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Service Tax - Case Laws
Showing 201 to 220 of 29321 Records
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2024 (3) TMI 1102 - CESTAT KOLKATA
CENVAT Credit - activity of trading as well as erection, commissioning and installation services - non-maintenance of separate account for their input/input services used for providing taxable services as well as exempted services - violation of the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 - HELD THAT:- As held by the Hon’ble Telengana High Court in M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] that if the appellant has taken Cenvat Credit wrongly, Rule 14 of the Cenvat Credit Rules, 2004 empowers the authorities to recover such credit availed by the assessee wrongly. Admittedly in this case, no demand has been raised against the appellant under Rule 14 of the Cenvat Credit Rules, 2004.
Therefore, relying on the decision of the Hon’ble Telengana High Court in the case of Tiara Advertising vs. UOI, it s held that the demands are not sustainable against the appellant, therefore, the impugned order is set aside - appeal allowed.
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2024 (3) TMI 1101 - CESTAT ALLAHABAD
Levy of service tax - Business Support Service - service of providing up-linking facility - classification of service - services of supply of DSNG Van to its clients can be classified and subjected to service tax under the category of Supply of Tangible Goods Service or not - time limitation - demand of interest - levy of penalties u/s 77 & 78 of FA.
Whether the service of providing up-linking facility will be taxable under the category of Business Support Service? - HELD THAT:- On examination of the terms of the contract between the appellant and their client it is clearly evident that appellant have provided the services which support the business activities of their client, by providing the uplinking facility from their teleport. Thus on merits these service would be classifiable under the category of business support services.
Whether the services of supply of DSNG Van to its clients can be classified and subjected to service tax under the category of Supply of Tangible Goods Service? - HELD THAT:- The agreement between the appellant and their customer is from the day one i.e. the day when it was entered into, was an agreement to provide these vehicles on rent to the appellant without transferring the effective control and possession of the vehicle to the customers - Hon’ble Supreme Court has in case of Adani Gases Ltd. [2020 (8) TMI 789 - SUPREME COURT] held that the supply of the pipelines and the measurement equipment (SKID equipment) by the respondent, was of use to the customers and is taxable under Section 65 (105) (zzzzj) of the Finance Act 1994 - there are no merits in the submissions made by the appellant in this respect and hold that the appellant has in fact provided the service under the taxable category of the Supply of Tangible Goods Services.
Whether the demand is barred by limitation? - HELD THAT:- The issue involved is purely of interpretation of the terms of agreement vis a vis the provisions of the Act. On going through the terms of agreement, the appellant were entertaining a bona fide belief that these service would not be classifiable under any of the taxable categories. There is nothing in the agreement to show that appellant could not have entertained such a belief. Also it is found that there has been dispute in respect of interpretation of the term “infrastructural support facility” used in the definition of Business Support Services. There are decisions which have held that the this term was restricted only to infrastructural support facilities, vis a vis the office maintenance facilities which have been out sourced. Thus it cannot be said that appellants could not have entertained such a belief - thus, extended period of limitation could not have been invoked for making this demand.
As the service tax is payable is under this category thus the demand will be restricted only to the extent it has been made within the normal period of limitation. To re-determine the same the matter needs to remanded back to the original authority.
Whether the penalties imposed under Section 77 & 78 can be justified? - HELD THAT:- As it is held invocation of extended period of limitation in respect of the demand made under the category of Business Support Services, the penalty imposed under Section in respect of this demand cannot be sustained. However in respect of the demand under category of Supply of Tangible Goods Services by invoking extended period of limitation as per proviso to Section 73 (1), which is upheld the penalty under Section 78 to that extent is upheld.
Interest - HELD THAT:- The demand for interest also upheld in respect of demands upheld.
Appeal allowed in part.
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2024 (3) TMI 1045 - SC ORDER
Classification of service - Business Auxiliary Service - Business Support Service - Intermediary - it was held by CESTAT that The appellant does not satisfy the conditions to be an ‘intermediary’ for his services and as such, the impugned order 08.07.2019 cannot sustain and is required to be set aside - HELD THAT:- The respondent-Company does not fall within the scope and ambit of any of the aforesaid definitions. This is having regard to the scope of its mandate to act on behalf of the principal namely primark.
Appeal dismissed.
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2024 (3) TMI 1044 - CESTAT CHENNAI
Classification of services - Clearing and Forwarding Agents or not - testing the quality of silk received from the reelers and stock it for being sold in open auction to various agencies like the appellant, Handloom Silk Weavers Cooperative Societies and Twisters - HELD THAT:- The facts of the present case are more or less akin to the facts of THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. THE SALEM STARCH & MANUFACTURERS SERVICE INDUSTRIAL CO-OPERATIVE SOCIETY LIMITED [2013 (8) TMI 296 - MADRAS HIGH COURT], wherein also the Hon'ble High Court has held that there is no question of clearing and forwarding agents service involved and consequently there was no liability to service tax under the said category.
The demand of service tax on the appellant under the category of ‘Clearing and Forwarding Agents’ Service is not sustainable, for which reason, the impugned order cannot sustain - the impugned order set aside - appeal allowed.
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2024 (3) TMI 1043 - CESTAT AHMEDABAD
Declared Service or not - agreement entered by the respondent-assessee with M/s. Syngenta India Limited for job work and were entitled to receive a variable costs and a fixed cost from M/s. Syngenta India Limited - falling under the categories of service “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act”, or not - clause (e) of Section 66E of the Finance Act, 1994 - HELD THAT:- On perusal of record as well as the agreement for job work, it is found that the agreement is primarily for undertaking job work for manufacturing various pesticides and the payment schedule for both, fixed as well as variable payment for manufacture of pesticides.
It can be seen from the schedule produced that payment for the job work for manufacturing of various kinds of pesticides has two components, firstly fixed charges per month of Rs. 16 Lacs and fixed charges up to 1500MT of per kg. basis at the rate of Rs. 5.7 per kg. for formulation and secondly for manufacturing of pesticides of above 1500MT variable rates has been given as provided - It can be seen that the agreement is primarily for manufacturing of pesticides by respondent-assessee on job work basis. The first category of the fixed charges which is at the rate of Rs. 16 Lacs per month is an integral part of the job work manufacturing charges i.e. primarily for the purpose of keeping the confidentiality of the formulation of the M/s. Syngenta India Limited and same cannot be considered separately from the job work agreement.
The fixed cost which are being paid to the respondent-assessee do not fall under Declared Service category as mentioned under Section 66E(e) and the amount which is paid to the respondent-assessee is primarily for manufacturing cost undertaken by them on job work basis.
It is an accepted legal position that the agreement has to be considered in its entirety for the purpose of levy of service tax since the agreement is primarily for undertaking job work for manufacturing various kinds of pesticides and therefore, even if the payment for the job work is made in two types namely one as fixed and another is at variable cost, this fact will not change the nature of the agreement and same is to be considered as job work manufacturing agreement - the department’s stand that fixed component of the payment for the job work category under the declared service under Section 66E is not sustainable.
The impugned order-in-original is legally sustainable - appeal is dismissed.
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2024 (3) TMI 1042 - CESTAT NEW DELHI
Rejection of refund claim on the ground of unjust enrichment - amount has been rightly credited to the Consumer Welfare Fund or not - Section 11 B of the Central Excise Act, 1944 - HELD THAT:- The reasons for rejecting is that in terms of Section 11B of the Act, 1944, the appellant was required to submit such documentary or other evidences so as to establish that the amount of duty and interest, if any, and the incidence of such duty had not been passed on by him to any other person - Both, the Adjudicating Authority and the Appellate Authority had specifically noted that either the appellant had not produced the documents or had only submitted the photocopies of the Ledger Account and invoices.
The refund claim filed by the appellant includes the amount of Rs.7,24,463/- excess paid under the category of ‘Management, Maintenance & Repair Services’. As the refund claim is found to be hit by unjust enrichment clause for want of requisite documents, an opportunity may be granted to the appellant to produce the documents and other evidences proving that the incidence of duty has not been passed on either directly or indirectly to the service receiver.
The matter is remanded to the Adjudicating Authority, granting liberty to the appellant to substantiate that the claim is not hit by unjust enrichment in the light of the documents produced - Appeal allowed by way of remand.
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2024 (3) TMI 1041 - CESTAT HYDERABAD
Liability of service tax on the alleged differential amount - It appeared to Revenue that Appellant have declared income of Rs.1,07,38,534/- in the income tax return for the financial year 2015–16 whereas they have declared gross receipt of Rs.50,27,482/- in their half yearly service tax return - whether the Commissioner (Appeals) have rightly set aside the Adjudication Order by which the Adjudicating Authority have dropped the proposal of service tax in the show cause notice? - HELD THAT:- The grounds of appeal before the Commissioner (Appeals) raised by Revenue are wholly vague. No exact Rule is pointed out of the POPS Rules which have been violated - it is found that the allegation that the Adjudicating Authority did not examine the services provided to the other 3 foreign companies other than Mavensoft Technology as their names are not mentioned in the Adjudication Order in contrary to the finding of the Original Authority.
The Commissioner (Appeals) have just raised some doubts and without any categorical adverse finding, have been pleased to set aside the Adjudication order. It is found that the impugned order is cryptic and nonspeaking.
The impugned Order-in-Appeal is set aside - the Order-in-Original is restored - appeal allowed.
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2024 (3) TMI 1022 - KERALA HIGH COURT
Recovery of service tax - Validity of instruction issued by the department to the Bank - Restriction from permitting any withdrawal from the accounts held by the appellant until the service tax liability is fully satisfied - Post GST era - HELD THAT:- Ext. P6 order has been passed after complying with all the statutory formalities and giving sufficient opportunity to the appellant for hearing. It cannot be said that Ext. P6 was passed without jurisdiction or without complying with the principles of natural justice. Without challenging Ext. P6 in appeal, the appellant cannot challenge the same in the writ petition. Hence, the challenge against Exts. P6 and P8 must fail.
Appellant submitted that the appellant may be granted instalment facility to clear off the liability, and he may be permitted to operate the bank account on payment of the first instalment. The learned standing counsel for the respondents submitted that the Commissioner has the power to grant a maximum of 24 instalments.
Considering the facts and circumstances of the case and the present financial condition of the appellant, the appellant can be permitted to clear off the service tax liability by way of instalments - appellant shall make a payment of Rs. 25,00,000/- towards the service tax liability on or before 31st January, 2024 - Appeal disposed off.
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2024 (3) TMI 986 - CESTAT NEW DELHI
Works contract service - entitlement to benefit under the Composition Scheme - requirement of first formally informing the department in writing that the appellant is exercising the option to pay service tax under the Composition Scheme - HELD THAT:- This issue was examined by a Division Bench of the Tribunal in M/S. ABL INFRASTRUCTURE PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NASHIK [2015 (2) TMI 801 - CESTAT MUMBAI] and in connection with rule 3(3) of the Composition Scheme and it was held that the appellant was executing work in a new contract from 5-6-2007 and was therefore eligible under the category of Works Contract Service.
Subsequently, a Division Bench of the Tribunal in CCE, JAIPUR VERSUS M/S ZUBERI ENGINEERING COMPANY AND (VICE-VERSA) [2017 (11) TMI 1334 - CESTAT NEW DELHI], after referring to the decisions of the Tribunal in ABL Infrastructure and Nagarjuna Construction Company, observed when the appellant/assessee did not pay any tax on such works contract service and starts paying tax after availing concession, such payment of tax under the scheme should be construed as exercising the option.
The Calcutta High Court in M/S. LARSEN & TOUBRO LIMITED VERSUS ASSISTANT COMMISSIONER, SERVICE TAX COMMISSIONERATE, DIVISION-III, KOLKATA & OTHERS [2022 (12) TMI 523 - CALCUTTA HIGH COURT] also examined the issue and observed that In the absence of statutory format can the department be heard to say that the option should be exercised in a particular fashion and cannot be by conduct, that is by paying the service tax equivalent to 2% of the gross amount charged for the works contract.
In view of the aforesaid decisions of the Tribunal and judgment of the Calcutta High Court, it has to be held that payment of service tax contemplated under the Composition Scheme and filing the return would be sufficient compliance of exercising the option under the Composition Scheme.
The impugned order dated 29.03.2017 passed by the Commissioner, therefore, cannot be sustained and is set aside - appeal allowed.
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2024 (3) TMI 985 - CESTAT NEW DELHI
Levy of service tax - Business Auxiliary Service - arranging the transportation for delivery of goods manufactured by them to their clients/buyers so as to facilitate those buyers, have generated some income by retaining some part of the freight charges as were received from their buyers while making payments to the transporters - HELD THAT:- SCN alleged the said amount to be a consideration for rendering a Business Auxiliary Service. The order under challenge has held the said amount to be a brokerage or commission. This particular perusal is sufficient to hold that Commissioner (Appeals) has gone beyond the scope of show cause notice which is not at all permissible. Confirming a demand on a different count which was not brought to the notice of the assessee/appellant before confirmation of the service tax amounts to confirmation of tax under new categories and the same is not legally permissible as it was held by this Tribunal in the case of M/S BALAJI CONTRACTOR VERSUS COMMISSIONER OF CENTRAL EXCISE JAIPUR-II [2017 (3) TMI 181 - CESTAT NEW DELHI]. Hon’ble Supreme Court also in the case of COMMISSIONER OF CUSTOMS, MUMBAI VERSUS TOYO ENGINEERING INDIA LIMITED [2006 (8) TMI 184 - SUPREME COURT] has held that the department cannot travel beyond the scope of show cause notice. These observations are sufficient to set aside the order under challenge.
The buyer of goods manufactured by appellant cannot be held to be the service recipient, he being the party to contract of sale/purchase order. There is no contract between appellant and the transporter. No question of later being the service recipient at all arises. Thus there is no activity of appellant which may be called as Business Auxiliary Service. No question arises of providing Business Auxiliary Service as is alleged in show cause notice by the appellant to the said buyer.
The mere activity of sale cannot be called as taxable service. Earning profit in the said arrangement therefore cannot come under the service tax net. Thus, the findings of Commissioner are otherwise not sustainable. The transaction in question is between principal manufacturer to principal buyer. The freight charges are in addition to the value of the goods. The surplus is earned by the appellant by not acting as a service provider to the transporter nor to the buyer.
The order under challenge is hereby set aside - Appeal allowed.
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2024 (3) TMI 984 - CESTAT NEW DELHI
Short payment of service tax - Works Contract Service - composition scheme - cost of materials was not taken into account for payment of the service tax, which is primary condition of works contract - HELD THAT:- In view of the reasoning noted by the Adjudicating Authority that there is a standard practice that the Departmental Audit is conducted for a specified period, which has been clearly mentioned in IAR as April, 2006 to September, 2009 in Col.-9 in Part-I and the appellant has not shown anything that the period specified was extended by the proper officer, there is no merit in the submission of the learned Counsel that IAR No.07/2010 dated 20.04.2010 covered the period from October – December, 2009.
It is found from the order of the Adjudicating Authority that the appellant though had the opportunity to substantiate their claim and present documentary evidence in their support, however, they have only presented IAR No.07/2010, which is based on the documents produced by the appellant but the short payment of service tax was calculated only for the period under audit, i.e. April, 2006 to September, 2009 as per serial no.9 of IAR No.07/2010.
In absence of any documents placed by the appellant, both the Adjudicating Authority and the Appellate Authority have not found favour with the appellant and hence, confirmed the demand. In the interest of justice that the appellant may be granted an opportunity to place on record the requisite documents, as mentioned above before the Adjudicating Authority as the stand taken by the appellant is that the bills of VAT/Sales Tax on materials used in the ‘Works Contract Service’ have already been provided by the appellant to the Superintendent, Service Tax.
From the records of the case, it is found that the ST-3 Returns were filed by the appellant on 24.04.2010 for the period October, 2009 to March, 2010 and the Audit Report No.1192/2010 was dispatched to them on 3.5.2011. Subsequently, the jurisdictional Range Officer sent letters dated 18.05.2011, 13.06.2011, 25.04.2012, 27.04.2012 and 08.01.2013 calling upon them to submit information and documents etc. However, the appellant, after two years of filing the periodical ST-3 Returns submitted that the value of the taxable services in the said returns has been wrongly given. The submission of the appellant was found to be noncorroborative without any documentary evidence and was found to be of no merit. On this aspect also, the learned Counsel for the appellant was required to substantiate his case with the supporting documents, which he failed to do so.
The reliance placed by the appellant on the earlier Audit has been found to be distinguishable by the Adjudicating Authority as according to it, the preceding Audit team must have prepared the audit on the basis of the information presented by the assessee themselves. All these facts and submissions can be made by the appellant before the Adjudicating Authority once again along with the necessary and corroborative documents in that regard.
It would be just and fair that the matter is remanded before the Adjudicating Authority, granting liberty to the appellant as well as to the Department to place on record the documents and the Adjudicating Authority may consider the same on merits - appeal is allowed by way of remand.
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2024 (3) TMI 983 - CESTAT ALLAHABAD
Demand as proposed in the SCN on the basis of mismatch of ST-3 Returns and Balance Sheets/26AS - Invocation of Extended period of limitation - penalties - HELD THAT:- It has been held in a catena of decisions that only the amount received by the Appellant was liable to Service Tax, amounts reflected in Balance Sheets cannot be used to determine the Service Tax liability. The Hon’ble Madras High Court in FIRM FOUNDATIONS & HOUSING PVT. LTD. VERSUS PRINCIPAL COMMISSIONER, OFFICE OF THE PRINCIPAL COMMISSIONER OF SERVICE TAX [2018 (4) TMI 613 - MADRAS HIGH COURT] held that the reporting of income in the P & L is irrelevant for the purposes of determination of service tax payable and thus the basis of the impugned assessment is erroneous. Moreover, income reflected in the Balance Sheet is for Income Tax purposes, which cannot be used for the purpose of service tax without any corroboratory evidence as also supported by M/S LUIT DEVELOPERS PRIVATE LIMITED VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, DIBRUGARH [2022 (3) TMI 50 - CESTAT KOLKATA].
It is found that since the Appellant was filing ST-3 Returns regularly, the Department’s stand that it could examine the correct facts only on going through the Balance Sheets cannot be sustained as CBEC Circular No.113/7/2009-S.T., dated 23-4-2009 vide F.No.137/158/2008-CX. 4 and CBEC Circular No.185/4/2015-ST dated 30.6.2015 vide F.No137/314/2012 categorically puts duty on the assessing officer to effectively scrutinize the returns at the preliminary stage, as held in M/S. GANNON DUNKERLEY & CO. LTD. VERSUS COMMISSIONER (ADJUDICATION) OF SERVICE TAX, NEW DELHI [2020 (12) TMI 1096 - CESTAT NEW DELHI].
Extended period of limitation - HELD THAT:- Extended period of limitation cannot be invoked solely on audit queries and objections. It is observed that the Department has not adduced any positive evidence to show mala fide intention for evasion of service tax and therefore extended period is erroneously invoked. There are no ingredient of fraud or suppression with an intent to evade payment of tax - the demand raised is completely barred by limitation and accordingly the demand is set aside.
Penalty - HELD THAT:- Since there is no element of fraud or suppression, penalty under Section 78 is liable to be set aside.
Appeal allowed.
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2024 (3) TMI 982 - CESTAT ALLAHABAD
Maintainability of appeal - requirement to make pre-deposit - HELD THAT:- The appellate authority could not have entertained the appeal without noting the compliance with the conditions as laid down as per this section. Since the appellant has failed to comply with the conditions as laid down under this section, Commissioner (Appeal) refused to entertain the appeal and dismissed the same without considering the same on merits.
Undisputedly appellant has now made the pre-deposit of 10% for filing this appeal before CESTAT, which is more than 7.5 % of disputed tax amount, which was required to be deposited as pre-deposit for the first appellate authority to entertain the appeal.
Taking note of the fact that no order has been passed in the matter on merits and the appeal was dismissed only for the requirement of pre-deposit, it is found that this matter is fit case for being remanded back to the Commissioner Appeals for consideration of the appeal before him on merits.
Appeal is allowed by way of remand to Commissioner (Appeals). Commissioner (Appeals) to decide the appeal in de-novo proceedings on merits within 90 days of the receipt of this order.
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2024 (3) TMI 925 - MADRAS HIGH COURT
Recovery of arrears of tax in terms of Section 124(1)(c) of the Sabka Vishwas (Legacy Dispute Resolution Scheme Rules, 2019 in the Finance Act, 2019 - jurisdiction under Section 74 of the Finance Act, 1994 was invoked to rectify the mistake - HELD THAT:- The power to rectify an order is confined only to remove the error apparent on the fact of record. Therefore, a rectification proceeding under Section 74 of the Finance Act, 1994 cannot be considered to be an appellate proceeding before the Appellate Authority under Section 86 of the Finance Act, 1994 although, proceeding initiated proceeding under Section 74 of the Finance Act, 1994 may also result in reversal of the decision sought to be rectified.
There is no merits in the submissions of the petitioner that the case of the petitioner has to be settled in terms of Section 124(1)(a) of Chapter V of Finance Act, 2019 contrary under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
Considering the fact that the petitioner was given a temporary relief by this Court while passing order dated 17.03.2020, the petitioner cannot be denied the benefit of Sabka Vishwas - (Legacy Dispute Resolution) Scheme, 2019 if the petitioner has complied with the said order by depositing Rs. 1,66,83,286/- within a period of two weeks as was ordered.
The petitioner shall pay an amount of Rs. 33,36,656/- within a period of 30 days from the date of receipt of a copy of this order, provided the petitioner has paid a sum of Rs. 1,66,83,286/- as was ordered on 17.03.2020 - petitioner shall also pay the interest at 12% p.a. on the delayed payment of (Rs. 1,66,83,286/- and Rs. 33,36,656/-) Rs. 2,00,19,942/- from the date of expiry of 30 days from the receipt of Form SVLDRS-3 - In case, the petitioner had failed to pay the amount of Rs. 1,66,83,286/- as ordered on 17.03.2020 and fails to pay the amounts as ordered now, the benefit of Sabka Vishwas - (Legacy Dispute Resolution) Scheme, 2019 shall not be extended to the petitioner.
Petition disposed off.
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2024 (3) TMI 924 - CESTAT AHMEDABAD
Bifurcation of composite service - whether the appellant have arbitrarily bifurcated the receipt of payments from M/s. JK Paper Limited under two separate service category i.e. Manpower Recruitment or Supply Agency Service and GTA service? - Extended period of limitation - HELD THAT:- It is matter of record that appellant has entered into two separate agreements with M/s. JK Paper Limited on two different dates. This fact has been admitted by the department also. In such a situation, it cannot be alleged by the department that the appellant have arbitrarily bifurcated the value of services rendered by him under two types of invoices/ bills. The invoices which have been raised by the appellant are as per the legally valid work contracts/ agreements and it is accepted legal principle that for the purpose of levy of service tax, the individual contract need to be taken into account. Therefore, merely on the assumption that the appellant have entered into separate contracts intentionally to evade service tax is prima-facie, not acceptable.
Extended period of limitation - HELD THAT:- The appellant has regularly been filing their ST-3 returns wherein all the details of services provided by them have been mentioned. The service recipient has also been filing ST-3 returns and therefore, it cannot be alleged that there is any element of fraud, collusion, mis-declaration or suppression of facts with intent to evade service tax - there is no suppression of facts, fraud or misstatement with intent to evade payment of service tax and therefore, it was wrong on the part of the department to confirm demand of service tax under extended time period of Section 73(1) of the Finance Act, 1994.
The impugned order-in-appeal is without any merits - appeal allowed.
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2024 (3) TMI 923 - CESTAT NEW DELHI
Refund of CENVAT credit - Form-A does not match with the amount of CENVAT credit availed in the ST-3 returns for the relevant period - failure to debit the refund claim from its CENVAT credit account at the time of filing of refund claims as required under condition 2(h) of the Notification dated 18.06.2012 - reversal of credit in GSTR-3B filed for the month of December 2017 and March 2018 - HELD THAT:- The period in dispute in this appeal is from July 2016 to June 2017. The appointed date under the 2017 Act is 01.07.2017. Immediately after filing of the last ST-3 return, the appellant claimed CENVAT credit lying in its books of account on 30.06.2017 through Trans-1 filed on 11.08.2017 in the Delhi GST registration and, thereafter, transferred the CENVAT credit to its Bangalore Unit in terms of the proviso to section 140(8) of the 2017 Act for the reason that Bangalore Unit had the same PAN and was included in the centralized registration of the appellant in the Service Tax Regime.
The contention of the department is that the CENVAT credit has been wrongly reversed by the Bangalore Unit as it is a distinct person in the GST regime and the same was required to be reversed by the Delhi unit - This view taken by the department ignores the factual position that CENVAT credit pertains to pre-GST regime when the Bangalore Unit was included in the centralized registration of the Delhi unit. Thus, as the Bangalore Unit was part of centralized registration in the service tax regime, the appellant correctly transferred the CENVAT credit as CGST input to its Bangalore Unit in terms of section 140(8) of the 2017 Act.
The refund claim has also been rejected for the reason that the total CENVAT credit claimed as refund in Form-A does not match with the CENVAT credit availed in the ST-3 return filed for all the four quarters covering the period in dispute from July 2016 to June 2017 - This mismatch has occurred on account of the fact that Swachh Bharat Cess paid by the appellant at the time of filing of return was not reported in the ST-3 returns, since there was no column for mentioning it in the ST-3 returns. The appellant has correctly also filed a refund claim for Swachh Bharat Cess amounting to Rs. 56,42,239/- in terms of Notification No. 3/2016 dated 03.02.2016. The appellant is, therefore, also entitled to claim refund of Rs. 56,42,239/-.
It is not possible to sustain the order dated 16.03.2020 passed by the Commissioner (Appeals). It is, accordingly, set aside. The appellant would be entitled to refund of the amount of CENVAT credit with interest at the prescribed rate - Appeal allowed.
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2024 (3) TMI 922 - CESTAT AHMEDABAD
Levy of service tax - Business Auxiliary service - services rendered by the foreign based agents to the appellant - commission towards sales promotion commission on export sales to their foreign agents situated located outside India - N/N. 9/2009-ST dated 03.03.2009 and N/N. 15/2009-Service Tax dated 20.05.2009 - invocation of Extended period of Limitation - HELD THAT:- Since the services have been availed by the appellant from outside India within Special Economic Zone and therefore, barring brief period of two months for the majority of period the services availed by them from foreign based agent for the promotion of the sales was falling under the exempted category as the services received by them were in the Special Economic Zone unit.
There are force in the argument of the learned Advocate that the substantive benefit of the service tax exemption provided under Section 26 of the Special Economic Zone Act and Rule 31 of the Special Economic Zone Rules cannot be denied only on procedure requirement under Notification No. 9/2009 dated 03.03.2009 as amended by Notification No. 15/2009 dated 20.05.2009.
The services received by the appellant from their foreign based agents who were engaged in promotion of sales abroad though chargeable to Service Tax under category of Business Auxiliary Service under reverse charge mechanism basis by virtue of exemption Notification No. 9/2009-ST dated 03.03.2009 as amended by Notification No. 15 of 2009-ST dated 20.05.2009 and by general exemption for Special Economic Zone units provided under Section 26 of the Special Economic Zone Act, 2005, the services received from abroad shall remain exempted and therefore, the demand raised against the appellant is without any merit.
Extended period of limitation - SCN issued by the department invoking extended time proviso under Section 73(1) of Finance Act, 1994 as the show cause notice was issued on 19.09.2014 for the period April 2009 to March 2011 - HELD THAT:- All the transactions of foreign exchange payment were reflected in their books of account and the by taking necessary permission from the Reserve Bank of India. In view of this the elements for invoking extended time period such as fraud, collusion, misstatement and suppression of facts with an intent to evade duty are absent in this case and therefore the demand is time barred and same also deserved to be dropped on the grounds of limitation.
The impugned order in appeal is without any merit and therefore, the same is set aside - appeal allowed.
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2024 (3) TMI 921 - CESTAT KOLKATA
Calculation of interest - it is alleged that calculation of interest was not done, when it was due and when it was paid - also alleged that interest calculated in a clubbed manner - HELD THAT:- It is not disputed by the Revenue that in 2006, the appellant took registration themselves and started paying Service Tax on their activity. Moreover, the appellant was entitled for abatement of 50% of the Service Tax payable by them in terms of Notification No. 20/2004-S.T. dated 10.09.2004 and the appellant has not claimed abatement in terms of the said Notification, which shows that the appellant was bona fide in not discharging Service Tax initially and thus started paying Service Tax later on. Whatever amount was collected by the appellant from M/s. Tata Motors Ltd. has already been deposited with the Department. In the circumstances, no penalty is imposable on the appellant.
Further, the appellant has disputed certain calculation of interest, which the appellant is ready to pay. For the purpose of calculation of interest, the matter is required to be remanded to the adjudicating authority. Therefore, the matter is remanded back to the adjudicating authority only for the purpose of calculation of interest.
The appeal is disposed of by way of remand.
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2024 (3) TMI 920 - CESTAT KOLKATA
Levy of service tax - commercial or industrial construction service - construction of laying solid, construction of trenches and construction connecting such trenches at road crossings - period from 2004-05 to 2007-08 or not - HELD THAT:- It is not disputed by the Revenue that these services have been provided by the appellant along with materials. Therefore, the merit classification of the above services is “works contract service”, as held by the Hon’ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] wherein the Hon’ble Apex Court observed Works contract were not chargeable to service tax prior to 1.6.2007.
Therefore as no demand has been raised against the appellant under the category of “works contract service” during the said period, no Service Tax is payable by the appellant under ‘commercial or industrial construction service’ - Moreover, the Show Cause Notice in this case has also been issued by invoking the extended period of limitation, which came to be issued on 20.04.2010 for the period 2004-05 to 2007-08.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 919 - CESTAT KOLKATA
Levy of Service Tax - Consulting Engineer Service - execution of work of construction of Residential Complexes in the state of Bihar - denial of CENVAT Credit on architectural Service - input service or not - HELD THAT:- The Executing Agency has not been assigned the work of actual construction, which has been done by the contractors. The role of the Appellant as an Executing Agency is to ensure that the works are executed as per drawings and specifications. They have to provide their expertise and experience for smooth completion of the projects. Accordingly, the Appellant has not rendered 'Construction of Complex Service'. The service rendered by the Appellant is rightly classifiable as 'Consulting Engineer Service' and the Appellant has rightly paid service tax on the 8.5% agency fees received, under this category. Accordingly, the demand of service tax along with interest and penalty confirmed in the impugned order under the category of 'Construction of Complex service' is not sustainable and hence we set aside the same.
The impugned order has confirmed the Service Tax of Rs.3,63,321/- on the differential value of Rs.29,31,401/- during the period 2005-06 to 2008-09 - the calculation has been done unilaterally by the adjudicating authority without giving an opportunity to the appellant to explain the actual difference. Accordingly, it is found that it is required to remand it back to the adjudicating authority to arrive at the differential value after giving an opportunity to the appellant to explain the difference. Hence, the matter is remanded back to the adjudicating authority only for the limited purpose of arriving at the differential value of taxable service of Rs.29,31,401/- worked out by the Department as above.
CENVAT Credit availed and utilized by the Appellant on Architectural Consultancy services - HELD THAT:- This is an essential input service required for rendering of the 'Consulting Engineer service rendered by the Appellant. As per the MOU signed on 18.01.2008, it is the responsibility of the Appellant to ensure that the works are executed as per drawings and specifications. The Appellant cannot fulfill this responsibility without the input service of architecture received from the Architects. Thus, there is no merit in the findings in the impugned order that ‘architectural Service’ is not covered within the definition of ‘input service’. Accordingly, the 'Architecture ' service received by the Appellant is an 'input service' in terms of Rule 2 of CENVAT Credit Rules,2004 and the Appellant has rightly availed and utilized the credit on such input service. Hence, the denial of CENVAT Credit availed and utilized by the Appellant on 'Architecture service' is not sustainable. Accordingly, the impugned order demanding reversal of this credit along with interest and penalty set aside.
The appeal is partly allowed and partly remanded.
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