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Service Tax - Case Laws
Showing 61 to 80 of 31533 Records
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2025 (6) TMI 1813
Classification of services - Management, Maintenance or Repair service (MMRS) or Business Auxiliary Services (BAS) - activity of re-rubberisation of rollers/spindles - HELD THAT:- It is found from the cited judgments that the activities being performed by the appellants cannot be covered within the category of MMRS - reliance can be placed in M/S. ZENITH (BANGALORE) ROLLERS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD-IV [2015 (12) TMI 818 - CESTAT HYDERABAD] where it was held that 'an identical activity of the appellant was classified by the Tribunal as falling under BAS, negating Revenue's contention that it should be classified as MMR service.'
Therefore, the demand in itself is not sustainable on this count as the demand has been made under the category of MMRS and not under any other service.
Appeal allowed.
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2025 (6) TMI 1812
Taxability - reverse charge mechanism - online information and database access or retrieval [OIDAR] services - services provided by Computer Reservation System [CRS] Companies to M/s. Air India Ltd. - what is that information or data which was contractually agreed to be provided by the CRS Companies? - HELD THAT:- What transpires from the agreement is that entire data base of the CRS Companies has been created by accessing information from the appellant and other various airlines. The appellant only intended to use the infrastructure set up by the CRS Companies to facilitate a better booking mechanism for travel agents. The CRS Companies were only obliged to ensure that the information of the appellant could reach the travel agents on real time basis. Thus, the transaction between the appellant and the CRS Companies cannot be treated as provision of OIDAR service by the CRS Companies to the appellant.
The appellant had not associated with the CRS Companies for receiving such data/information, for the purpose of the agreement was to promote and increase the number of bookings by providing seamless interface by the travel agents and the consideration is dependent on the number of bookings. Consideration is not payable for the provision of data. It also needs to be noted that data pertaining to other airlines is not provided to the appellant - the expression “providing data/information” in the context of OIDAR service would mean to supply such data/information which was previously not available to the service recipient. Thus, what is of paramount is the ownership of such data/information intended to be provided. It cannot, therefore, be urged that foreign CRS Companies provided any data/information to the appellant.
Conclusion - The services provided by CRS Companies to the appellant would not be taxable under the category of OIDAR services.
The papers may now be placed before the Division Bench of the Tribunal for deciding the appeal on merits.
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2025 (6) TMI 1811
Non-payment of service tax during the period January, 2013 to March, 2016 - Non-inclusion of value of free supply of diesel by M/s SCCL to VMICPL for rendering site formation services during the period April, 2014 to March, 2016 - Irregular Availment of Cenvat Credit - Irregular availment of Cenvat credit without producing relevant documents - Service Tax on transportation activity under RCM - levy of penalty.
Non-payment of service tax during the period January, 2013 to March, 2016 - mining of ore - negative listed service or not - HELD THAT:- In view of nature of contract, it was observed that the activity carried out was that of mining of iron ore and not manufacture thereof. Here the mining of ore is being treated as production of ore and the term ‘production’ is also covered within the purview of section 2(f) of the Central Excise Act apart from ‘manufacture’ and the same term has been used in the negative list and therefore, applying the ratio of Sesa Goa Ltd [2004 (11) TMI 14 - SUPREME COURT], the said activity would tantamount to production of ore. Therefore, on merit, no service tax can be levied on the amount received towards extraction of baryte ore. Since on merit itself there is no chargeability of service tax, it is not required to examine the issue on limitation for this demand.
Non-inclusion of value of free supply of diesel by M/s SCCL to VMICPL for rendering site formation services during the period April, 2014 to March, 2016 - HELD THAT:- It is very categorical assertion that a value which is not part of the contract between the service provider and service recipient will have no relevance in the determination of the value of taxable service provided by the service provider. In this case, it is apparent that department has not been able to specify that they have charged much more than the contract value entered between VMICPL and SCCL. It is noted that in this case it is obvious that they have discharged service tax on the gross value in terms of contract entered between VMICPL and SCCL and therefore, free supply of diesel cannot be considered as additional consideration for including the same in the gross value. Moreover, there is no evidence that they have collected any excess amount or any service tax in respect of said free supply.
The department’s appeal to the extent of non-inclusion of free supply of diesel is not correct and the grounds taken by VMICPL in their cross objections are sustainable and therefore, the impugned order to this extent is also sustainable.
Irregular Availment of Cenvat Credit - HELD THAT:- There were only limited grounds taken in the SCN for denying the credit and no other grounds were taken and therefore, when it is no longer res integra that the said inputs can also be allowed under various other categories, including as parts, components, etc., used for manufacturing/fabricating/repairing of capital goods or as inputs used for providing output services, the conclusion drawn by the adjudicating authority on the basis of limited grounds taken in SCN for denial of credit, is correct and therefore, there are no infirmity in the impugned order on this count.
Irregular availment of Cenvat credit without producing relevant documents - HELD THAT:- It is found that in any case the issue of availment of credit, etc., was also subject matter of earlier SCNs and therefore, the department was well aware that they were taking certain credits in respect of certain inputs, however, despite that they have not raised the demand within the normal period. Therefore, on both these counts, there is no merit in the grounds taken by the department to oppose the dropping of demand to the extent dropped by the adjudicating authority in respect of Cenvat credit taken on certain inputs as capital goods. Therefore, impugned order to this extent is also upheld and the appeal of Revenue is held as not tenable.
Insofar as the input or input service credit taken without appropriate documents, it is found that the adjudicating authority was already satisfied and has allowed only to the extent he was satisfied with the documents. The VMICPL has not been able to adduce any further tangible evidence that they were having sufficient documents to prove that they had taken credit only on the strength of eligible documents. Therefore, there are no merit in the objection of VMICPL as regards denial of credit, where the documents were not produced before the adjudicating authority. To that extent their appeal is not sustained on merit and appeal of Revenue is upheld.
Service Tax on transportation activity under RCM - HELD THAT:- It is not found that the grounds taken by the department are sustainable on the ground that extended period is rightly invokable. Since it is already discussed the issue of limitation based on prior knowledge of department, it is held that extended period cannot be invoked and we do not find any fault in the reasoning given by the adjudicating authority for dropping part of demand on the grounds of limitation while upholding the part of demand. It is also noted that VMICPL has not contested this issue on merit, however, they have only taken ground of revenue neutrality that had they paid this tax they would have been eligible to take credit and therefore, demand is not sustainable.
The demand upheld by the adjudicating authority is correct except to the extent of wrong application of rate of service tax prevailing during the relevant period which needs to be cross-checked and the confirmed demand can be reduced to that extent of mistaken calculation on account of wrong rate of service tax applied and thereafter, remaining amount shall be payable by VMICPL. Therefore, for this limited purpose, the matter remanded back to the adjudicating authority to re-determine the amount of service tax payable.
Levy of penalty - HELD THAT:- As the entire demand being set aside, being a small amount on the grounds of non-payment of service tax on transportation and ineligible credit and the fact that no sufficient evidence on record to hold Mr. Ch. Vijay Sekhar Reddy responsible for all the non-compliance, penalty under section 78A on him is also not justifiable and is therefore, liable to be set aside.
Conclusion - The appeal filed by the appellant is allowed except to the extent of computation of demand on denial of ineligible credit on input/input service due to non-production of eligible documents.
Appeal disposed off.
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2025 (6) TMI 1810
Levy of service tax - Club or Association Service - facilities provided by the appellant to its members like swimming pool, tennis court, shuttle court, facilities of rooms for accommodation, etc. - Applicability of doctrine of mutuality - HELD THAT:- It is found that upholding of doctrine of mutuality post 46th amendment to the Constitution of India, the Larger Bench of the Hon’ble Supreme court in the case of State of West Bengal Vs. Calcutta Club Limited [2019 (10) TMI 160 - SUPREME COURT (LB)] held that the doctrine of mutuality continues to be applicable to incorporated and unincorporated members’ clubs after the 46th Amendment adding Article 366(29A) to the Constitution of India.
Conclusion - The levy of service tax under the category of ‘Club or Association’ service cannot be sustainable.
The impugned order is set aside and the appeal is allowed.
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2025 (6) TMI 1809
Export of services - services of support service for business or commerce provided by the Appellant can be considered as 'taxable services' under section 65B(44) r/w section 65B(49) of the Finance Act, 1994 or not - Manpower recruitment or supply agency services.
Export of services - services of support service for business or commerce provided by the Appellant can be considered as 'taxable services' under section 65B(44) r/w section 65B(49) of the Finance Act, 1994 or not - HELD THAT:- The Adjudication authority admits that the representative of the Appellant, who appeared for the personal hearing had submitted the invoice copies to support that the amount is received in foreign currency. However, the Adjudication authority has given a finding that no evidence is provided regarding fulfillment of the condition of payment in convertible foreign exchange, such a finding is unsustainable. As per Rule 3 of the Place of Provision of Service Rule, 2012, the place of provision shall be the place of the recipient of service and as per the contract entered by the Appellant, the recipient of the service is M/s USM in Malaysia and not an employee of USM in Belagavi as alleged by the Respondent. Considering the above, the issue is squarely covered in favour of the assessee, the services are falling under the category of export of services and demand is unsustainable.
Manpower recruitment or supply agency services - HELD THAT:- Merely by providing a list of staff qualified for appointing as faculty in a center under the USM cannot be considered as manpower recruitment. There is no evidence regarding the consideration received by the Appellant for confirming demand of Rs.1,54,45,204/- under the 'manpower recruitment or supply agency' services. As regards renting of immovable property services, the Appellant were paying service tax for providing immovable property service to USM during the relevant period. Facts being so, there is no justification for confirming service tax demand of Rs.1,05,647/- under 'renting of immovable property' services as confirmed in the impugned order.
Conclusion - i) The services are falling under the category of export of services and demand is unsustainable. ii) There is no justification for confirming service tax demand of Rs.1,05,647/- under 'renting of immovable property' services as confirmed in the impugned order.
Appeal allowed.
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2025 (6) TMI 1808
Recovery of service tax - services rendered by the appellant to the foreign buyer - Export of service or not - HELD THAT:- This Tribunal in Kishore Kumar Company Pvt. Ltd.’s case [2018 (10) TMI 973 - CESTAT BANGALORE] in similar facts i.e. the appellant therein was acting as a purchase agent for overseas buyers of processed foods, looking after sourcing the seller, negotiating price on behalf of foreign buyer, checking the quality of the processed food and supervision of the packing and dispatch of the goods for which the appellant received a commission on the purchase. The overseas principal was taking decision to purchase and place order on the basis of the feedback furnished by the appellant who in turn place the purchase order on respective Indian exporters. The foreign principal opens a Letter of Credit in the name of the appellant and the appellant then transfer the Letter of Credit to the exporters with an instruction to the bank and the exporters that the amount of Letter of Credit includes the commission of the appellant. After the export, the exporter transfers the commission to the appellant in Indian rupee. In some cases, the foreign buyer remits the commission to appellants in freely convertible foreign exchange.
Conclusion - The service rendered by the appellant would fall under the scope of Export Service.
There are no merit in the impugned order - appeal allowed.
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2025 (6) TMI 1737
Levy of penalties - benefit of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - seperate/legal existence - application was treated to have been filed by HUF in view of the PAN number of the HUF being shown in the application whereas the penalty was imposed upon the individual - HELD THAT:- It is not in dispute that the petitioner has filed the Form-SVLDRS-1 regarding the penalty imposed in case of M/s. Shriram Tubes Private Limited and M/s. Shital Tubes Private Limited. The respondents authorities have accepted the Form-SVLDRS-1 in case of both the companies and other Directors. Even in case of M/s. Shital Tubes Private Limited, Form-SVLDRS-1 filed by the petitioner on 14/10/2019 is accepted without any demur and no objection was raised with regard to the surname or PAN shown by the petitioner in the form.
The object of SVLDRS is to reduce the litigation by resolution of the disputes so as to liquidate the legacy cases of the Central Excise and Service Tax which are subsumed in GST and which were pending in various forums.
Under Section 124(1)(b) of the scheme, tax dues are relatable to a show cause notice for pending litigation and the amount of duty or penalty as per the said notice is required to be paid as per the provision of the scheme and if only penalty is imposed under the Act then no amount is required to be paid by filing the form by stating the amount as Nil as the entire amount of either late fee or penalty or interest would be waived.
In the facts of the case, it is not in dispute that penalty was imposed upon the petitioner in respect of both the companies and therefore the petitioner was eligible to have the benefit of SVLDRS as the petitioner does not fall in any of the clauses being clause-A to clause-H of sub-section 125 which provides that all persons shall be eligible to make a declaration except falling under clause-A to clause-H. It is not even the case of the respondents that the petitioner is not eligible as per Section 125(1) of the scheme. The respondents therefore were not justified in rejecting the application on ground of change in surname of the petitioner to ‘Jain’ instead of ‘Shah’ or the PAN of HUF shown in the application which could have been corrected so as to grant benefit of the scheme to the petitioner.
The respondent could not have rejected the application Form-SVLDRS-1 filed by the petitioner on the technical grounds denying the benefit of the scheme. Moreover, the respondent could not have discarded the representation made by the petitioner by the impugned communication dated 25/07/2023 on the ground that this Court did not quash and set aside the order passed by the designated committee.
The approach of the respondent authority in not entertaining the representation made by the petitioner is deprecated and the respondents authorities are accordingly directed to pass appropriate order accepting the application Form-SVLDRS-1 filed by the petitioner changing the PAN shown by the petitioner to that of his individual PAN instead of the PAN of HUF and accepting the name of the petitioner as ‘ Jitendra C. Jain’ instead of ‘Jitendra C. Shah’ and issue Form-SVLDRS-4.
Conclusion - The petitioner is eligible for the benefits of SVLDRS, the rejection of the application on technical grounds is unjustified, and the respondents are directed to accept the corrected application and issue the requisite Form-SVLDRS-4 within twelve weeks.
Application disposed off.
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2025 (6) TMI 1736
Refund of service tax - rejection on the ground of time limitation - failure to follow judicial discipline - HELD THAT:- It is observed that the amount in question became refundable pursuant to Notification No. 6/2015 dated 14.5.2016 with reference to Section 102(3) of the Finance Act, 2016. The notification itself prescribes time limit of six months w.e.f. 14.05.2016. Admittedly, the refund claim is filed beyond said six months. Still has been sanctioned contrary to the mandate of said notification. The exemption notifications have to be read strictly as held by Hon’ble Supreme Court in the case of Sunrays Engineers Pvt. Ltd. Vs. CCE [2015 (4) TMI 122 - SUPREME COURT].
In the case of Zaigham Enterprises Vs. Commissioner of Cus., C. Ex. & ST, Noida [2019 (8) TMI 1567 - CESTAT ALLAHABAD] it was held that notification requiring filing of refund application within six months from date of Finance Bill, 2016 receiving assent of President. Court has no jurisdiction to enlarge limitation period provided under a notification which required to be strictly interpreted. Delay in filing refund application not condonable.
Conclusion - Irrespective the delay in filing the refund claim is a procedural lapse but there is no reasonable explanation for the occurrence of said delay. A litigant is required to be diligent. The Commissioner (Appeals) has failed to follow the judicial discipline.
The order under challenge is accordingly, set aside and both the appeals filed by department is allowed.
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2025 (6) TMI 1735
Time limitation - Condonation of delay in filing the appeal by the Commissioner (Appeal) - sufficient cause for delay or not - HELD THAT:- In the present case the appeal has been filed as observed by the Commissioner (Appeal) after more than expiry of period of 90 days after the receipt of the order of original authority - In terms of Section 85 (3A) of the Finance Act, 1994 it is observed that the appeal was to be filed before the Commissioner (Appeal) within two months of the date of the receipt of the order in original by the appellant. As per the proviso Commissioner (Appeal) has been granted the power to condone delay of one month in filing the appeal on sufficient cause being shown. In the present case appeal was filed before the Commissioner (Appeal) after more than a year from the date of receipt of order in original. Hence Commissioner (Appeal) has rightly held that appeal was filed beyond the prescribed period of limitation and has dismissed the same on this ground alone.
This issue is squarely covered by the decision of Hon’ble Supreme Court in the case of M/s Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT], wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him.
There are no merits in this appeal filed by the appellant - appeal dismissed.
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2025 (6) TMI 1734
Demand u/s 73A - Amount collected by the assesse in the nature of service tax or not - collection of 13% airport authority levy by the appellant from their clients - demand raised under Best Judgment method under section 73 of the Finance Act, 1994 - Levy of service tax when appellant has been discharging VAT on the AAI levy collected with respect to the transaction related to sale of food & beverages - Levy of penalty.
Inclusion of component of service tax or not - collection of 13% airport authority levy by the appellant from their clients - applicability of section 73A of FA, 1994 - HELD THAT:- Section 73A (w.e.f. 18.04.2006) provides that any person who has collected any amount in excess of Service Tax assessed or determined and paid on any taxable service from recipient of Service Tax in any manner as representing Service Tax, shall forthwith pay the amount so collected to the credit of the Central Government.The provisions of this section come to play only when any excess amount has been collected as service tax from the service recipient. If such amount of service tax is collected, which is in excess of service tax assessed or determined or paid on any taxable service, such amount is required to be deposited forthwith to the credit of the Central Government. In this context, it is noted that the word ‘Collection’ precedes ‘payment’. Thus, if no amount of service tax is collected, then section 73A is not applicable.
The Tribunal in Alstom Projects India Ltd. v. CC, CE & ST Coimbatore [2013 (6) TMI 202 - CESTAT CHENNAI] held that so far as section 73A is concerned, it applies only when a person collects any sum in name of service tax, which could not have been done by a person claiming all through that he is not liable to pay Service Tax.
A perusal of the sample invoice raised by the appellant on Singapore Airlines (invoice no. 001753 dated 30.09.2013) on sale of food and beverages reveals that the appellant has charged VAT at various applicable rates and AAI levy at 13% from the client. There are no collection of any amount representing as service tax in the said invoice.
Section 73A is categorical that the amount should have been collected as Service tax and not deposited. In the instant case, no such evidence has been brought forward by the Revenue to establish that the said amount representing service tax was collected by the appellant from the sale of Food and beverages - The charging section 73A categorically applies only when a person collects any sum in name of service tax, which is not the case in this appeal.
In the instant case, it has been demonstrated by the learned Counsel that no amount was collected by the appellant representing service tax in their sale invoices raised in respect of food and beverages. What has been collected is VAT and AAI levy. It is also on record that the appellant had duly deposited service tax collected on invoices raised in respect of provision of services. The department has not disputed this fact. The impugned order has held that “Apparently, no Service Tax has been collected by the Appellant separately on the AAI levy from their clients either in the invoice pertaining to supply of food or provision of services” - A perusal of the invoices reveal that VAT & AAI levy and service tax and AAI levy was collected on the invoices issued to their customers. However, it is not required to accept that service tax was not indicated separately in the invoices issued for provision of services.
Demand raised under Best Judgment method under section 73 of the Finance Act, 1994 - HELD THAT:- It has been held in the impugned order that the instant show cause notice has incorrectly been issued under section 73 - If the instant SCN is to be considered to have been issued under Section 73A, then the said demand cannot be upheld.
Levy of service tax when appellant has been discharging VAT on the AAI levy collected with respect to the transaction related to sale of food & beverages - HELD THAT:- The said demand has been raised on the transactions where VAT was paid by the appellant on sale of food and beverage. Consequently, on this ground as well the demand cannot be sustained.
Levy of penalty - HELD THAT:- Once demand cannot be sustained, the penalties are also not sustainable.
Conclusion - i) Section 73A is categorical that the amount should have been collected as Service tax and not deposited. In the instant case, no such evidence has been brought forward by the Revenue to establish that the said amount representing service tax was collected by the appellant from the sale of Food and beverages. ii) Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. iii) The appellant had not collected any amount representing service tax in their sale invoices raised in respect of food and beverages. iv) Once demand cannot be sustained, the penalties are also not sustainable.
The impugned order set aside - appeal allowed.
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2025 (6) TMI 1733
Levy of service tax - affiliation fees charged by the appellant from the educational institutions /colleges - HELD THAT:- The issue is no longer res integra and has been decided in favour of the appellant by the Tribunal in the case of M/s Jiwaji Vishwavidhyalaya versus Commissioner, CGST & CE, Bhopal [2025 (5) TMI 153 - CESTAT NEW DELHI]. The Tribunal has relied on the decision of the Karnataka High Court in Rajiv Gandhi University of Health Sciences, Karnataka [2022 (8) TMI 707 - KARNATAKA HIGH COURT] where it has been held that the act of University in granting affiliation to a private college has to be considered as a service in furtherance of providing education and the decision of the department to consider otherwise is erroneous.
The Commissioner (Appeals) after considering the provisions in the post negative era, analysed the nature of affiliation fees paid by the educational institutions to the appellant and also the nature of activity involved in the process of receiving affiliation fees, concluded that the same is not chargeable to service tax. There are no error in the findings arrived at by the Commissioner (Appeals), which are in conformity with the decisions of the superior forums.
There are no reason to interfere with the findings recorded by the Commissioner and therefore accept the same.
Conclusion - The affiliation fees collected by the university from affiliated colleges are not liable to service tax under the Finance Act, 1994.
The appeal filed by the Revenue accordingly stands dismissed.
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2025 (6) TMI 1732
Levy of service tax - Stock Broker Services - Delayed Payment Charges - HELD THAT:- The consistent view taken by the Tribunal is that the appellant had made payments to Stock Exchanges on behalf of their clients, who delayed the payments against their transactions of securities and the appellant charged the DPC from the said clients by making debit entries in their ledger, which cannot be termed as consideration for the service rendered. On the same analogy, it was held that it cannot be considered as service of tolerating or refraining from an act or to tolerate an act or situation, or to do an act and accordingly and the demand of service tax was therefore, set aside.
Conclusion - The service tax demand on delayed payment charges collected by the stock broker company from its clients set aside.
The impugned order is unsustainable - The demand of service tax on DPC is accordingly set aside - Appeal allowed.
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2025 (6) TMI 1731
Extended period of limitation - short payment of tax due to mismatch between its ST-3 and 26AS/ITR returns - liability to pay service tax - Name of the appellant appearing in Form 26AS - Failure to extend cum-tax benefit to the appellant.
Short payment of tax due to mismatch between its ST-3 and 26AS/ITR returns - HELD THAT:- The appellant did file the reply to show cause notice on 01.04.2021 but the same was not considered by the learned appellate authority. It is also found that Order-in-Original was passed ex-parte on the ground that the appellant did not file the reply to show cause notice and did not attend the personal hearing which is factually incorrect because the appellant did not get the personal hearing notice from the respondent.
Further, it is found that it is a settled law that demand cannot be raised solely on the basis of difference between ST-3 and 26AS/ITR. This issue is no more res integra and has been considered by various benches of Tribunal and this Bench in the case of Indian Machine Tools Manufacturers Association Vs. Commissioner of Central Excise, Panchakula [2023 (9) TMI 815 - CESTAT CHANDIGARH] and Shreejee RMC Private Limited Vs. Commissioner of CGST & C.E., Rohtak [2024 (5) TMI 671 - CESTAT CHANDIGARH] has examined this issue and it was held that 'Coming to third and final issue as to whether any demand can be sustained on the basis of difference between the figures of ST-3 Returns and the balance sheets, we find that it is a settled principle of law that service tax can be levied only when there is a clear Identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cannot be demanded and confirmed.'
Thus, it has been consistently held that demand cannot be raised on the basis of the difference between ST-3 and 26AS/ITR returns, hence, on this issue alone, the demand is set asie.
Liability to pay service tax - HELD THAT:- The appellant has rendered services to body corporate and vide Notification No. 30/2012-S.T. dated 20.06.2012 the taxable services provided by the GTA in respect of Transportation of goods by road where the person is liable to pay freight is body corporate established by or under any law, then the liability to pay service tax in such cases will be on the body corporate receiving GTA service by way of reverse charge mechanism and it is found that the most of the companies to whom the appellant has rendered the services are body corporates and therefore service tax cannot be demanded from the appellant. Further, it is found that the services rendered to other GTA are exempted from the payment of service tax as GTA are also exempted from payment of service tax as per the entry 22 of the Notification No. 25/2012-ST dated 20.06.2012 because both the conditions which are required to be satisfied are satisfied by the appellant.
Name of the appellant appearing in Form 26AS - HELD THAT:- In the present case during the relevant period the rates of tax has been changed and the computation of service tax made by the Department is incorrect. Further, it is found that the Department has wrongly applied best judgment method for computation of demand from April’17 to June’17. Once, the appellant has duly filed the ST-3 returns during the relevant period therefore the question of invoking the best judgment method is not warranted.
Failure to extend cum-tax benefit to the appellant - HELD THAT:- The Department has failed to extend cum-tax benefit to the appellant which the appellant was entitled in view of Section 67(2) of the Act.
Extended period of limitation - HELD THAT:- The show cause notice was issued on 24.12.2020 and the same was received by the appellant on 01.01.2021, it is also noted that the appellant was regularly filing the ST-3 returns and the Department was aware of the fact that the appellant is providing GTA service. The appellant was under a bonafide belief that they are not liable to pay the service tax on GTA service and therefore, suppression cannot be alleged by the Department on the part of the appellant in order to invoke the extended period of limitation.
Conclusion - i) The demand cannot be raised on the basis of the difference between ST-3 and 26AS/ITR returns. ii) The services rendered to other GTA are exempted from the payment of service tax as GTA are also exempted from payment of service tax as per the entry 22 of the Notification No. 25/2012-ST dated 20.06.2012 because both the conditions which are required to be satisfied are satisfied by the appellant. iii) Once, the appellant has duly filed the ST-3 returns during the relevant period therefore the question of invoking the best judgment method is not warranted. iv) The Department has failed to extend cum-tax benefit to the appellant which the appellant was entitled in view of Section 67(2) of the Act. v) The appellant was under a bonafide belief that they are not liable to pay the service tax on GTA service and therefore, suppression cannot be alleged by the Department on the part of the appellant in order to invoke the extended period of limitation.
The impugned order is not sustainable in law on merits as well as on limitation - Appeal allowed.
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2025 (6) TMI 1730
Time limitation - Condonation of delay in filing the appeal by the Commissioner (Appeal) - sufficient cause for delay or not - HELD THAT:- In the present case the appeal has been filed as observed by the Commissioner (Appeal) after more than expiry of period of 90 days after the receipt of the order of original authority - In terms of Section 85 (3A) of the Finance Act, 1994 it is observed that the appeal was to be filed before the Commissioner (Appeal) within two months of the date of the receipt of the order in original by the appellant. As per the proviso Commissioner (Appeal) has been granted the power to condone delay of one month in filing the appeal on sufficient cause being shown. In the present case appeal was filed before the Commissioner (Appeal) after more than a year from the date of receipt of order in original. Hence Commissioner (Appeal) has rightly held that appeal was filed beyond the prescribed period of limitation and has dismissed the same on this ground alone.
This issue is squarely covered by the decision of Hon’ble Supreme Court in the case of M/s Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT], wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him.
There are no merits in this appeal filed by the appellant - appeal dismissed.
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2025 (6) TMI 1729
Survival or abatement of appeal - approval of Resolution Plan - seeking disposal of Appeals after hearing the parties since substantial demands have been raised in the impugned orders - HELD THAT:- Now that the Resolution Plan stands accepted which is undisputed by both the parties, the present appeals would not survive as ruled by the Hon’ble Apex Court in Ghanashyam Mishra and Sons Pvt. Ltd. Vs Edelweiss Asset Reconstruction Company Ltd. & Ors. [2021 (4) TMI 613 - SUPREME COURT] which decision has been followed by various CESTAT Benches across India. Ld. Advocate Ms. Shwetha Vasudevan would place reliance on a latest decision of the Hon’ble High Court of Karnataka in the case of Patanjali Foods Ltd. Vs Commissioner of Customs, Mangalore [2024 (10) TMI 233 - KARNATAKA HIGH COURT] and would pray to hold the abatement of ‘demands’ and not ‘appeals’ as directed in the said order of the Hon’ble High Court of Karnataka.
Conclusion - Thus, once the Resolution Plan is approved by the Adjudicating Authority under Section 31 (1) of Insolvency and Bankruptcy Code, 2016 (IBC) then ‘no person will be entitled to initiate or continue any proceedings in respect to a claim which is not part of the resolution plan’. That means even the present proceedings cannot be continued as held in Ghanashyam Mishra and Sons Pvt. Ltd.
Appeal closed.
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2025 (6) TMI 1728
Levy of service tax - foreclosure charges on account of pre-mature termination of the loan agreement - seizure charges on availing loan towards purchase of the vehicles - the charges are forming part of the taxable services under the category of Banking and Financial Services or not - HELD THAT:- The facts that the appellants, as registered assessee under the Service Tax statute, have discharged the service tax liability in respect of the banking and other financial services provided by them to their customers, are not in dispute. Payment of service tax on the provision of taxable service has been mandated under Section 67 of the Finance Act, 1994, providing that on the amount charged for provision of “such service”, which is ultimately provided by the assessee to the recipient of service should be considered as the taxable value for payment of service tax thereon.
The issue, whether any other charges should also form part of the taxable value for the purpose of levy of service tax thereon, was the subject matter of the dispute before the Hon'ble Supreme Court in the case of M/s Bhayana Builders [2018 (2) TMI 1325 - SUPREME COURT], wherein the Hon'ble Supreme Court have observed 'The value of the goods/materials cannot be added for the purpose of aforesaid notification dated September 10, 2004, as amended by notification dated March 01, 2005.'
Further, the issue with regard to collection of various charges, over and above, the taxable value received for the provision of service was also considered by the Larger Bench of this Tribunal, in the case of Repco Home Finance [2020 (7) TMI 472 - CESTAT CHENNAI]. The issue involved in such case was, whether the foreclosure charges levied by Banks and Non-Banking Financial company on premature termination of the loan, could be subjected to levy of service tax under the Banking and other Financial Services? Such question was answered by the Larger Bench, holding that the foreclosure charges collected by the Banks and Non-Banking Financial company on premature termination of loan cannot form part of gross taxable value and not leviable to service tax under Section 65(105) of the Finance Act, 1994.
Furthermore, with regard to the charges collected for bouncing of cheque and penal interest, this Bench of the Tribunal in the case of the appellants themselves [2023 (8) TMI 473 - CESTAT MUMBAI], has held that such charges are not in context with provision of ‘such services’, for which the appellants are registered with the Service Tax Department. Though, this Bench of the Tribunal, in the case of the appellants, has dealt with the issue of ‘cheque bounce charges’ collected on bouncing of cheque, but the ratio is squarely applicable to the facts of the present case, inasmuch as the seizure charges has also been collected as a penalty from the customers for non-performance of the clause(s) provided under the agreement entered between both sides.
The learned adjudicating authority view that the appellants should be liable for payment of service tax on the ‘foreclosure charges’ and ‘seizure charges’ collected by them from the customers, not agreed upon.
Conclusion - i) Foreclosure charges collected on premature loan repayment do not form part of the taxable value for service tax. ii) Seizure charges collected for release of vehicles seized due to loan default are not taxable under the category of Banking and Financial Services.
The impugned order is set aside and the appeal is allowed.
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2025 (6) TMI 1727
Quantum of penalty - Commissioner (Appeals) failed to entertain Cross Objections as also in enhancing the penalty - levy of service tax on construction services.
HELD THAT:- It is no longer res-integra that there is no liability of service tax on construction services till 01.07.2010. It is also noted the fact that they have paid the entire duty and also paid 25% of the penalty, as applicable, after the passing of the Order-in-Original. In so far as the Commissioner (Appeals)’s observation that he being a creature of statute, he cannot extend any benefit beyond Statute, it is found that the same is correct and he could not have entertained “Cross Objections” filed by the appellant. However, there are catena of judgments which held that where the cross objections, per se, are not permissible, the said cross objections itself has to be taken as counter to the grounds taken by the Department.
Further, it is noted that, while the Commissioner (Appeals) has not considered that there is any provision for entertaining Cross Objections, however, he has taken into consideration, the grounds raised in their letter dated 31.08.2012 which not only included the grounds for Cross Objections but also other arguments as regards non-imposition of penalty. It is also an admitted fact that no specific show cause notice, as such, was issued to the respondent before enhancing the penalty as against the Order-in-Original.
Conclusion - It is found that, as far as the decision of not treating the application dated 31.08.2012 as regards Cross Objections, in view of the Statutory Provisions are concerned, there are no infirmity with the decision of the Commissioner (Appeals). However, it is found that in the given factual matrix, the respondent was not able to effectively present their case, especially when the proposal was for enhancing the penalty.
In the facts of the case, especially when on merit itself there was no need even for them to pay any duty and the fact that they have also paid all the imposed duties along with the interest, it is held, in the interest of justice, the matter needs to be remanded back to the Commissioner (Appeals), who shall now issue a notice to the respondent indicating the reasons as to why the penalty should be increased under Section 78 - appeal allowed by way of remand.
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2025 (6) TMI 1726
Time limitation - Liability of appellant to pay service tax - Man Power Supply Service - levy of service tax on the reimbursable expenses received by the appellant - extension of benefit under Section 80 for waiver of penalty imposed under Section 77 or 78 of FA - HELD THAT:- While considering the grounds for extending applicability of Section 80, Commissioner (Appeals) has made certain observations which show that the appellants had reasonable belief and that there was no intention to evade payment of service tax and that there was no deliberate cause for non-payment of service tax.
It is also a fact that the Department had come in appeal against the said order of the Commissioner (Appeals), however, on the grounds of monetary limits they had withdrawn their appeal. Therefore, this observation of the Commissioner (Appeals) stands today as far as the factual matrix is concerned. Therefore, in the given factual matrix, as observed by the Commissioner (Appeals) at para 18, it is found that there is no sufficient ground for invoking extended period. The major part of demand has already been covered by the period of limitation and the remaining part, the appellants are not objecting the demand of service tax within the normal period. It is also made clear that the issue on merit not decided.
It is, however, made clear that whatever amount of the service tax had already been paid along with interest by the appellant, they will not be claiming any refund thereof, as they have not pressed for the same. However, demand to the extent of normal period is upheld.
Conclusion - The extended period of limitation could not be invoked in this case. Demand to the extent of normal period is upheld. Penalties also set aside.
Appeal allowed partly.
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2025 (6) TMI 1725
Classification of service - Goods Transportation Agency Service or Cargo Handling Services? - appellant were procuring Corrugated Boxes (which were in the nature of Packing material) from the premises of Kunal Enterprises and delivering to M/s. Aquagel Chemicals P. Ltd. - failure to make critical examination - HELD THAT:- Cargo Handling Services and Goods Transportation Agency Services by road are sperate services and rather, support the case of the appellants. It is to be remembered that even the Board’s TRU Circular No. 334/1/2008 dated 29.02.2008 indicates that a composite service which includes packing, unpacking, loading and unloading, etc. apart from transportation is in the nature of ‘Cargo Handling Services’ and with the prominent nature of the services being ‘goods transport’ then the same gets excluded from the scope of the ‘Cargo Handling Services’.
It is found that even the adjudicating authority has only given finding with activities carried out by the appellant as not the mere transportation of goods but involving series of activities of loading and unloading apart from transportation of the goods. Even the Board circular emphasizes on the point that there should be of packing goods involved, inter alia, with other services to make it a composite service of cargo handling.
Even such conclusion is bereft of the finding on whether there was a packing of goods done by the appellant or not to bring it under ‘Cargo Handling Services’. This aspect needs critical examination and definitive finding that they were doing packing of goods on behalf of the clients also, as is the requirement for cargo handling service given by the Board Circular. Such finding not being clear, it is inclined to remit the matter back to the adjudicating authority to verify these aspects whether any packing on behalf of the clients was being done as will normally be done by cargo handlers like movers and packers.
Conclusion - Matter remanded for fresh adjudication, thereby setting aside the impugned order to the extent it classified the appellant's services as 'Cargo Handling Service' without proper examination of the packing activity and its tax implications.
Appeal allowed by way of remand.
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2025 (6) TMI 1670
Levy of service tax - Construction of Residential Complex Service - Management, Maintenance or Repair Service - reimbursable expenses received as ‘After Sales’ payment.
HELD THAT:- The issue regarding ‘Construction of Residential Complex Service’ is no longer res integra as this issue stands settle vide Board Circulars dated 29.01.2009 and 10.02.2012 as well as by various decisions relied upon by the appellant. In one such case, in the case of Krishna Homes Vs. CCE, Bhopal [2014 (3) TMI 694 - CESTAT AHMEDABAD], this Tribunal held as 'Such works contracts involving transfer of immovable property were brought within the purview of taxable service by adding explanation to Section 65(105)(zzzh) w.e.f. 1-7-2010, and therefore, it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 1-7-2010.'
The demand on ‘Construction of Residential Complex Service’ prior to introduction of the Explanation and the period of dispute, in the present case, being prior to 01.07.2010, the demand of service tax cannot be sustained. On the same grounds, the demand under ‘Management, Maintenance or Repair Service’ also cannot be sustained.
Appeal allowed.
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