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Service Tax - Case Laws
Showing 41 to 60 of 139 Records
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2016 (2) TMI 846 - DELHI HIGH COURT
Waiver of pre-deposit - Demand of service tax on works contract - electrical contractor engaged in executing contracts for various Government Departments/Corporations such as CPWD, PWD, Government hospitals, etc. - The service tax demand of around ₹ 58 lakhs has been calculated by the Adjudicating Authority by taking a notional turnover of ₹ 5.38 crores which included the cost of the goods and materials apart from the service component. - Held that:- prima facie, the Court finds justification in the grievance of the Appellant that the computation of the service tax ought to have been confined to the service component and not the entire turnover and that notional turnover determined was at least twice the actual turnover and therefore excessive. - interim order of the tribunal modified - Decided partly in favor of assessee.
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2016 (2) TMI 845 - SC ORDER
Cargo Handling Service - Revenue contended that appellant liable for service tax under 'Cargo Handling Service' on the activity of unitisation, straping and packing of goods - Contrary decision by the tribunal on the same issue - Revenue appeal in the case of [2007 (8) TMI 57 - CESTAT, KOLKATA] - Held that:- CESTAT directed to onstitute a Larger Bench for deciding the issue involved. Since the matters have now become old, we would appreciate if the Larger Bench decides the matters within one year. Needless of mention, the Larger Bench of the CESTAT shall decide all the issues involved.
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2016 (2) TMI 844 - CESTAT MUMBAI
Demand of service tax Cleaning Agency Services - contract for Cleaning Services by Nashik Thermal Power Station - SCN was issued on the ground that there was an escapement of tax under Cleaning Agency Services, Business Support services and Cargo Handling Services. The adjudicating authority has confirmed demand raised on all these services. The first appellate authority has set aside the demands on Business Support Services and Cargo Handling Services but confirmed the demands under Cleaning Agency Services.
Held that:- the Cleaning services which were expected our of appellant is very clear that there is no doubt the appellant has been awarded contract for Cleaning of plant, machinery, buildings etc. At the same time, we also find that the contract which is awarded to the appellant, also has elements of loading and unloading of Coal, to our mind, value in respect of such loading and other activities may not be covered under the category of Cleaning Agency Services. While upholding the demand raised under the category of cleaning services, we remand the matter back to the adjudicating authority for limited question of requantification of the demand, interest and penalties by reduction of the value indicated for loading and unloading of coal, movement of coal etc. - Decided partly in favor of assessee.
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2016 (2) TMI 812 - CESTAT NEW DELHI
Claim of refund of interest on service tax demand paid earlier - period of limitation to claim interest - Held that:- since the appellant for the first time had filed the application, claiming refund of interest paid vide its letter dated 15.09.2010, paid during the period 18.12.2008 to 29.04.2009, in my opinion, the same is barred by limitation of time, being filed beyond the period of one year from the relevant date. Further there is no document available on record to prove that the interest amount was paid by the appellant under protest. - Decided against the assessee.
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2016 (2) TMI 811 - BOMBAY HIGH COURT
Reverse change - the matter in issue was as to whether royalty paid/received as consideration for transfer of technology know how can form part of taxable value and whether the said issue would come within the province of rate of duty or to the value of the goods for the purpose of assessment as envisaged U/Sec. 35G is required to be considered. - Constitutional validity of sosecond proviso to Rule 6 and Rule 2(1)(d)(iv) of Service Tax Rules, 1994 - Held that:- whether the royalty paid would come within the ambit and purview of service tax is a question required to be determined. Considering the judgments as referred above, so also sub section 2 of Section 35L of the Central Excise Act as introduced recently, it would be clear that the said issue will come within the scope of the terminology "rate of duty for the purpose of assessment". In the light of that, the appeal U/Sec. 35G would not be maintainable. - Decided against the assessee.
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2016 (2) TMI 810 - TRIPURA HIGH COURT
Reverse charge - GTA services - it was contended that the FCI has wrongly deducted the service tax from the contractual amount and the same should be ordered to be refunded to the petitioners. - scope of the contract / agreement - Held that:- the note as incorporated clearly indicates the intention of the parties that the rate to be quoted by the contractor should be inclusive of all taxes, levies, cesses etc. which would obviously include service tax. The contractor cannot be heard to urge that service tax is not part of the taxes which arises out of the contract. The liability to pay the tax may have been on the FCI under law but while quoting the rate a contractor can very clearly state what is the rate being quoted by him.
This Court can take notice of the fact that in many such tenders or contracts where sales tax etc. are to be taken into consideration, the contractors are asked to quote rates either inclusive of tax or exclusive of tax. If they are inclusive of tax then the contractor is liable to pay all the taxes therein. - No merit in the writ petition of the appellant - Decided against the appellant.
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2016 (2) TMI 809 - ALLAHABAD HIGH COURT
Jurisdiction to raise service tax demand - the appeal was entertained in which the challenge was raised against the same assessment order which is under challenged in this writ petition. - The petitioner has again come up before this Court raising a direct challenge to the assessment order which has been subject matter of appeal. - Held that:- The issue of jurisdiction to impose service tax can also be raised and decided in the appeal itself. The petitioner did avail the remedy of appeal to avoid the pre deposit amount, but the Supreme Court turn down the said prayer. - Writ petition dismissed - Decided against the assessee.
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2016 (2) TMI 808 - DELHI HIGH COURT
Waiver of pre-deposit - According to the Assessee the service component was between 25% and 44% of the turnover during the period in question. It is stated that in real terms the highest service tax demand worked out ₹ 26.8 lakhs whereas the CESTAT had asked the Assessee to deposit ₹ 17.5 lakhs (along with proportionate interest) which was about 65% of the highest possible service tax demand. - taxabiltiy of works contract including civil work primarily for the Airports Authority of India (AAI). - Held that:- the Court modifies the impugned order of the CESTAT and directs that subject to the Appellant depositing a sum of ₹ 5 lakhs before the CESTAT - stay order modified partially.
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2016 (2) TMI 807 - BOMBAY HIGH COURT
Waiver of pre-deposit - Demand of service tax on the activity of providing labour for harvesting sugarcane - for the later period it was found the no service tax is payable - whether in the light of later order, if the nature of service remains same, the appellant can be held amenable to service tax arises for consideration? - Held that:- We, in this situation, as in later period the services rendered by appellant are held not amenable to service tax, grant the prayer for waiver of pre-deposit. The appeal is restored for a fresh adjudication on merits. - stay granted.
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2016 (2) TMI 806 - CESTAT MUMBAI
Demand of service tax - valuation - reduction of reimbursement of expenses - seeking benefit of 'cum-tax' valuation and dropping of penalty under section 76 of Finance Act, 1994 - business auxiliary service being provided by the Bank - wrongful classification of service - Held that:- An existing service provider may, additionally, be required to operate a 'front office' of the client to reinforce the credibility of the financial products. These may be mandates of the client for which the client may have to make a separate payment - whether these are for actual or on lumpsum is a matter of commercial agreement. To the extent that compliance with these mandates are liable to classified only within services that are 'as yet' not taxable, it would be contrary to legislative sanction to determine tax liability on such receipts. The confirmation of demand, and approval thereof, by the lower authorities, thus, exceed limits envisaged by the legislature.
We notice that the bulk of the expenses have been incurred on salaries, telephones, office space and advertisements, all of which may be considered to be essential to bringing the banking institution to the doorstep of the customer and is, thereby, inextricably enmeshed with the financial product offered by the bank. The costs claimed to be reimbursibles are, therefore, not attributable to the 'business auxiliary service' rendered by the assessee but to the cost of the product itself. Not surprisingly, the bank reimburses these expenses. Therefore, these fall outside the scope of inclusion within the meaning of 'gross amount charged' in section 67 of Finance Act, 1994 in the context of the identified taxable service.
The assessee's claim of reimbursable expenses having been evidenced except for ₹ 52,96,730/- and the tax having been paid on the unevidenced portion of receipts, further demand of tax envisaged in the show cause notice fails to survive. It would appear that the adjudicating authority was itself not unambiguously certain about the taxability and its scope; the assessee cannot be placed on a higher pedestal of more exacting standards of comprehension and compliance. Invoking of section 73(4) of Finance Act, 1994 is, therefore, not warranted. The first appellate authority has dropped the penalty under section 76 of Finance Act, 1994.There is no justification for having continued with, the adjudication after the tax liability had been discharged. - Decided against the revenue and in favor of assessee.
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2016 (2) TMI 774 - CESTAT MUMBAI
Claim for refund of service tax alleged to have been collected from them contrary to law - Service tax was paid by the provider of "construction of residential complex service" - claim of refund by the joint owner / purchase of flat - The Assistant Commissioner rejected the refund claim on the ground that the joint application did not enclose proof that the tax paid by them had indeed been deposited to the credit of the government by the vendor of the property; that the plan of the house was such that, with minor alterations, it could altered in such a way that it could become three separate units; and on the further ground that the project of vendor was not restricted to their residential unit but was a larger complex of which their residence was only a part.
Held that:- The vendor, in the present instance, is liable to be taxed on any activity outsourced by it,in undertaking any construction. The vendor was not in possession of the completion certificate at the time of receipt of consideration from the appellants. Therefore, the transaction between appellants and vendor does not fall within the exception to the `declared service.' The appellants claim that theirs is a single residential unit. However, a perusal of the sale agreement reveals transfer of land and built-up facilities along with the constructed house; this would include a share in the common roads, community facilities and other land that is not assigned specifically to a house owner. That is part of the agreement for transfer and the consideration includes these assets. The residential unit, therefore, cannot but be part of a complex. Hence, the exemption under notification no. 25/2012-ST dated 20th June 2012 is not available to the appellants.
There can be no doubt that the agreement between the appellants and the vendor is for transfer of immoveable property by way of sale. The vendor renounces all rights to any part of the property that is transferred. The transaction is squarely covered by the exclusion from service and, therefore, outside the ambit of tax. The tax collected from the appellants by the vendor and deposited in the government account is without authority of law and is liable to be refunded under section 11B of Central Excise Act, 1944 as made applicable to Finance Act, 1994.
The appellants have borne the incidence of the tax. Deposit of tax collected from the appellants by the vendor in the government account is established to the extent that it is humanly possible. - Refund allowed
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2016 (2) TMI 773 - CESTAT ALLAHABAD
Demand of service tax on various activities i.e. (i) handling charges for loading and un-loading of the vehicle (ii) sales of extended warranty (iii) registration charges received for getting the vehicle sold, registered with the Regional Transport Authority - Held that:- the service tax is not exigible on handling charges, registration services and sale of spares and lubricant, which have been separately reflected in the invoices and have suffered VAT/Sales tax. We further hold-that the handling charges are in the nature of trading receipt and is not taxable. In respect of the registration charges, they have discharged their statutory obligation, as such, it is not taxable. In so far as the service tax on sale of extended warranty is concerned, although we find that the service tax may be exigible on the net discount/commission earned, but in absence of proper classification, both in the show-cause notice and the impugned order, we set aside the demand on this count. - Demand set aside - Decided in favor of assessee.
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2016 (2) TMI 772 - CESTAT MUMBAI
Business auxiliary service - Appellant receives its brokerage from the borrower - principal agent relationship - period between 2005-06 and 2009-10 - Held that:- In view of an equation that is devoid of an agency relationship with the financier and rules out the provision of a service on behalf of the borrower from whom the appellant receives consideration, the activities of the appellant are outside the ambit of “business auxiliary service”. - Decided in favor of assessee.
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2016 (2) TMI 771 - CESTAT CHENNAI
Quantum of Refund of service tax on services provided by commission agent, located outside India - for export of goods - 2% of the FOB value or 10% of the FOB value - NOTIFICATION No 41/2007 as amended - whether amendment is retrospective or prospective - Held that:- By substitution, subordinate legislation do not cause anomaly. It is true that if the subordinate legislation had intended that the benefit of 10% shall be allowed only from the date of substitution through Notification dated 07.12.2008, they would have expressly stated that the notification shall have prospective effect. But that is not done. Therefore, there cannot be presumption of prospective effect since substitution has a beneficial grant. Reliance of the appellant on the decision in Indian Tobacco Association [2005 (8) TMI 113 - SUPREME COURT OF INDIA] is appropriate for the incentive granted to the exporting sector. When the subordinate legislation takes recourse to the process of substitution that enlarges the scope of the benediction of the notification. - The expanded scope of the notification covers the vision of the legislature to boost the export scheme. Therefore, appeal is allowed.
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2016 (2) TMI 770 - CESTAT BANGALORE
Demand of service tax from the person who is sub-letting of CAB - it was found that out the of the 62 cab operators, to whom the respondent has sub-let his vehicles, 34 operators were not registered with the Department and out of remaining 28 registered operators, 15 operators had not discharged service tax liability on the cabs procured from the respondent. - Held that:- The services have actually been provided by the other rent-a-cab operators and not by the assessee. The one who has provided the services is liable to pay the service tax. Merely because such service stands provided by the other sub-contractors by taking the respondent’s vehicle, will not shift the responsibility to pay service tax on the respondent. It is not the Revenue’s case that the respondent himself provided such services or letting of vehicles to the other sub-contractors is also covered by the definition of rent-a-cab service. - Decided against the revenue.
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2016 (2) TMI 729 - CESTAT NEW DELHI
Export of services or not - providing radio programmes for broadcasting to the principal BBC World located in UK - Receipt of consideration through Standard Chartered Bank in Indian Rupee vostro mechanism - leasing out their copyright to the local broadcaster - Held that:- appellant has received the payment in foreign convertible exchange in the light of RBI circular dated 06.02.2008. Therefore, applicants are not liable to pay service tax to the tune of ₹ 5,10,23,578/-. We further find that a demand of service tax has been confirmed against the applicant for ₹ 7,79,630/-on account of leasing out their copyright to the local broadcaster and some period in dispute has implication thereafter. Therefore, at this stage without discussing the merits of the case, we direct the applicant to pre-deposits of ₹ 3,50,000/- (Rupees Three lakh fifty thousand only) - Stay granted partly.
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2016 (2) TMI 728 - CESTAT ALLAHABAD
Levy of penalty for delayed registration - requirement to seek registration starts from crossing of turnover limit as per accrual basis or receipt basis - small service provider being chartered accountant - Notification No.6/2005-Service Tax dated 01.03.2005 - Held that:- receipts for the purposes of Notification, have to be taken as aggregate value of payment receipts consecutively in any financial year. In view of this admitted fact that there is no receipt during the financial year 2004-2005 and the aggregate receipt in the financial year, 2005-06, is below the threshold limit - order set aside - Decided in favor of assessee.
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2016 (2) TMI 727 - CESTAT ALLAHABAD
Refund claim - export of services - period of limitation - Held that:- that the limitation cannot start to run unless right to receive a claim or refund crystallized. In the present case, the right to claim/refund under Notification No.41/2007-Service Tax crystallized only when the service tax was deposited in October, 2008. Thus, the refund claim was filed within six months on 30.03.2009. - refund allowed.
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2016 (2) TMI 726 - CESTAT MUMBAI
Refusal to give refund despite clear direction by the higher authority - Claim of refund of tax paid earlier - Taxability of activity of operation and maintenance of railway tracks as well as maintenance of rolling stock - this is the second round of appeal. - Held that:- The orders of the first appellate authority in the first round are crystal clear in setting aside the rejection of the refund claim after detailed appreciation of facts and circumstances in which the tax had been paid by the appellant besides taking into account the eligibility of the appellant for the refund claim. The original authority was merely required to implement the direction relating to consequential relief.
Contrarily, it appears that the refund sanctioning authority took it on himself to sit in judgment on the higher appellate authority by issue of a fresh notice for rejection on the ground of limitation without applying his mind to the scope of his authority
In such a scheme for protection of the rights of the individual against arbitrariness of the tax executive, a lower authority is mandated to comply with the orders of the higher appellate authority or to act in accordance with the decision of the reviewing authority. Here the two have coalesced and, by its action of choosing a third option, the original authority has placed himself beyond the pale of acceptable behavior.
Refund allowed - Cost of ₹ 10,000 imposed on the Deputy Commissioner of Central Excise, Service Tax Division -III, Delhi - Decided in favor of assessee.
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2016 (2) TMI 725 - CESTAT NEW DELHI
Demand of service tax on commission received for sale of SIM cards and top-up cards - t the impugned order has built its foundation on the assumption that appellants render “business auxiliary service” in relation to SIM cards and hence liable to tax on the commission earned by them. At the same time, the impugned order has considered the commission received as discount on sale of recharge and “top-up” coupons as not liable to tax.
Held that:- An attempt has been made to catalogue the various activities that devolve on the appellants in relation to activation of SIM cards without appreciating the fact that the SIM cards are marked with an MRP on which tax is collected in full from the customer. Therefore, the commission paid to appellants is also included in the value on which tax has been collected from the customer. The customer is, consequently, the recipient of the full value of services from none other than M/s Bharat Sanchar Nigam Ltd; thus, it is no different from the other two products.
As commission system and sale methodology in relation to SIM cards is the same as the other two products, we, for the reason elaborated supra, set aside the impugned orders and allow both the appeals with consequential relief. - Decided in favor of assessee.
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