax payment to the tune of Rs.2.94 lakhs. It appears to me that it is a genuine case where some invoices could not be traced out. It is also noted that Service Tax Law and Cenvat Credit Rules have nowhere specified the time limit for which input service invoices are to be maintained and kept on record of the appellant. There are no merit in disallowing cenvat credit of Rs.2,94,972.17/-.

  Conclusion - i) Demand for short paid service tax confirmed to the extent of Rs.11,42,268/- with interest; penalty not imposed due to no intention to evade and filing of returns. ii) Cenvat credit of Rs.2,94,972.17 disallowance set aside; credit allowed in full. iii) Appropriation of Rs.11,80,034/- upheld; penalty set aside; no extended limitation invoked.

  Appeal allowed.

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• 2025 (6) TMI 453
  

  Short payment of service tax - Business Auxiliary Service - short payment based on the difference of consideration shown in annual balance sheet vis a vis statutory ST-3 returns - invocation of extended period of limitation.

  Extended period of limitation - HELD THAT:- The appellant is a State Government undertaking which is the central procurement agency for the Government departments. The appellant provides procurement, inspection & testing services to the State Government departments. It is seen that the Department has raised the said demand consequent to an audit conducted by the AGMP, Gwalior, on the grounds that the appellant had shown less receipts in their ST-3 returns as compared to the actual receipts as per their books of account in respect of Business Auxiliary Services, Renting of Immovable property and Technical, Inspection and Certification services.

  The non-payment of tax was detected during the audit of the records of the appellant. This evidences the fact that the appellant was registered and was filing his returns with the department. We note that the impugned order has held that as the appellant did not inform the department regarding the correct amount of consideration received in their ST-3 returns, as compared to the amount reflected in their Books of Accounts, and had suppressed the correct value of the taxable service provided by them with an intent to evade payment of service tax. Such a finding recorded that suppression of facts is enough to invoke the extended period of limitation under the proviso to section 73 (1) of the Finance Act and there is no necessity of any intent to evade payment of service tax, is against the well settled principles - the demand for the extended period cannot be sustained in the instant case.

  Demand made on the basis that there is difference between the figures shown in the statutory returns on which tax was paid and the figures indicated in the annual balance sheet - HELD THAT:- The show cause notice does not give any reason to allege short levy except the difference between balance sheet and the ST-3 returns. In the present case, neither the notice nor the lower authorities have justified the demand for short levy or short payment of tax with any cogent reason. The burden of explaining the difference amount being not taxable income has been shifted to the appellant. This will be against the very basis of tax levy. It is the Department which alleged short payment and at least basic preliminary supporting evidence of such short payment has to be made so that the appellant can defend their case.

  This Tribunal vide its Final Order in M/S. SUNCITY SHEETS PVT LTD., M/S. JINDAL STAINLESS LTD. VERSUS DESIGNATED AUTHORITY, DIRECTORATE GENERAL OF ANTI-DUMPING AND ALLIED DUTIES/MINISTRY OF FINANCE [2018 (3) TMI 780 - CESTAT NEW DELHI], and in MP LAGHU UDYOG NIGAM LIMITED VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, BHOPAL [2023 (5) TMI 607 - CESTAT NEW DELHI] in identical set of facts had set aside the demand holding that mere booking of income by the appellant as service charge in their balance sheet would not render any meaning that the entire amount can be ascribed to a single activity under ‘Business Auxiliary Services’.

  Conclusion - i) The demand of Rs. 28,53,129/- along with interest is not sustainable due to lack of cogent evidence establishing tax liability on the differential receipts and failure of the Department to discharge the burden of proof. ii) The extended period of limitation cannot be invoked in the absence of wilful suppression of facts and intent to evade payment of tax, especially considering the appellant's status as a State Government undertaking and the absence of any positive act of concealment.

  The impugned order is set aside - appeal allowed.

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• 2025 (6) TMI 452
  

  Wrongful availment of benefit of the N/N. 30/2012-ST dated 20.6.2012 - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- This Bench in its decision in the case of Sahara Ex-Servicemen Welfare Co-Operative Society Limited [2025 (1) TMI 1206 - CESTAT NEW DELHI] held that 'The appellant admittedly is a co-operative society registered under Rajasthan Co-operative Society Act, 2001. The copy of certificate of registration is also produced by the appellant. There is no evidence to the contrary by the department. In the light of above observations with respect to Notification No. 30/2012, we hold that the appellant being a co-operative society was very much eligible for the abatement/exemption of 75% of the tax liability. The Order-in-Original has denied the said exemption holding the appellant is not the “Association of Person”. To our understanding the said comparison is not required for the purpose of the impugned notification. It is an admitted fact that 25% of tax liability has been discharged by the appellant. In light of this discussion the confirmation of remaining 75% of the gross value as service tax from appellant is not sustainable.'

  Conclusion - i) A co-operative society registered under law qualifies as an "association of persons" for the purpose of Notification No. 30/2012-ST and is entitled to the 75% abatement on taxable value for security agency services provided to a body corporate. ii) Payment of service tax on 25% of the taxable value by the service provider and 75% by the service receiver is the correct application of the notification. iii) Invocation of the extended period of limitation requires proof of suppression or intent to evade tax, which is absent where the appellant complies with the notification.

  The impugned order is set aside - appeal allowed.

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• 2025 (6) TMI 451
  

  Valuation of taxable service under the Works Contract Service (WCS) for the purpose of service tax liability - appellant's method of segregating the invoice value into VAT on goods and service tax on the service portion complies with the provisions of the Service Tax (Determination of Value) Rules, 2006, particularly Rule 2A or not - HELD THAT:- This Bench in the appellant’s own case for an earlier period in M/S. OCEAN INTERIOR LIMITED VERSUS COMMISSIONER OF G.S.T. & CENTRAL EXCISE, CHENNAI [2019 (11) TMI 124 - CESTAT CHENNAI] has considered the binding judicial precedence of the Hon’ble Supreme Court in the case of Safety Retreading Co. (P) Ltd. Vs Commissioner of Central Excise, Salem [2017 (1) TMI 1110 - SUPREME COURT] and other rulings of CESTAT Benches, to hold that the calculation of payment of service tax by the appellant was in order.

  Conclusion - The appellant has correctly discharged Service Tax on the service portion.

  There are no reasons to deviate from the above order and hence, the impugned order cannot sustain - appeal allowed.

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• 2025 (6) TMI 450
  

  Scope of "port" under Section 65(81) of the Finance Act, 1994 - impugned premises which was considered as port was a major port as per the definition of ‘port’ given in Section 65(81) of the Finance Act, 1994 or not - HELD THAT:- The learned adjudicating authority should have considered if at the relevant time the impugned portion of land was a major port as per the statutory provisions. Since, this issue goes to the root of the matter, it needs to be decided with elaborate findings and in case the contention of the Advocate is acceptable, then the department’s case cannot survive.

  It is deemed fit to remand the matter to the adjudicating authority to decide the issue in detail and the whole appeal in the light of his findings. As far as learned Advocate is concerned, he shall be free to make legal submissions on this point with any other evidences indicating that at the relevant time, the portion of land impugned was not a major port, as per the definition borrowed under Finance Act, 1994. Matter is remanded with above directions.

  Appeal allowed by way of remand.

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• 2025 (6) TMI 449
  

  Classification of services - manpower supply services or maintenance and repair services - validity of demand raised by the Department based on Income Tax Returns and Form 26AS - suppression of facts or not - invocation of extended period of limitation - HELD THAT:- The agreement clearly is for ‘works of maintenance of 11KV feeder’. On this work, the Appellant is getting consideration of Rs.1,77,800/- per month. Though the Appellant is agreeing to provide manpower, the contract is basically only for maintenance and repair service. In case of manpower service the payment is based on the per day rate for each and every person deployed plus the percentage of commission payable to the service provider, which is not the case here. Therefore, the submissions of the Appellant that they are providing manpower services rejected. Accordingly, on merits their case fails.

  However, there are force in their arguments that the Department has not brought in any specific evidence to the effect that they have indulged in any suppression. The Income received has been declared by them in their Income Tax Returns for which Form 26AS has been issued. The Department has quantified demand based on data under Form 26AS only.

  On identical issue, this Bench in the case of M/s Pappu Crane Service [2019 (7) TMI 1885 - CESTAT ALLAHABAD] has held that 'the revenue’s reliance upon profit and loss account are irrelevant for the purpose of confirmation of tax.'

  The impugned order is set aside - appeal allowed.

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• 2025 (6) TMI 448
  

  Levy of penalty u/s 78 of the Finance Act - main contention of the Appellant is that the SCN was issued after lapsing of 2 years from the date of visit of the audit officers and the payments made by them along with interest were not considered for extending the benefit of provision of Section 73(3) of the Finance Act, 1994 - HELD THAT:- In terms of provisions of Section 73(3) of the Finance Act, 1994 when the Appellant has paid the service tax on his own ascertainment, no Show Cause Notice should have been issued. Reportedly, there was a short payment to the tune of Rs.6,12,428/- by the Appellant. Further, the reason that was advanced for not giving the benefit of Section 73(3) was that the Appellant had not produced evidence of interest payment. However, it has to be observed that out of total demand of service tax of Rs.1,25,34,226/-, the Appellant has paid Rs.1,19,21,798/- which is not disputed thus leaving a short fall of Rs.6.12 lakhs. There is no evidence that the Central Excise Officer has communicated this shortfall in payment of tax to the Assessee. Further, there was evidence produced for payment of interest of Rs.5,18,466/- on 25.02.2011 which was much before the issuance of the Show Cause Notice dated 10.04.2013.

  Within a reasonable time, the Appellant has filed all the service tax returns due for the period from April 2008 to March 2011 on 17.06.2011 which is much before the issuance of the Show Cause Notice which was dated 10.04.2013.

  There is no justification for invoking the extended period and the issue should have been treated as settled under the provision of Section 73(3) of the Finance Act, 1944 as prevalent in 2011.

  Conclusion - No interference is called for in appropriating the service tax paid by the Appellant but there is no case made out for imposition of penalty under Section 78 of the Finance Act, 1994 in the facts of this case and as such, it is ordered that the impugned order dated 01.09.2015 is modified to the extent of setting aside the penalty under Section 78 of the Finance Act, 1994. However, it is not in dispute that the Appellant has not filed the returns on the due dates as required and so, we confirm the demand of late fee of Rs.1,03,000/- under Section 70 read with Rule 7C of the Service Tax Rules, 1994 of the Finance Act, 1994 for failure to file ST-3 returns for the period 2008-2009 to 2010- 2011 within due dates.

  Appeal allowed in part.

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