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Service Tax - Case Laws
Showing 501 to 520 of 31549 Records
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2025 (4) TMI 448
Levy of service tax - Support Services of Business or Commerce - subvention amount received by the appellant - HELD THAT:- The present Statement of Demand has been issued premised on the allegations mentioned in the previous SCNs which stood adjudicated and the appeals preferred against the impugned Orders therein have been decided by this Tribunal in the appellant’s favour in [2023 (2) TMI 830 - CESTAT CHENNAI] - Thus, the issue is no more res-integra and stands decided in the appellant’s favour not only by virtue of the aforesaid decision in the appellant’s own case but also the decisions relied upon by the appellant as aforementioned.
Conclusion - BCCI and similar cricket associations are not commercial entities, and their activities do not constitute business or commerce for service tax purposes.
Appeal allowed.
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2025 (4) TMI 447
Calculation of service tax - inclusion of amount received by CSC Publications and Ramiah Publications, who are independent entities, for sale of course material kits supplied and payment for which was routed through the appellant, in the value of taxable services provided by the appellant - HELD THAT:- A similar issue had come up for consideration before the Hon’ble High Court of Punjab & Haryana in the matter of CCE, Chandigarh- I v. Pinnacle, [2014 (8) TMI 149 - PUNJAB AND HARYANA HIGH COURT] where it was held that 'the order of the Tribunal to exclude the cost of such material from the quantification of the service tax provided by the assessee have been rightly allowed. The study material supplied by the Bulls Eye is quantifiable separately. The condition in the circular relates to the services of reading material and text books provided by the assessee-institute and not books purchased from another supplier. Such goods can be quantified by the price paid. Therefore, the amount of such goods have been rightly excluded in terms of Notification No. 12/2003-S.T., dated 20-6-2003.'
The Honourable Supreme Court has in the case of UOI v Intercontinental Consultants and Technocrats Pvt Ltd, [2018 (3) TMI 357 - SUPREME COURT], affirmed the decision of the Delhi High Court in [2012 (12) TMI 150 - DELHI HIGH COURT] wherein Rule 5(1) of the Service Tax Valuation Rules, 2006 which provided for inclusion of expenditures or costs incurred by the service provider in the course of providing taxable services, in the value of such taxable services, was stuck down as ultra vires Section 66 and Section 67 of the Act and as travelling beyond the scope of the said sections. Thus, the very proposal in the SCN has been rendered meritless.
Conclusion - The value of goods sold separately from services should not be included in the taxable value of services.
The demand for service tax on the value of course materials is unsustainable and that the invocation of the extended period is unjustified - appeal allowed.
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2025 (4) TMI 446
Liability of service tax - Intellectual Property Service prior to July 2012 - transfer of technical know-how to the appellant - extended period of limitation - HELD THAT:- In the instant case, it is an admitted fact that the technical know-how was transferred to the appellant in 2009, soon after the signing of agreements. It is also an admitted fact that the appellant shared a portion of the PGCIL business with GANZ & ZTR in lieu of transfer of technical know-how. It is noted that no service tax was payable on technical know-how service under the category of intellectual property service prior to this date. IPR service was covered under section 66E (c) with effect from 1.7.2012, and the confirmation of demand on technical know-how service cannot be sustained prior to this date. It is further noted that transfer of technical know-how service cannot be treated as IPR as the same was not registered under any law in India. Accordingly, no service tax can be confirmed under this head.
In the case of Chambal Fertilizers & Chemicals Ltd. vs. Commissioner of Central Excise, Jaipur-I [2016 (8) TMI 150 - CESTAT NEW DELHI] this Tribunal has observed that 'It has been held that to be categorized for service tax purpose under IPR, such right should have been registered with trade mark/patent authority. In the present case, admittedly, there is no right recognized as IPR under any law for the time being in force in India. As such, there can be no provision of IPR service for tax liability on reverse charge basis.'
Conclusion - The appellant is not liable for service tax on the transfer of technical know-how prior to July 2012, as it do not qualify as an Intellectual Property Right under Indian law.
The impugned order is not sustainable and the same is set aside. The appeal is, accordingly, allowed.
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2025 (4) TMI 445
Levy of service tax - Supply of Tangible Goods service - lease of plant by the Appellant to its customer - transfer of the right to use goods or not - effective control of the plant is not transferred by the Appellant to the customer, given that the Appellant itself undertook the operation and maintenance of the plant - HELD THAT:- The terms of the lease agreement clearly state that the goods are to be delivered by the Appellant to its customer, and on a plain reading of the terms of the agreement, consensus-ad-idem as to the identity of the plant is apparent. It is further noted that clause 6 clearly states that the lessee has the right to use the plant during the lease period and clause 7 states that the plant is in physical possession and control of the lessee, thereby showing that the right of the customer to use the plant was at the exclusion of the Appellant. Further, the Appellant has undertaken not to transfer the plant to another party during the lease period in clause 12. Therefore, the terms of the lease agreement cumulatively satisfy the tests regarding transfer of right to use the goods as laid down by Hon’ble Supreme Court in BSNL vs. Union of India [2006 (3) TMI 1 - SUPREME COURT].
On examination of the terms of the Agreement, we also find that the Operation and Maintenance agreement contains distinctive scope, rights and liabilities, and the rights and liabilities under the Lease Agreement remain separately and independently enforceable. The transfer of full possession and control of the plant to the customer vide the lease agreement is uninfluenced by the existence of the operation and maintenance agreement. Once the plant is in complete physical possession and control of the customer, the provision of operation and maintenance services by the Appellant would not alter the nature of the transaction to make it a supply of tangible goods service, and such transaction would remain to be a ‘deemed sale’.
The demand of service tax of Rs.11,12,977/- along with interest could not have been raised by invoking of extended period of limitation. As the demands itself are being set aside, penalty under Section 78 is also liable to be set aside.
Conclusion - The lease of the plant is a 'deemed sale' and not a supply of tangible goods service, exempting it from Service Tax.
The appeal filed by the Appellant is allowed on merits as well as on limitation.
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2025 (4) TMI 444
Short payment of service tax - underreporting of value of taxable services in sales ledger compared to the amounts reflected in the 26AS statements - case of appellant is that whole demand is based on 26-AS statement (TDS statement) of their clients which is generated as per income tax provisions and cannot be taken as evidence in service tax law in his favour - HELD THAT:- The first adjudicating authority and the lower appellate authority Commissioner (Appeals) have erred in holding that “the argument of the appellant is not acceptable that the 26-AS statement cannot be used for detection of any other tax. It was the duty of the department that after proper inquiry, it should have clearly narrated in the show cause notice that on which taxable service the service tax was not paid or short paid. It was not proper for the department to solely rely upon the 26AS statement of some of the clients of the appellant and raise demand of service tax solely on its basis. The department should have collected independent evidence and material to clearly show that the appellant failed to pay proper service tax but the department failed to collect independent evidence and reliable material for raising the demand of service tax on differential basis.
The Commissioner (Appeals) had no idea whether the total service tax liability was discharged by the appellant or not. In these circumstances, it was not proper on the part of Commissioner (Appeals) to have concluded that the lower adjudicating authority has rightly confirmed the demand of service tax along with interest and rightly imposed penalties upon them. The order of the Commissioner (Appeals) is not sustainable and is liable to be set aside.
Concluson - In the circumstances of the case it will be proper if the matter is remanded to the first Adjudicating Authority with the direction that it should inquire into the matter and scrutinize the documents pertaining to the services rendered and liability of Service Tax and should give a clear conclusion whether the total service tax liability was discharged by the appellant or not, independent of the 26-AS statement.
Appeal allowed by way of remand.
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2025 (4) TMI 443
Levy of service tax - security agency services - it is submiited by appellant that the services rendered by them in course of their regular duties to public sector undertakings and there was no commercial activity - HELD THAT:- This issue is no longer res integra being decided by the Tribunal in the cases of Commandant Home Guard Training Centre vs. CGST, Udaipur 2021 (7) TMI 195 - CESTAT NEW DELHI] and Deputy Commissioner of Police, Jodhpur vs. CCE & ST, Jaipur [2016 (12) TMI 289 - CESTAT NEW DELHI], wherein the Tribunal has decided the issue in favour of the appellants holding that the police department which is an agency of state government, cannot be considered to be a person engaged in the business of providing security services; consequently, the activity undertaken by the police is not covered by the definition of “security agency” under Section 65(94) of the Finance Act, 1994; it is also found that in terms of CBEC Circular on the subject, the fees collected by the police department is in the nature of fee fixed for the statutory function which has been deposited into the government treasury; in the light of CBEC Circular also, there can be no levy of service tax on such activities.
Conclusion - The police departments, as state agencies, are not engaged in the business of providing security services and thus do not fall under the definition of "security agency" per Section 65(94) of the Finance Act, 1994.
The impugned order cannot be sustained. The appeal is, accordingly, allowed.
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2025 (4) TMI 374
Nature of activity - service or manufacture? - embroidery of textile which is a separate decorative process rather than an intermediate textile processing step - exemption under Entry No.30(ii)(a) of the Mega Exemption N/N. 25/2012-ST - HELD THAT:- The activity of embroidery carried on by the appellant has been held to be manufacture even by CBIC vide Letter dated 15th July, 2011; the said letter clarified that embroidery work done on job work basis amounts to manufacture and does not fall within the purview of Business Auxiliary Service.
Thus, by relying upon the said letter issued by the Revenue, the Commissioner of CGST, Rohtak on identical facts in the matter of Shee Bankey Bihari Embroidery vide its OIO dated 29th July, 2012 has held that the activity of embroidery amounts to manufacture and is not subject to service tax.
In the present case, the SCN was issued entirely based on the amount available in Form 26AS for the financial year 2015-16 and 2017-18 to levy service tax. It has been consistently held by the Tribunal and other Courts that service tax cannot be demanded merely on the basis of Form 26AS without examining and analyzing the activity carried on by the appellant. Further, it has also been held by the Tribunal that the extended period cannot be invoked merely on the basis of difference in Form 26AS and ST-3 Returns.
Conclusion - The embroidery is a manufacturing activity exempt from service tax, and the demand based on Form 26AS and extended period invocation are unjustified.
The impugned order set aside - Appeal allowed.
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2025 (4) TMI 373
Levy of service tax - franchise services or not - agreement between the respondent and Microsoft constitutes a "franchise" under Section 65(47) of the Finance Act, 1994 - reverse charge mechanism - HELD THAT:- After perusal of various clauses of the agreement which clearly state that the agreement is non-exclusive between the parties and Microsoft makes software and hardware available to the respondent on a non-exclusive basis.
Further it is found that the there is not a single word of franchises/franchisor/franchisee used in the agreement between the respondent and Microsoft and Microsoft has not given any representational rights to the respondent’s company and the respondent have only right to sell the goods which does not fall within the ambit of a franchise. In this regard, it is pertinent to refer the decision of the Tribunal in the case of Tata Consultancy Services Ltd [2019 (6) TMI 109 - CESTAT MUMBAI] wherein it has been held that 'In this case the so called Sub Certifying authorities and Sub CA Administrators (Sub CAA), Registering Authorities and RA-Administration appointed by appellants have any authority to issue DSC certificates, representing them to be issued by appellant. Such transfer of right granted to appellant, by the certifying authority in terms of IT Act, 2000, is also not permissible. It is only the Appellants who could have issued the Digital Signature Certificate and this could not have been done by any other person or agency appointed by appellant. Hence mere act of collecting the applications and verification of the same for onward submission to the appellant cannot be termed as “grant of representational rights”.'
Further, in terms of the agreement, the purchase price of Microsoft OEM pack was bifurcated into two components i.e. hardware price and software price. The cost of hardware purchase was paid as per the prevailing ‘royalty and price list’ and was to be paid to the authorized replicators - The agreement between the respondent and Microsoft was on principal to principal basis and the said agreement was executed purely on commercial and as trading transaction and it does not grant any representational right to the respondent so as to fall under the ambit of franchise service. In fact, the relationship between the respondent and Microsoft was that of a buyer and a seller and not of a franchisee and a franchisor.
The learned Commissioner has analyzed the terms & conditions of the agreement and has rightly come to the conclusion that the agreement between the respondent and Microsoft does not create franchise service.
Conclusion - The respondent is not liable for service tax on the payments made to Microsoft under the reverse charge mechanism.
There are no infirmity in the impugned order - appeal of Revenue dismissed.
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2025 (4) TMI 372
Rejection of prayer of appellant for interest on delayed sanction of refund - grant of interest from expiry of three months from the date of application till payment of refund in terms of Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - HELD THAT:- The Hon’ble Bombay High Court in the appellant’s own case [2019 (3) TMI 349 - BOMBAY HIGH COURT] has allowed the interest on delayed sanction of refund.
Hon’ble Punjab & Haryana High Court in the case of Om Refoils Ltd [2018 (2) TMI 36 - PUNJAB AND HARYANA HIGH COURT] has held that interest is payable immediately after expiry of three months from the date of application.
Hon’ble Apex Court in the case of Ranbaxy Laboratories Ltd [2011 (10) TMI 16 - SUPREME COURT] has held that interest is payable on the amount refunded to the assessee from the expiry of three months from the date of application till the date of payment of the amount of refund sought under Section 11B of the Central Excise Act.
Conclusion - The appellant is entitled to get the interest from the expiry of three months from filing the first application seeking refund at the rate as prescribed under the law.
Appeal allowed.
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2025 (4) TMI 371
Recovery of service tax with interest and penalty - services provided by the appellant to Indian Railways and IIT Kanpur qualify as "original works" under the relevant service tax exemption notifications - partail reverse charge mechanism - HELD THAT:- After having examined adjudicating authority has concluded that these pertain to the Original Works. Revenue in their appeal has made a sweeping statement without pointing out to a single order which were in relation to some other activities, which is not in nature of original works in absence of anything specific, there are no merits in the appeal filed by the revenue on this account. Further it is found that impugned order not only drops the demand for this reason only, but in the impugned order has gone ahead to interpret the phrase “original work” used in the N/N. 25/2012-ST dated 20.06.2012. On the basis of his interpretation of the said phrase, he has concluded that all these work orders would qualify for exemption under that notification. In their appeal revenue has not specified any reason to question the interpretation placed. In absence of any challenge to the interpretation placed in the impugned order to phrase “original works” the ground taken in the appeal is not sufficient to dislodge the findings recorded.
In respect of the services provided to Madhyanchal Vidyut Vitran Nigam Ltd the demand has been confirmed after allowing the benefit of abatement. Appellant do not dispute the leviability of service tax, submit that amount of service tax due has been paid by them by taking abatement as applicable. Also they claim that they are liable to pay only 50% of the service tax due in terms of Notification No 30/2012-ST dated 20.06.2012.
The demand in respect of this needs to be worked out and adjusted against the amount already paid. For this limited purpose the matter needs to be remanded back to the Original Authority. The quantum of penalty if any imposable would be determined in case any amount of tax is due.
Conclusion - The appellant's appeal is allowed regarding services to Railways and IIT Kanpur, while the matter concerning Madhyanchal Vidyut Vitran Nigam Ltd. is remanded for recalculation. The revenue's appeal is dismissed.
Appeal disposed off.
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2025 (4) TMI 370
Liability of appellant the Central Industrial Security Force (CISF) to pay service tax for providing Security Agency Services (SAS) to Bharat Dynamics Ltd. from 18.04.2006 to 31.12.2011 - levy of interest and penalty - HELD THAT:- There is no dispute on the merit of leviability of service tax under the head Security Agency Services, therefore, the leviability of service tax for the period beyond 01.04.2009, as held by the Adjudicating Authority, is correct and there are no infirmity in the said order.
Levy of interest thereon in respect of service tax short paid/not paid/late paid - HELD THAT:- The Statutory Provision under Section 75 of the Finance Act is quite clear that for any delayed payment, amount is liable to be levied to service tax or service tax short paid/not paid, interest is payable. Since this is a Statutory Provision under the Act, and the Tribunal being a creation of Statute, it cannot go beyond the provision of the Statute itself. Therefore, the imposition of interest under Section 75 to the extent of demand upheld by Commissioner is correct and we upheld the same. However, this amount needs to be calculated and to be paid by the appellant.
Imposition of penalty under Section 78 - HELD THAT:- Admittedly, CISF is Central Armed Police Force under the Ministry of Home Affairs. The charges for invoking the extended period and levy of penalty is contained in Para 8 of the show cause notice from which, there are no substantive and positive evidence which would have required imposition of penalty under Section 78. A mere delay due to interpretational issue cannot be termed as a deliberate attempt with an intent to evade payment of service tax. The Department had to come out with ad-hoc exemption to waive the demand for the period prior to April 2009. In this case, it is also apparent that the CISF on their own has also paid certain amount - there are much force in the argument of the Learned Advocate that the elements required for imposition of penalty under Section 78 is not available in the factual matrix of the case and therefore the imposition of penalty under Section 78 by the Adjudicating Authority is not sustainable and therefore it is set aside to that extent. In so far as, penalty under Section 77 is concerned, in the facts of the case, this penalty is also not sustainable as it is already held there could have been a genuine interpretational issue in regard to payment of service tax especially in view of exemption notification issued by the Government as well as further clarification issued and their being a Government Agency, it is found that penalty imposed under Section 77 by the Adjudicating Authority is not sustainable and therefore we set aside the same.
The impugned order is upheld in so far as it relates to the demand of the duty and imposition of interest. However, it is set aside to the extent of imposition of penalty under Section 78 and under Section 77.
Conclusion - i) The appellant is liable for service tax for the period beyond 01.04.2009. ii) The imposition of interest under Section 75 is upheld, with the amount to be calculated and paid by the appellant. iii) Penalties under Sections 77 and 78 are not sustainable and are set aside.
Appeal allowed in part.
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2025 (4) TMI 316
Entitlement for exemption under Sl.No.13 of the N/N. 25/2012-ST dated 20.06.2012 - services of works contract provided by the appellant within the residential complex/commercial premises - Penalty imposed under Section 78 and 77 of the Act.
HELD THAT:- The construction activity performed by the appellant was within the residential complex/commercial premises. The interpretation placed by the appellant by relying on the definition of “general public” that it refers to body of people which in the present case are the residents of the complex and also the visitors to the residents and is defined by that common quality of public, has not merits. The factors stated in the definition are not satisfied when the roads are built for any residential or commercial complex in as much as by its very nature, the access to the roads built within the complex has restricted access and is not open to the public at large.
The appellant cannot claim that there is any error. On the other hand, the appellant had deliberately avoided the proceedings. The plea taken by the appellant in this regard is a lame plea and do not merit consideration.
Penalty imposed under Section 78 and 77 of the Act - HELD THAT:- The appellant was registered with the Service Tax Department, however, they had not filed the service tax returns (ST-3). It is also on record that the appellant had collected service tax from the clients but failed to credit the service tax to the Government exchequer. The conduct of the appellant clearly reveals the intent to evade the service tax liability by suppressing the assessment of the taxable value and the liability under the provisions of the Act. There are no reason to differ with the Authorities below in imposing penalty under Section 77 and 78 of the Act. On the same considerations, the extended period has been rightly invoked.
Conclusion - i) The exemption under Notification No.25/2012-ST is strictly applicable only to roads intended for use by the general public. Roads constructed within private residential or commercial complexes do not qualify for this exemption due to their restricted access nature. The imposition of service tax on the appellant for the services rendered affirmed, as they did not meet the exemption criteria. ii) The penalties imposed under Sections 77 and 78 upheld.
The impugned order upheld - appeal dismissed.
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2025 (4) TMI 315
Entitlement to refund of unutilized CENVAT credit lying in the CENVAT account at the time of surrender of service tax registration following closure of business - Interest on refund under Section 11BB of the Central Excise Act, 1944 - HELD THAT:- The issue is settled by the decision of the Hon'ble Apex Court in the case of Union of India vs. Slovak India Trading Co Pvt. Ltd. [2007 (1) TMI 556 - SC ORDER] which affirmed the decision of Karnataka High Court [2006 (7) TMI 9 - KARNATAKA HIGH COURT]. In this decision, the Hon'ble Karnataka HC has held 'The Tribunal has noticed that various case laws in which similar claims were allowed. The Tribunal, in our view, is fully justified in ordering refund particularly in the light of the closure of the factory and in the light of the assessee coming out of the Modvat Scheme. In these circumstances, we answer all the three questions as framed in para 17 against the Revenue and in favour of the assessee.'
When Rule 5 of CENVAT Credit Rules, 2004 is read in conjunction with Section 11B, it provides a comprehensive framework for refund of CENVAT credit in cases of closure of business. Rule 5 specifically deals with refund of CENVAT credit, and while it primarily addresses export scenarios, it does not expressly prohibit refund in other circumstances. The adaptable provisions of the Act through Section 83 of the Finance Act enable refund to be routed through Section 11B of the Central Excise Act read with Rule 5 of CENVAT Credit Rules. This interpretation is consistent with the principle that the CENVAT credit is a vested right of the assessee which cannot be extinguished merely because the business has closed down - the appellant is eligible for the refund of unutilized Cenvat credit.
Interest on refund claim - HELD THAT:- The Appellant had filed the refund application within the stipulated time and has been wrongfully denied the refund. Therefore, the Appellant is entitled to interest from the date of expiry of three months from the date of the refund application until the date of actual refund.
Conclusion - i) The appellant is eligible for the refund of unutilized Cenvat credit of Rs. 5,58,015/-. ii) The appellant is eligible for interest as per Section 11BB of Central Excise Act from three months after the date of application till the date of grant of refund.
Appeal disposed off.
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2025 (4) TMI 314
Recovery of wrong availment and utilization of input service credit with interest and penalty - appellant has taken input service credit under RCM - application of Rule 3(4)(e) of CCR, 2004 - HELD THAT:- The appellant has availed CENVAT Credit amount of Rs.30,18,941/- under RCM in June, 2017 prior to the date of the payment of the said amount to Government Exchequer and filing of the ST-3 on 27.12.2017. I find that there is no dispute regarding the receipt of the service by the appellant and issue of the corresponding invoice for the same prior to 01.07.2017. Thus, there is no dispute regarding the eligibility of the credit for the appellant. The ground under which the input service credit taken by the appellant under RCM basis during June, 2017 was that the said amount was deposited to the Government Exchequer under Challans dated 27.12.2017. There is no infirmity in availing the credit by the appellant when the eligibility of credit was not in dispute.
It is observed that in June, 2017, when GST was introduced there were many issues related to availment of Cenvat credit. There was no clarity regarding availment of credit in respect of the services rendered and invoices issued prior to 1st July 2017 and payments made after 01.07.2017. In the present case, the appellant has received the service and invoice prior to 01.07.2017, but payment of service tax was not made as on 01.07.2017, under reverse charge. To avoid any issue on the availment of credit later, they took the purported credit amount of Rs.30,18,941/- in their credit ledger in the month of June, 2017. It is observed that if the credit is not taken prior to 01.07.2017 and transferred through TRAN-1, the appellant would be eligible for refund of the said credit by cash as per the provisions of section 142(3) of the GST Act.
This view has been held by the Hon'ble Madras High Court in the case of Ganges International Pvt. Ltd. v Assistant Commissioner of GST & C.Ex, Puducherry [2022 (3) TMI 544 - MADRAS HIGH COURT] where it was held that the applications should be considered for carrying forward the accrued credit to the electronic credit ledger of the GST regime, not for refund in cash.
Thus, by relying on the decisions rendered by the Hon’ble Madras High Court, it is held that the appellant is eligible for taking, utilizing and transferring the input tax credit of Rs. 30,18,941/- payment of which under RCM was made on 27.12.2017.
Conclusion - The appellant is entitled to the CENVAT Credit under the transitional provisions of the GST regime.
The demands confirmed in the impugned order set aside - appeal allowed.
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2025 (4) TMI 313
Classification of service - appellant providing services in the nature of yoga and yoga classes - classificable under Commercial Training or Coaching Services or not - scope of ‘services’ under the Negative List regime - exemption under N/N. 25/2012-ST dated 20.06.2012 - invocation of extended period of limitation - penalty - HELD THAT:- Recently, this Tribunal in the case of Patanjali Yogpeeth Trust Vs. CCE, Meerut-I [2013 (8) TMI 804 - CESTAT NEW DELHI], in more or less similar circumstances where the appellant therein was also engaged in the activities of provided services relating to health and fitness by way of teaching yoga and meditation and failed to discharge service tax, analysing the definition and referring to an earlier judgment of Delhi Bench of this Tribunal, reported as Patanjali Yogpeeth Trust Vs. CCE, Meerut-I which is also relied upon by the learned Commissioner in the impugned order. It is observed by the Tribunal that 'The phrase "Yoga" and "Meditation" have been specifically mentioned in the definition of 'health and fitness service' as defined under Section 65 (51) of the Finance Act, 1994. The claim of the appellant that they are providing treatment for specific ailments being suffered by the person is not supported by any positive evidence. Instructions on 'Yoga' and "Meditation" in these camps are not imparted to individual but to the entire gathering together. No prescriptions are made for any individual in writing, diagnosing and treating the specific ailment/ complaint of any individual.'
There are no reason not to follow the said judgment of the Tribunal which has been upheld by the Hon’ble Supreme Court. Consequently, the conclusion of the learned Commissioner that the services which are in the nature of yoga, rendered by the appellant, fall under the taxable category of “health and fitness service” during the period October 2008 to June 2012, agreed upon.
Leviability of service tax on TTC and ATTC and also Vastu Shastra - HELD THAT:- There is no valid reason not to accept the said reasoning of the Commissioner as no contrary evidence has been placed on record to buttress their claim that the courses viz. TTC, ATTC and Vastu Shastra offered by the appellant do not fall under the category of ‘Commercial Training or Coaching Centre Service’.
Levy of service tax under the Negative List w.e.f. 01.07.2012 - HELD THAT:- The learned Commissioner in the impugned order has not disputed that the appellant are a charitable trust registered under Section 12AA of the Income Tax Act, 1961; hence, the services of the yoga provided by them covered under the said Notification which has been given effect from 01.07.2012 to 20.10.2015, the demand confirmed therefore not sustainable.
Extended period of limitation - HELD THAT:- This Tribunal in Patanjali Yogpeeth Trust’s case, the facts of which is more or less similar to the present one, upheld the invocation of extended period of limitation after analysing and following the principles of law on the subject.
Conclusion - i) Service tax on the activity of yoga for the period October 2008 to 30.06.2012 under the category of ‘health and fitness service’, yoga courses of TTC, ATTC and Vastu Shastra under ‘Commercial Training and Coaching services’ is liable to be paid; however, the exact amount of demand, applicable interest and penalty to be computed for the said period after taking note of the receipts not connected with the said activities as claimed by the appellant. ii) Levy of service tax for the period 01.07.2012 to 31.03.2014 be examined in the light of the 11C Notification No.42/2016-ST dated 26.09.2016.
Appeal disposed off.
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2025 (4) TMI 249
Violation of principles of natural justice - due service of SCN or not - opportunity of hearing granted or not - HELD THAT:- Considering the submissions made by both the sides and on perusal of the material on record, it appears that the petition can be disposed of without considering the merits of the case in view of the fact that no notice or opportunity of hearing as contemplated under the provisions of Section 33 of the Central Excise Act which are required to be applied to the Finance Act, 1994 as per the provisions of Section 83 of the said Act was issued.
In similar facts, this Court in case of Regent Overseas Pvt. Ltd. and another vs. Union of India [2017 (3) TMI 557 - GUJARAT HIGH COURT] it was held that 'apart from the fact that the notice of hearing has not been served in the manner contemplated under section 37C of the Act, the notice itself suffers from a legal infirmity inasmuch as it fixes three dates of hearing at a time, which is not in consonance with the proviso to section 33A of the Act.'
Thus, without entering into the merits of whether notice for personal hearing was served upon the petitioner or not, it is natural that no one could remain present for personal hearing on behalf of the petitioner on the dates specified in the notice and respondent no. 2 could not have proceeded on the footing that three adjournments have been granted so as to pass an ex-parte order.
Conclusion - Such order is clearly in breach of the principles of natural justice warranting interference of this Court in exercise of extra ordinary jurisdiction vested under Articles 226 and 227 of the Constitution of India.
Impugned order dated 26/05/2022 as well as order in appeal dated 24/02/2023 passed by respondent no. 2 and respondent no.3 respectively are hereby quashed and set aside and the matter is restored to the file of the adjudicating authority respondent no. 2 to decide the same in accordance with law after affording adequate opportunity of hearing to the petitioner - Petition allowed by way of remand.
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2025 (4) TMI 248
Liability to pay service tax - Online Information and Database Access or Retrieval (OIDAR) services contracted by the overseas head office of the appellants with Computer Reservation System (CRS)/Global Distribution System (GDS) companies to be supplied - liability of Indian branch office of the appellants would be liable to pay service tax on reverse charge basis for such services under Section 66A ibid during the period 18.04.2006 to 30.06.2012.
HELD THAT:- In the present factual matrix of the case, the OIDAR service has been provided by M/s Abacus Distribution Systems PTE Ltd., Singapore to the appellant’s head office situated in Hong Kong, in terms of agreement dated 05.04.1990; and such services provided by a person situated in Singapore to another person situated in Hong Kong are not covered under the scope of levy of service tax under Section 66 ibid. It also transpires on simple reading of the legal provisions under Section 66A ibid, that only in respect of taxable services received by a person in India, on which service tax levy has been imposed under Section 66 ibid, the deeming provision of treating the recipient of service, as though he had himself provided such service in India for the purpose of paying service tax would apply. In the absence of statutory levy of service tax on the OIDAR services in the present case, the appellants cannot be brought under the scope and ambit of Section 66A ibid, in order to confirm the demands of service tax as proposed in the SCNs.
The agreement/arrangement by which the appellants had given their equipment for providing OIDAR service is restricted only to those two persons and does not involve the appellants situated in India. Therefore, such services involved between two persons situated outside India, cannot be classified as supply of OIDAR services for the purpose of levy of service tax in terms of Section 65 (105) (zh) of Finance Act, 1994.
Conclusion - i) The branch office in India is not the recipient of the OIDAR services provided by the CRS companies. The head office in Hong Kong was the recipient, and thus, the branch office is not liable to pay service tax under Section 66A. ii) The branch office and the head office are separate entities for the purposes of service tax liability under Section 66A.
The impugned order set aside - appeal allowed.
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2025 (4) TMI 247
Recovery of service tax - subcontractor engaged in civil works for government projects - service tax demand based solely on third-party data, specifically Form 26AS - invocation of extended period of limitation - scope of SCN - failure to pay appropriate stamp duty - exemption under N/N. 25/2012-ST - HELD THAT:- The issue is no more res-integra. This Tribunal has consistently held that merely based on 26AS statement, Service tax cannot be demanded. For service tax demanded to be upheld, there has to be evidence of provision of service, its nature of service etc. This requirement has not been satisfied by the Department.
This Tribunal has, in several decisions, held that such demands cannot be sustained, merely on the basis of Form 26AS. In the case of M/s Gopichenna vs. Commissioner of Central Tax, Medchal [2024 (3) TMI 11 - CESTAT HYDERABAD], this Tribunal observed 'Be it pre or post-Negative List regime, the Department is under obligation to prove that the Appellants have rendered such and such service and to such and such persons and that the consideration was received towards the rendering of such service. Without doing the same, demand merely on the basis of figures does not survive.'
Conclusion - Service tax demands cannot be based solely on Form 26AS without evidence of service provision.
The impugned order set aside - appeal allowed.
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2025 (4) TMI 246
Recovery of service tax with interest and penalty - governmental authority - exemption from payment of service tax under Sl.No.39 of Notification No.25/2012-ST - extended period of limitation - HELD THAT:- The claim of the appellant that they are a governmental authority and exempt from payment of service tax under Sl.No.39 of Notification No.25/2012-ST needs to be rejected for the reason that the issue involved is no longer res-integra in view of the decision of Hon’ble Supreme Court in the case of M/s KRISHI UPAJ MANDI SAMITI [2022 (2) TMI 1113 - SUPREME COURT], wherein it was held that 'it is to be noted that on and after 1-7-2012, such activities carried out by the Agricultural Produce Market Committees is placed in the Negative List. If the intention of the Revenue was to exempt such activities of the Market Committees from levy of service tax, in that case, there was no necessity for the Revenue subsequently to place such activity of the Market Committees in the Negative List. The fact that, on and after 1-7-2012, such activity by the Market Committees is put in the Negative List, it can safely be said that under the 2006 circular, the Market Committees were not exempted from payment of service tax on such activities.'
There are no merits in the submissions that the services provided by the appellant under the category of agricultural extension services. The term ‘agricultural extension services’ has been defined under Section 65B(4) of the Finance Act. It means ‘application of scientific research and knowledge to agricultural practices through farmer education or training’. Impugned order has concluded that appellant is not providing any such services which are so defined by way of application of scientific research and knowledge to agricultural practices through farmer education or training.
Invocation of extended period of limitation - penalty - HELD THAT:- Appellant have never disclosed the facts in relation to provisions of these services to the department, and had not reflected the same in ST-3 returns which was filed by the appellant. Further though they got themselves registered for payment of service tax under the category of “Renting of Immovable Property”, they deliberately never provided any information in respect of these services. They have in their returns deliberately suppressed the gross value of consideration received with intention to evade payment of service tax. In absence of provisions of any such information, the charge of suppression against the appellant is maintainable and as the same resulted in non-payment of the service tax due, the intend to evade payment of taxes was also there.
It is not even the case of the appellant that they were under a bonafide belief that these services were not due in respect of these amounts calculated and if such relief existed with on the basis of the same, as there are merits in invocation of extended period, the penalties imposed under Section 78 is justifiable, in view of the decision of Hon’ble Supreme Court in the case of Union of India v. Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT]. However the quantum of penalty shall be re-determined on the basis recomputed tax demand.
Conclusion - i) The appellant's services are taxable under the Finance Act, 1994, and not exempt as 'agricultural extension services' or as a government authority. ii) The extended period of limitation is applicable due to suppression of facts. iii) Penalties under Sections 77 and 78 were justified based on the appellant's conduct.
The Tribunal allowed the appeal in part, remanding the case to the original authority to recompute the tax demand after allowing the cum tax benefit, as the appellant had not collected service tax separately from their service recipients.
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2025 (4) TMI 245
Inclusion of compensation received by the appellant for "Lost-in-Hole" (LIH) items during drilling services in the value of taxable service for the purpose of calculation of service tax - invocation of extended period of limitation - HELD THAT:- In view of the decision of the Tribunal in Balaji Enterprises [2020 (3) TMI 17 - CESTAT NEW DELHI], the compensation amount cannot be included in the assessable value for the purpose of payment of service tax.
Thus, the amount received towards accidental damages due to unforeseen actions are not relatable to the provisions of services and would have to be excluded from the value of taxable services.
The provisions of the CBEC Education Guide explain the scope of the exclusion entry relating to accidental damages due to unforeseen actions not relatable to the provisions of service in the context of the 2006 Rules. It has been clarified that accidental damages are not to be included in the value of service provided the damages are due to unforeseen actions and are not related to the provisions of service. The example of an insurance company that has been referred to in the CBEC Education Guide is in connection with compensation paid to a client due to unforeseen action like an accident. It clarifies that the compensation paid by the insurance company to the client in such circumstances is not to be included in the value of taxable service, as it is not relatable to the provision of service but is only in the nature of consequence of provisions of insurance service - Likewise, compensation that is paid by the customers to the appellant for the LIH items will not be included in the value of taxable service as it is not relatable to the provision of service but is only in the nature of consequence of provisions of drilling service.
Whether the Additional Director General was justified in holding that the extended period of limitation was correctly invoked? - HELD THAT:- In Pushpam Pharmaceuticals Company [1995 (3) TMI 100 - SUPREME COURT], the Supreme Court examined whether the department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Central Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since “suppression of facts‟ has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty.
In Easland Combines, Coimbatore vs. Collector of Central Excise, Coimbatore [2003 (1) TMI 107 - SUPREME COURT] the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation.
Thus, the extended period of limitation could have been invoked only if there was suppression of facts with intent to evade payment of service tax.
In the present case, the records of the appellant for the period 2010 to 2014 were also audited by CERA. A finding has been recorded by the Additional Director General that the extended period of limitation could still be invoked because there was no documentary evidence to establish that the relevant documents were placed before CERA and further there was no evidence that these documents were also examined by CERA. This view of the Additional Director General cannot be accepted. When an audit is carried out it is for the officers to properly scrutinize all the records and it is not open to the department to take a plea that there could be a possibility that all the records were not produced or the documents were not examined by the audit.
The extended period of limitation under Section 73 of the Finance Act could not be invoked as there was no willful suppression or intent to evade tax.
Conclusion - i) The compensation received for LIH items is not part of the taxable value for service tax purposes as it is not consideration for any service provided. ii) The extended period of limitation under Section 73 of the Finance Act could not be invoked as there is no willful suppression or intent to evade tax.
The demand confirmed for the extended period cannot be sustained and would have to set aside. However, the demand confirmed for the entire period cannot be sustained as on merits also the demand could not have been confirmed - Appeal allowed.
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