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Service Tax - Case Laws
Showing 461 to 480 of 31546 Records
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2025 (4) TMI 825
Liability to pay service tax on Annual Technical Support (ATS) fee on 100% of the invoice value as claimed by the Revenue as against the claim of the appellant that they are liable to pay only on 25% of the value - period of dispute is February 2007 to March 2009 - HELD THAT:- From the records, it is seen that the appellant has entered into software and support service agreement with the ICICI Bank Corporation Limited wherein at Clause 1.5 of the Agreement “updates” is defined as shall mean improved releases of the program which are generally made available at no additional cost to Infosys’ Licensees, who have purchases Annual Technical Support as specified in annexure-4- BANCS 2000 support services. Update shall not include any options or future products which Infosys’ licenses separately.
In the instance case also, it is seen that VAT is being paid only on deemed sale and clearly goods are not found to be part of the Annual Technical Support Service, hence, the question of abatement does not arise even though the sale is considered to be deemed sale and VAT is discharged by the appellant. The fact that VAT has been paid will not vitiate the fact that the services rendered by the appellant are not leviable to service tax as is held by the Hon’ble Supreme Court in the case of BSNL [2006 (3) TMI 1 - SUPREME COURT], wherein their Lordships observed 'It is, therefore, unnecessary to deal with the question of delivery of possession which is related only to situs and not to subject-matter of taxation which is a transfer of right to use goods. In the present case, as no goods element are involved, the transaction is purely one of service. There is no transfer of right to use the goods at all.'
In the instant case, it is also a fact that prior to and after the period in dispute, the appellant is paying service tax on the entire invoice value without disputing the fact that they are discharging VAT on part of the same value. Therefore, the question of not paying service tax on the entire value during the disputed period does not arise as the entire value is exclusively towards service element.
There are no reason to disagree with the Commissioner with regard to payment of service tax on the entire invoice value. Accordingly, same is upheld. However, the appellant has been approaching the department and agitating this issue through series of correspondences/communications from December 2005 onwards. Various correspondence has been placed on record from December 2005 to September 2009 and at no point of time, objections were raised by the department. The Commissioner in the impugned order though admits the fact that the appellant vide their letter dated 26.04.2007 had informed the Department that service tax was being discharged on 25% of the value, discarded the same on the ground that the letter nowhere mentioned that VAT was being paid and the appellant failed to file the agreements and these omissions indicate the intention to evade payment of tax.
Conclusion - ATS services provided by the appellant are subject to service tax on 100% of the invoice value, as they do not constitute a deemed sale under Article 366(29A) of the Constitution.
Appeal allowed in part.
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2025 (4) TMI 824
Short payment of service tax - works contract service - demand raised under the category of ‘works contract service’ on the basis of comparison of their financial records along with Form 26AS and S.T.-3 Returns filed - penalty - HELD THAT:- No proper investigation has been conducted to find out as to the activity that was being undertaken by the appellant and as to whether the appellant have paid Service Tax on that activity or whether the said activity was exempt from the levy of Service Tax. Therefore, the demand against the appellant raised merely on the basis of financial records is not sustainable, since the Revenue has not adduced any supportive evidence in support of its allegations.
The appellant was engaged in the activity of construction of dams. The said activity was related to transmission and distribution of electricity, which is exempt as per Notification No. 45/2010-S.T. dated 20.07.2010, Notification No. 11/2010-S.T. dated 27.02.2010 and Notification No. 25/2012-S.T. dated 20.06.2012. Thus, on the said activity, the appellant is not liable to pay Service Tax.
Moreover, wherever the appellant provided services, being a sub-contractor, the main contractor has deducted the Service Tax component from the payments made to the appellant and paid the said Service Tax in the Government treasury, on behalf of the appellant. In these circumstances, the demand of Service Tax is not sustainable against the appellant.
Penalty - HELD THAT:- Since no demand of Service Tax is sustainable against the appellant, no penalty can be imposed on the appellant.
Conclusion - The demand for Service Tax based solely on financial records and Form 26AS is not sustainable. Without corroborative evidence, such demands do not hold.
The impugned order is set aside - appeal allowed.
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2025 (4) TMI 823
Calculation of service tax - inclusion of salary, PF, and other reimbursements in the taxable value under Section 67 of the Finance Act, 1994 - Extended period of limitation - HELD THAT:- The issue as to whether salary, PF, etc. are includable in taxable value in terms of 67 of the Finance Act, 1994 is no more res- integra. The Bangalore Tribunal in the case of Kou-Chan Knowledge Convergence Pvt. Ltd. Vs. CST, Bengaluru [2024 (9) TMI 1249 - CESTAT BANGALORE] has gone into the details and has held that 'the administrative charges collected in providing Manpower Recruitment and Supply Agency Service, is only to be part of the gross taxable value and all reimbursable expenses, salary, bonus, etc. paid to the employee by the appellant and collected from their clients cannot be included within the scope of gross taxable value under Section 67(1)(i) of the Finance Act, 1994 during the relevant period from October 2007 to March 2012.'
In the present case, the amounts received by the appellant on account of salary, PF, etc. would not be exigible to Service Tax payment. They are required to pay Service Tax only on the net consideration received by them from their clients.
Extended period of limitation - HELD THAT:- Since the appellant has paid the Service Tax on their commission amount after excluding the salary and reimbursements and they were filing their ST-3 Returns, no case has been made out towards suppression by the Revenue. Therefore, the confirmed demand for the extended period is not legally sustainable on account of time bar.
Conclusion - i) The reimbursements for salary and related expenses are not includable in the taxable value for service tax purposes. ii) The extended period for demand is not applicable in the absence of suppression.
The impugned order is set aside and the appeal stands allowed.
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2025 (4) TMI 822
Liability of appellant as a builder/developer is required to pay Service Tax under the category of ‘Construction of Residential Complexes’ service during the period June 2005 to January 2007 - HELD THAT:- Undisputedly, the appellant had constructed flats on the land provided to him for development and sale to the prospective customers. The project was named as ‘Ittina Neela’ comprising of 1092 flats. The appellant during the relevant period had sold the flats by entering into individual agreements with various buyers. Thus, the question arises whether the consideration received by the appellant from the sale of flats during the said period against the individual agreement, is liable to pay Service Tax under the category of ‘Construction of Residential Complexes’ service.
The Board had issued a Circular No.108/02/2009-ST dated 29.01.2009 and Circular No.151/2/2012-ST dated 10.02.2012, wherein it has been clarified that builder/developer is not liable to pay Service Tax for the period prior to 01.07.2010.
Conclusion - The appellant is not liable to pay Service Tax for the construction of residential complexes prior to 01.07.2010.
There are no merit in the impugned order - appeal allowed.
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2025 (4) TMI 821
Levy of service tax - Authorized Service Station Services - reimbursement of warranty charges received by the appellant from vehicle manufacturers - amounts received for accident repair services - incentives and commissions received from vehicle manufacturers, insurance companies, and banks/financial institutions - rental income from immovable property - eligibility of cenvat credit utilized by the appellant for payment of service tax on Authorized Service Station Services.
Service tax on Authorized Service Station Services - HELD THAT:- As rightly claimed by the appellant free services are provided to their customers who are owners of the vehicles and the reimbursements by the vehicle manufactures cannot be considered as service rendered to their customers in view of the definition prior to 16.05.2008. Moreover, reimbursements cannot form part of the value in view of the Supreme Court decision in the case of Union of India v. Intercontinental Consultants & Technocrats Pvt. Ltd. [2015 (2) TMI 593 - SC ORDER] followed by this Tribunal in the case of Hewlett Packard India Sales Pvt. Ltd. vs. Commissioner of C. Ex. & S.T. (LTU), Bangalore [2024 (1) TMI 679 - CESTAT BANGALORE] where the Tribunal has held that 'reimbursable expenses cannot be included in the taxable value.'
Service tax on Accident Repair Services - HELD THAT:- The Commissioner in the impugned order has clearly held that during the years 2004-05 and 2005-06 the appellant had declared a taxable service value has Rs.88,02,510/- and Rs.96,31,149/- respectively as against the amounts declared in their annual reports under vehicle service receipts as Rs.1,05,80,536/- and Rs.1,41,22,127/- respectively and since the appellant had not furnished any supporting documents as to why these differences in value the same was confirmed. Since, the demands are only on the differential value based on the annual reports placed before the audit authorities in 2005 the notice issued in 2009 cannot allege suppression of facts. Therefor the demand is confirmed only for the normal period.
Service tax on incentives and commissions received from the vehicle manufacturers and commissions received from various insurance companies and banks and financial institutions - HELD THAT:- The appellant received incentives from the vehicle manufacturers for causing promotion and sale of their vehicles, commissions received from various insurance companies for causing promotion and marketing of services rendered by the insurance companies and the commission received from banks and financial institutions for promoting their business were said to be liable to service tax under Business Auxiliary Services. The appellant has contested this liability on the ground that these incentives and commissions are in the form of discounts and hence not liable to service tax as held by various decisions of the Tribunal.
The appellant has opposed the element of suppression on the ground that these records were placed before the audit in the year 2005 and 2007 and no such allegations were raised, therefore they cannot be saddled with the allegation of suppression of facts. It is agreed with the appellant that since the relevant details of the earlier audit dated 13.07.2005 were placed before the audit officers, the show-cause notice issued on 20.04.2009 alleging suppression of facts, mis-statement cannot be sustained in view of the principles laid down by the Hon’ble Supreme Court in number of decisions. Therefore, the demands are confirmed only for the normal period.
Ineligible cenvat utilized for payment of service tax on the Authorized Service Station Services - HELD THAT:- The appellant had availed cenvat credit on invoices raised by their sister concerns M/S. Marikkar Engineers and Marikkar Industries in respect of services rendered for certain cars and motorcycles which had been sub-contracted to their sister concerns. Since, we have held that on the warranty services the appellant is not liable to pay service tax based on the claims reimbursed by the vehicle manufacturers the cenvat credit cannot be allowed. Hence, the same is being denied.
Renting of immovable property - HELD THAT:- The Commissioner in the impugned order except mentioning to the affect that ‘the issue is no more res-integra in view of the retrospective amendment effect carried out to this service vide Finance Act, 2010’, there is no mention as to why and how the rental amount received by the appellant could be considered as renting of immovable property. The appellant has submitted that the renting of immovable property was for commercial purpose and the same is not liable to service tax in view of the decision in the case of Home Solution Retail India Ltd. Versus Union of India [2009 (4) TMI 14 - DELHI HIGH COURT] wherein the Hon’ble High Court observed that 'Section 65(105)(zzzz) does not in terms entail that the renting out of immovable property for use in the course or furtherance of business of commerce would by itself constitute a taxable service and be exigible to service tax under the said Act. The obvious consequence of this finding is that the interpretation placed by the impugned notification and circular on the said provision is not correct. Consequently, the same are ultra vires the said Act and to the extent that they authorize the levy of service tax on renting of immovable property per se, they are set aside.' - the demand is justified. Since the demand is for the normal period, the same is confirmed.
Conclusion - i) Reimbursements cannot form part of the value in view of the Supreme Court decision in the case of Union of India v. Intercontinental Consultants & Technocrats Pvt. Ltd. ii) Demands against Accident Repair Services under Annexure XIII & XIV confirmed for normal period. iii) The commission received by the appellant from the insurance companies and from the bank/financial institutions are liable to service tax under category of Business Auxiliary Service. iv) CENVAT credit denied due to non-liability of warranty services. v) Renting of immovable property is confirmed.
All penalties were set aside as the demands were confirmed only for the normal period, with interest applicable - appeal allowed.
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2025 (4) TMI 820
100% EOU - Refund claim - alleged lack of a direct nexus between input and output services - FIRC’s do not correlate to the export invoices - no nexus with the output services - HELD THAT:- It is an admitted fact that while submitting the refund claims, appellant have produced the relevant documents including invoices on which input service credit has been availed, certificate from bank certifying list of export services, copy of RC Register, extract of Cenvat Credit Register for the period April 2010 to June 2010 and copy of export of invoices for the period from January 2010 to March 2010. As regards the refund claim for the period from January 2011 to March 2011, the appellant had submitted the refund application along with extract of cenvat credit register for the period January 2011 to March 2011, input credit Register for the period January 2011 to March 2011 along with summary of input credit, list of import of services, payment and challan copies, list of export, billing list of export sales, invoice copies along with large number of documents including copy of ST-3 returns, ST-3 copy of the declaration etc and also corelation of input service towards output service. The above said documents are sufficient enough to sanction the refund under Rule 5 of Cenvat Credit Rules, 2004. Even if the Chartered Accountant (CA) Certificate was not according to the satisfaction of the Adjudication Authority, the claim made by the appellant under Rule 5 of Cenvat Credit Rules, cannot be rejected on such insubstantial grounds.
Conclusion - The definition of 'input service' under Rule 2(l) of the Cenvat Credit Rules, 2004, does not require a direct nexus between input and output services, especially for 100% EOUs.
Appeal allowed.
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2025 (4) TMI 819
Irregular availment of benefit of exemption of service tax under N/N. 18/2009-ST dated 07.07.2009 or N/N. 42/2012-ST dated 29.06.2012 on the commission paid to 'foreign selling/ marketing agents' - violation of the condition that cenvat credit should not be availed on the 'specified service' - HELD THAT:- As per N/N. 18/2009-ST and 42/2012-ST, a declaration is required to be made regarding non-availment of Cenvat credit on specified service. Further, for the period from June 2012 to March 2015, as per N/N. 42/2012-ST dated 29.06.2012 there is only one service that has been exempted from service tax that is services provided by a 'commission agent located outside India' under Section 66B of the Act. However, the adjudication authority has interpreted the words ‘specified service’ used for export of such goods and has referred to any 'other services' used for export of goods that were granted same exemption either in the same or similar Notification. The Respondent by adopting this interpretation, it was held that since appellant had availed CENVAT credit on GTA services/other services used for export of goods, appellant is not eligible to avail the benefit of exemption on 'commission paid to foreign selling/marketing agency'.
As regards the claim of the Appellant that the foreign commission agent is an 'intermediary' under the Place of Provision of Service Rules 2012, since the Appellant himself had admitted that the service provided by them as falling under 'Business Auxiliary service' and paid service tax over and above the exempted limit of 1% under N/N. 18/2009-ST or 10% under N/N. 42/2012-ST, hence their said contention is unsustainable.
As regards the claim of the Appellant that they are exempted from payment of service tax under the provision of Section 26(1)(E) of the Special Economic Zone Act, 2005 r/w Rule 31 of the Special Economic Rule, 2006, there are force in the above submission as regards that part of the exports from the Special Economic Zone. In spite of giving specific submission to that effect in the reply to show cause notice, it appears that the Adjudication authority has not considered the above aspect.
Extended period of limitation - HELD THAT:- The Appellant were submitting their returns in time and also complied with the conditions as stipulated. Facts being so, in the absence of any specific allegation regarding fraud, collusion, willful mis-statement or suppression of facts for evading payment of service tax, invoking the extended period of limitation for confirming demand is also unsustainable.
Conclusion - i) The Appellant had correctly availed the exemption for commission paid to foreign agents by fulfilling the notification conditions. ii) The interpretation that availing CENVAT credit on other services like GTA violated the conditions is rejected.
Appeal allowed in part.
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2025 (4) TMI 818
Classification of service - liquidated damages or declared services - bond amount recovered from employees leaving University before notice period, whether the amount forfeited from the students, who discontinue the course midway - HELD THAT:- The issue is no longer res integra, the issue is squarely covered by the decisions/judgments cited, supra. Premature leaving of the employment results in disruption of work and an undesirable situation. The provisions for forfeiture of salary or recovery of bond amount in the event of the employee leaving the employment before the minimum agreed period or the amount forfeited from the students, who discontinue the course midway cannot be considered as liquidated damage or service under the category of declared service. It can be considered as penalties for dissuading, to discourage and to deter such a situation.
Conclusion - The amounts recovered as bond amounts from employees and forfeited fees from students do not constitute a service under the category of declared service.
Appeal allowed.
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2025 (4) TMI 817
Refund of the amounts paid as service tax under reverse charge mechanism (RCM) - transportation charges paid to individual goods carriage/truck owners, who do not issue any consignment note by whatever name called - HELD THAT:- It is well settled that there is a distinction between an individual truck owner or the 'operator' and 'agency' in order to establish that the services of individual truck owners hired by the Appellant are not liable to service tax under the category of 'Goods Transport Agency' (GTA) in terms of Section 65(50b) read with Section 65(105)(zzp) of the Finance Act, 1994. Further, the individual truck owners have not issued any consignment note, by whatever name called.
Conclusion - The appellant's payment of service tax on transportation charges to individual truck owners was not warranted under the definition of 'goods transport agency' services, as no consignment notes were issued.
Appeal allowed.
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2025 (4) TMI 816
Levy of service tax - Erection, Commissiong or Installation Services - composite contract undertaken by the appellant - period 2005-06 to 2007-08 - HELD THAT:- In the facts and circumstances of the case and following the decision of the Hon'ble Apex Court in the case of Larsen & Toubro Ltd., [2015 (8) TMI 749 - SUPREME COURT] and the decision of this Tribunal, the composite contract for supply of goods and services is chargeable to service tax only under 'Works Contract' Service from 01.06.2007 and levy under any other category is not tenable prior to and after 01.06.2007. Therefore, the demand of service tax under the category of ‘Erection, Commissioning or Installation Services’ is unsustainable.
Conclusion - The composite contract for supply of goods and services is chargeable to service tax only under 'Works Contract' Service from 01.06.2007 and levy under any other category is not tenable prior to and after 01.06.2007.
Appeal allowed.
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2025 (4) TMI 774
Eligibility to file a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - appeal before the Supreme Court did not arise from a show cause notice or demand of duty - HELD THAT:- This Court in QUEST RETAIL PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER CGST AND ANOTHER [2023 (2) TMI 1397 - PUNJAB AND HARYANA HIGH COURT] relying upon the judgment of the Bombay High Court in the case of Nilkamal Limited and Ors v/s Union of India and Ors [2022 (11) TMI 1008 - BOMBAY HIGH COURT], set aside the impugned order and remanded the matter back to the designated Committee to pass a fresh order as per the clarificatory circular and judgment passed by Bombay High Court in Nilkamal Limited and Ors.
The impugned order dated 27.12.2019 is set aside. The matter is remanded back to the designated Committee to pass a fresh order as per the clarificatory circular - petition disposed off by way of remand.
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2025 (4) TMI 773
Demand of service tax from the respondent/assessee under the category “Site Formation Services” and “Construction of Industrial and Commercial Services” for the period from 16.6.2005 to 31.3.2008 - Invocation of extended period of limitation - HELD THAT:- The learned tribunal examined the facts of the case and found that the contract is clearly a comprehensive contract for the purposes mentioned above and the activity done by the assessee is in relation to commissioning of coal and not for site formation. The learned tribunal also referred to two decisions of the Co-ordinate Bench of the learned tribunal. Reference has been made to the decision of the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] wherein the Hon’ble Supreme Court held 'finding that Section 67 of the Finance Act, which speaks of “gross amount charged”, only speaks of the “gross amount charged” for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service element in the said contract. We find therefore that this judgment is wholly incorrect In its conclusion that the Finance Act, 1994 contains both the charge and machinery for levy and assessment of service tax on indivisible works contracts.'
The tribunal accepted the case of the assessee and held that no service tax is payable and the question of imposing penalty also does not arise.
Extended period of limitation - HELD THAT:- The department is required to show that there was omission and failure and suppression of material fact with an intent to evade payment of service tax. This having not been clearly spelt out in the show-cause notice, the case of the department cannot be improved at the stage of adjudication, nor has it been done so in the instant case. Therefore, this is a case where the extended period of limitation could not have been invoked by the department.
Conclusion - i) The composite contracts should not be artificially bifurcated for service tax purposes. ii) No service tax was payable for mining-related services prior to 01.06.2007, as clarified by the circular and legislative amendments. iii) The extended period of limitation could not be invoked without clear evidence of intent to evade tax, which was not present in this case.
Appeal dismissed.
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2025 (4) TMI 772
Levy of service tax - Sale of Space and Time for Advertisement - amounts received from sponsorship agreements for boxes and stands in the stadium constitute a taxable service or not - HELD THAT:- The issue stands already decided in the appellant’s favour in the appellant’s own matter by two earlier decisions of this Tribunal on which the Appellant has placed reliance. Relevant portions of this Tribunal’s decision in the case M/S. TAMILNADU CRICKET ASSOCIATION VERSUS THE COMMISSIONER OF CGST & CENTRAL EXCISE CHENNAI NORTH COMMISSIONERATE [2024 (4) TMI 471 - CESTAT CHENNAI], where it was held that 'the amount received as per sponsorship agreements for boxes and stands are not leviable to tax under Sale of Space for Advertisement and requires to be set aside.'
The facts of this case are no different and a perusal of the sponsorship agreement as available in the appeal records reveal that the terms therein too are similar to that in the decision reproduced above. There is no need to multiply the authorities except to point out that the decisions cited by the counsel for the appellant all attest to similar line of reasoning.
Conclusion - The sponsorship services related to sports events are not taxable under the "Sale of Space and Time for Advertisement" category, as they do not involve the sale of advertisement space but rather the granting of sponsorship rights.
The impugned order is set aside - appeal allowed.
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2025 (4) TMI 771
Classification of services - management, maintenance or repair service and manpower recruitment or supply agency service or not - liability to pay Service Tax for the period from October 2004 to December 2007 - HELD THAT:- The appellant has used materials such as cement, barbed wire, structural steel, etc., while rendering the service. Thus, it is evident that the appellant has utilized materials in the provision of the service of filling of ash at different low lying areas and widening of MGR track of railways. The services rendered along with materials are appropriately classifiable under the category of ‘works contract service’ as held by the Hon’ble Supreme Court in the case of Commissioner of Central Excise and Customs, Kerala v. M/s. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]. In these circumstances, the impugned demand pertaining to the period prior to the introduction of ‘works contract service’, is not sustainable.
The appellant had hired manpower for rendering the service to themselves. The service rendered by them is thus not liable to be categorized under the category of ‘manpower recruitment or supply agency service’ as manpower has not been recruited to M/s. NTPC. Thus, the classification of the said service under the category of ‘manpower recruitment or supply agency service’ to demand Service Tax in the impugned order, is not legally sustainable.
Since the demand itself is not sustainable, the question of demanding interest or imposing penalties does not arise.
Conclusion - The services rendered along with materials are appropriately classifiable under the category of 'works contract service'.
Appeal allowed.
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2025 (4) TMI 770
Classification of service - services of screening and grading of iron ore provided by the appellant - Business Auxiliary Service (BAS) or Mining Services - suppression of facts or not - extended period of limitation - HELD THAT:- In view of Board clarification vide letter dated 28.02.2007, the services undertaken by the appellant are rightly classifiable under ‘mining services’. Moreover, as rightly claimed by the appellant and relied upon by him with regard to definition of mining operations as per the MMDRA Act, 1957 and the decision by the Supreme Court in the case of Bharat Cocking Coal Vs. State of Bihar [1990 (8) TMI 394 - SUPREME COURT] wherein it is held that any ancillary process carried down for the preparation of minerals is a mining activity and hence, rightly classifiable under the newly introduced service mining services.
The Tribunal in the case of [2008 (5) TMI 248 - CESTAT BANGALORE] in similar set of facts observed that 'Once it is established that the activity of the appellant is mining,, it cannot be taxed under the Business Auxiliary Service for the period prior to 1-6-2007. Even when we examine the definition of business auxiliary service, it is seen that production which does not amount to manufacture comes under business auxiliary service.'
Conclusion - The services rendered by the appellant is nothing but a mining service and rightly classifiable under mining services with effect from 01.06.2007. It is also a fact that Revenue has being collecting the service tax under this category from 01.06.2007 onwards.
Appeal allowed.
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2025 (4) TMI 769
Denial of rebate claim - applicability of time limitation - HELD THAT:- Though the issue raised by the lower authorities were disputed at the time of issuing impugned order, all the issues are settled over a period of time as rightly claimed by the counsel - the appellant is entitled for the claim for rebate of Service Tax as per Notification No.12/2005-ST dated 19.04.2005 for the period from July 2007 to September 2007.
Conclusion - The appellant was entitled to the rebate claim for Service Tax for the period from July 2007 to September 2007, as per N/N.12/2005-ST dated 19.04.2005.
Appeal allowed.
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2025 (4) TMI 768
Levy of service tax - Business Auxiliary Services (BAS) - target-oriented incentives received by the Appellant - benefit of cum tax.
Target oriented incentives - HELD THAT:- The issue is no more res integra as the issue is settled by the Tribunal in the matter of M/s. Roshan Motors Ltd vs. CC, Dehradun [2020 (12) TMI 1014 - CESTAT NEW DELHI], wherein it is held that the dealers and manufacturers work on principal to principal basis and it was further held that sale promotion activities are undertaken by the dealer is for mutual business of a dealer and manufacturer. Accordingly CESTAT, New Delhi held that such incentives cannot be treated as consideration for any service. The dealing is on principal to principal basis only.
Service Tax on commission received from financial institutions - HELD THAT:- Since the Respondent accepted the Tax liability on cum-tax value of the commission received from financial institutions and paid with interest before issue of the show-cause notice, the said amount is sufficient to meet the demand against the appellant.
The demand confirmed by the adjudicating authority against the commission received by the appellant from financial institution for extending financial assistance to the extent of Rs.6,84,254/- and interest of Rs.39,695/- on cum-duty basis is upheld. Remaining demands against appellant and penalty imposed by the adjudicating authority are set aside.
Conclusion - The target-oriented incentives do not constitute consideration under BAS when the dealer-manufacturer relationship is on a principal-to-principal basis.
Appeal allowed in part.
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2025 (4) TMI 767
Failure to discharge appropriate Service Tax on Banking and Financial Services - whether the appellants are required to discharge service tax on different services rendered by them to their Members? - HELD THAT:- It is not in dispute that the appellant is registered under Karnataka Cooperative Society Act, 1959 and the Membership is restricted to the persons staying within the territorial limit of Dakshina Karnataka including villages of the district and all the taluks of the Udupi district. Also, it is not in dispute that appellant being a cooperative society registered under the Karnataka Cooperative Society Act, 1959. In the impugned orders, the lower authorities considering the appellant being a commercial concern ignoring the principles of mutuality of interest held that the services rendered by the appellant to its Members are taxable under the category of ‘Banking and other Financial Service’.
From the records and the bye-laws placed by the appellant, it is found that various services of advances, loan, etc., provided by the appellant to its Members exclusively and the services are limited to Members only. In these circumstances being a registered cooperative society, the principle laid down by the Hon’ble Supreme Court in the case of State of West Bengal vs. Calcutta Club Ltd.’s case [2019 (10) TMI 160 - SUPREME COURT] is squarely applicable.
Conclusion - The incorporated cooperative societies operating on mutuality principles are not liable for service tax on services provided to their members.
Appeal allowed.
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2025 (4) TMI 766
Failure to discharge appropriate Service Tax on Banking and Financial Services - whether the appellants are required to discharge service tax on different services rendered by them to their Members? - HELD THAT:- It is not in dispute that the appellant is registered under Karnataka Cooperative Society Act, 1959 and the Membership is restricted to the persons staying within the territorial limit of Dakshina Karnataka including villages of the district and all the taluks of the Udupi district. Also, it is not in dispute that appellant being a cooperative society registered under the Karnataka Cooperative Society Act, 1959. In the impugned orders, the lower authorities considering the appellant being a commercial concern ignoring the principles of mutuality of interest held that the services rendered by the appellant to its Members are taxable under the category of ‘Banking and other Financial Service’.
From the records and the bye-laws placed by the appellant, it is found that various services of advances, loan, etc., provided by the appellant to its Members exclusively and the services are limited to Members only. In these circumstances being a registered cooperative society, the principle laid down by the Hon’ble Supreme Court in the case of State of West Bengal vs. Calcutta Club Ltd.’s case [2019 (10) TMI 160 - SUPREME COURT] is squarely applicable.
Conclusion - The incorporated cooperative societies operating on mutuality principles are not liable for service tax on services provided to their members.
Appeal allowed.
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2025 (4) TMI 765
Exemption from service tax - Classification of services provided by M/s Chinki Construction Private Limited as a sub-contractor - commercial and industrial services or not - HELD THAT:- The scope of work in as many as 4 of the LOA’s relate to construction of the infrastructure for the power station while one relates to provisioning of the residences for the employees of BSEB. None of these can certainly be said to be concerned with construction, falling within the ambit of any commercial activity. BSEB being a 100% subsidiary of the Government of Bihar, falls well within the scope of a government body and hence would lie within the ambit of clarification issued vide the said circular 80/10/2004-ST dated 17.09.2004, to suggest and indicate it as of non-commercial in nature and thereby not leviable to tax.
Further, vide its circular no.147/16/2001 dated 21.10.2011, issued by the CBEC in the context of commercial construction/infrastructure development projects of roads, airports, dams, tunnels etc., regarding levy of Service Tax on various service providers engaged/associated with such construction work, it is clarified that the service provided by the sub-contractor to the main contractor under works contract service would be eligible to avail the exemption as available to the main contractor providing Works Contract Service, in relation to the said projects.
The Revenue has made the allegations, merely by combining different services, viz., construction services (commercial or industrial) as defined under Section 65(25b), construction of residential complex service as defined under section 65(105)(zzzh) read with 65(30a) and site formation services as defined u/s 65(105)(zzza) read with Sec.65(97a) of the Finance Act, 1994, without recording transaction made in each taxable services and without calculating value, tax on individual categories of services separately in distinguishable manner of applicability of classification as mandated in law before 30.06.2012, i.e., before introduction of ‘Negative List’. It appears that the revenue has simply overlooked the various legal provisions, relatable to execution of a works contract and clarifications as issued by way of circulars referred in earlier paras, have resorted to this sort of an exercise, merely for the sake of issuing the demand note. Therefore, the impugned order is no more than being based on mere surmise and conjecture.
The jobs undertaken by the appellant, were in connection with or in the category of or a part of the work undertaken by them in construction of the residential complex. It cannot be considered as a job separately for site levelling and slope protection work. The construction of the boundary wall, security room and levelling of the premises is part and parcel of the work, construction of residential complex at the sub-stations of Bihar Electricity Board.
Conclusion - The services provided by the appellant were non-commercial and related to government infrastructure projects, thus exempt from service tax.
There are no merit in the order appealed, being not in accordance with law - appeal allowed.
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