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Service Tax - Case Laws
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2025 (6) TMI 1599
Power to condone delay - Jurisdiction of Commissioner (Appeals) to condone the delay in filing the appeal beyond the prescribed statutory period under Section 85(3A) of the Finance Act, 1994 - 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.
Conclusion - The appeal filed beyond the prescribed limitation period and condonation window rightly dismissed by the Commissioner (Appeals).
There are no merits in this appeal filed by the appellant - appeal dismissed.
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2025 (6) TMI 1598
Taxability - reverse charge mechanism - commission paid by Indian companies to foreign agents for services rendered entirely outside India - contention of the Revenue is that the said services rendered by the overseas agents are received and utilized in India whereas, the contention of the appellant is that the services are rendered and received abroad - Revenue neutrality - time limitation - penalty - HELD THAT:- It is found that both the authorities below, while passing the Orders-in-Original and Orders-in-Appeal, have recorded clear findings that the services have been rendered and received at the same time and entirely outside India. The said findings have not been questioned by the Revenue by filing any appeal against the orders of both the authorities.
It is found that once there are clear cut findings of fact that the services have been rendered entirely outside India, the same cannot be taxed in India by invoking the Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, because the said rule in its opening portion contemplates receiving of services in India, which is clearly absent in the present case.
On going through the provisions of Section 66A, Rule 2(1)(d)(iv) and Section 68(2), it is found that the Reverse Charge Mechanism was introduced w.e.f. 18.04.2006 but in the present case, the said provision is not applicable because it is a clear cut finding that the impugned services have been performed/rendered entirely outside India and the same cannot be taxed in India under the provisions of Reverse Charge Mechanism. It that even is also found that the deeming provisions as contemplated under Rule 3(ii) not applicable in the present case in view of the clear cut findings that services were received entirely outside India.
Hon’ble Delhi High Court in the case of Orient Crafts Ltd [2006 (9) TMI 2 - DELHI HIGH COURT], has clearly held that no service tax at all can be levied on services rendered and received outside India. By following the ratio of the said decision and also considering the CBEC’s Circular dated 19.04.2006, the appellant is not liable to service tax under reverse charge basis; therefore, to this extent, we set aside the demand.
Revenue neutrality - HELD THAT:- It is found that in the appellant’s own case, revenue neutrality is applicable qua the same assessee on account of reverse charge basis and not towards any other party. It is also found that demand of service tax being on reverse charge basis is without dispute fully CENVATABLE in view of Rule 3(1)(ixa) of CENVAT Credit Rules, 2004 inserted on 08.04.2011 with retrospective effect from 18.04.2006 which clearly provides that the service tax leviable under Section 66A of the Finance Act, is CENVATABLE.
Time Limitation - penalty - HELD THAT:- Once the service tax leviable under Section 66A, is CENVATABLE, then the question of intent to evade the tax does not arise and extended period of limitation cannot be invoked as held by the Hon’ble Supreme Court in the case of Nirlon Limited vs. Commr of CE, Mumbai [2015 (5) TMI 101 - SUPREME COURT] - it cannot be said that the department was not having any knowledge rather the department had complete knowledge as early as September 2006 and therefore, the question of suppression in the facts and circumstances of the present case, does not arise.
Further, in the case of Nizam Sugar Factory [2006 (4) TMI 127 - SUPREME COURT], the Hon’ble Apex Court has clearly held that extended period of limitation cannot be invoked for the subsequent show cause notice.
The demand for extended period as well as penalty set aside.
Conclusion - i) The service tax demand on commission paid to foreign agents for services rendered and received outside India is set aside as unsustainable on merits. ii) The demand and penalties raised beyond the limitation period are set aside. iii) The Reverse Charge Mechanism provisions do not apply to services not received in India. iv) The CENVAT credit is available on service tax paid under Section 66A, ensuring revenue neutrality.
The impugned orders are not sustainable on merits as well as on limitation - Appeal allowed.
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2025 (6) TMI 1597
Rejection of Swachh Bharat Cess (SBC) rebate - export of services or not - applicability of N/N. 39/2012-ST - issue of limitation stated as unexamined - classification of services as 'intermediary,' required examination or not - Credit eligibility required further verification or not.
Applicability of N/N. 39/2012-ST - HELD THAT:- The learned Commissioner (Appeals) has remanded the matter without considering the fact that the Order-in- Original had already established compliance with the conditions under Notification No. 39/2012-ST, including export of services, payment of duty/tax, and non-availment of CENVAT Credit. It is also found that the original authority had examined this issue on the basis of documentary evidence but despite that, the learned Commissioner (Appeals) ignored the findings of the original authority and still remanded the matter without justification.
The Tribunal in the appellant’s own case TECNOVATE ESOLUTIONS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI [2018 (8) TMI 695 - CESTAT NEW DELHI], has conclusively held that the appellant exports Business Support Services and Business Auxiliary Services as a BPO.
Entitlement of the appellant to the rebate of SBC - HELD THAT:- This issue is already settled by the Hon’ble Delhi High Court in the case of ExxonMobil Services and Technology Pvt Ltd vs. Union of India [2024 (12) TMI 941 - DELHI HIGH COURT], wherein it has been categorically held that Swachh Bharat Cess is not a part of Cenvat Credit under the Cenvat Credit Rules. Further, the original authority had itself noted that no Cenvat Credit was availed on inputs and input services on which the rebate was claimed, specifically in respect of the Swachh Bharat Cess component. Therefore, the denial of rebate on SBC is not sustainable in law.
Compliance with condition 2(e) of the Notification No. 39/2012-ST dated 20.06.2012 - HELD THAT:- The appellant has not claimed any rebate on SBC component of Cenvat, and the condition stands satisfied.
Denial of rebate on the ground of nexus - HELD THAT:- The input services involved in the present case, have been used in exporting the services under Rule 6A(2) of the Service Tax Rules, 1994 and in various decisions, it has been consistently held that if the Cenvat Credit has not been questioned at the time of availing, then it cannot be questioned at the time of refund.
Time limitation - HELD THAT:- For the period February 2016 to March 2016, the rebate was filed on 02.02.2017, which is well within the limitation period as held in the case of CCE vs. Span Infotech India Pvt Ltd [2018 (2) TMI 946 - CESTAT BANGALORE - LB], wherein it has been clarified that for export of services, the relevant date is the end of the quarter in which FIRC is received.
Intermediary services - HELD THAT:- The Tribunal in the appellant’s own case for the earlier period in TECNOVATE ESOLUTIONS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI [2018 (8) TMI 695 - CESTAT NEW DELHI], which was decided in appellant’s favour, has held that the appellant had provided export of service. Moreover, the original authority clearly held that the appellant’s services fall under the category of Business Auxiliary Services and Business Support Services and do not fall under the category of ‘intermediary services’.
Conclusion - i) Swachh Bharat Cess is not a part of Cenvat Credit under the Cenvat Credit Rules. ii) If the Cenvat Credit has not been questioned at the time of availing, then it cannot be questioned at the time of refund. iii) For export of services, the relevant date for limitation is the end of the quarter in which FIRC is received. iv) The appellant's services fall under the category of Business Auxiliary Services and Business Support Services and do not fall under the category of 'intermediary services'.
The impugned order, remanding the matter to the original authority, is not sustainable in law - Appeal allowed.
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2025 (6) TMI 1596
Failure to pay Service Tax on the services provided under the category of Commercial or Industrial Construction Services - demand of service tax under the category of commercial or industrial construction services against the appellant who had rendered services characterized as works contracts - recovery alongwith interest and penalty - invocation of extended period of limitation - HELD THAT:- In this case, the appellant could not deposit the service tax on account of his severe accident but later on, he deposited the same along with interest before the issuance of show cause notice. Further, it is found that the contract entered into by the appellant with the Power Grid Corporation and other parties are works contract in nature whereas the Department has sought to tax them under commercial or industrial construction/ construction of residential complex.
Learned Counsel has placed on record documents which clearly shows that the contract involves in the present case are works contract which cannot be taxed prior to 01.07.2007 as the concept of works contract was introduced w.e.f. 01.07.2007 in the Finance Act, 1994.
It is also a settled law that the activity of works contract cannot be taxed under the category of commercial or industrial construction/ construction of residential complex even after 01.07.2007 as the services under the works contract service is totally different from that of commercial or industrial construction.
The identical issue was considered by this Bench in M/S SAB INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, CHANDIGARH-I [2023 (7) TMI 483 - CESTAT CHANDIGARH] wherein the demand raised by the Department under the category of commercial or industrial construction service was set aside without considering other grounds raised by the appellant. The ratio of said decision is squarely applicable in the present case.
Conclusion - The demand under commercial or industrial construction services is unsustainable, extended limitation is improperly invoked, penalties are unjustified.
The impugned order set aside - appeal allowed.
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2025 (6) TMI 1595
Non-payment of service tax - failure to provide relevant documents - assessment done on the basis of 'best judgement assessment' - suppression of facts or not - extended period of limitation - penalty - HELD THAT:- In this case, the demand of Service Tax has been raised against the appellant on the basis of Form 26AS received from the Income Tax Department, as per which it is alleged that the appellant has provided services, but not paid any Service Tax for the said services. The period involved in this case is from April, 2016 to June, 2017 and the Show Cause Notice has been issued on 22nd October, 2021. There is no basis in the Show Cause Notice for the allegation with regard to suppression of facts from the Department. In fact, the source from where the Revenue got the information, was available with them since 2016-17 itself. Thus, it cannot be alleged that the appellant had suppressed the facts of providing the said services and not paying Service Tax. Therefore, the extended period of limitation is not invokable against the appellant.
The impugned demand has been raised on the basis of Form 26AS provided by the Income Tax Department. In this regard, without conducting investigation, no demand can be raised against an appellant.
The appellant was engaged in the activity of providing transportation service, as a goods transport agency, for which the service recipient was required to pay Service Tax under reverse charge mechanism, which has already been paid by the service recipient viz. M/s. Tata Motors Ltd., in this case - no demand is sustainable against the appellant. Consequently, no penalty is imposable on the appellant.
The impugned order is set aside - appeal allowed.
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2025 (6) TMI 1594
Validity of Refund Claim prior to the approval of the Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC) - Appellant claim that though the demand raised got abated on approved the Resolution Plan but refund claim survives - HELD THAT:- The Hon’ble Apex Court in Ghanashyam Mishra and Sons Pvt. Ltd. [2021 (4) TMI 613 - SUPREME COURT] has covered the situation where an appeal of identical nature is sought to be pursued since, as contended by the Ld. Special Counsel, paragraph (i) of the conclusion specifically refers to ‘any person’. This apart, once the Resolution Plan is approved in terms of Section 31(1) of IBC, the original identity of the Corporate Debtor ceases to exist. Moreover, while upholding the objectives of IBC, the Hon’ble Apex Court in Ghanashyam Mishra and in Swiss Ribbons Private Limited [2019 (1) TMI 1508 - SUPREME COURT] has categorically held that the liabilities of a Corporate Debtor should not discourage a bonafide successor. No doubt, the maximization of value of assets is viewed as only to benefit such successor but however, once the original identity is lost along with statutory liabilities, such Corporate Debtor cannot choose to stake a claim just because it had litigated its claim regarding refund, the allowability or otherwise of such claim is a different matter altogether.
Conclusion - The status of Corporate Debtor does not alter depending on whether an appeal pertains to a demand or refund; any litigation cannot be initiated and if initiated, cannot continue as categorically held by the Hon’ble Apex Court in Ghanashyam Mishra.
There are no merit in the Appellant-Assessee’s contention and therefore the same is not entertainable - appeal closed.
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2025 (6) TMI 1593
Abatement of appeal or continuation of proceedings - Resolution Plan approved - ppellant argued that the appeal should be treated as "abated" since the NCLT had approved the Resolution Plan and appointed a Resolution Professional - HELD THAT:- The order of NCLT perused, now that the Resolution Plan stands accepted which is undisputed by both the parties, the present appeal 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.
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.
The appeal stands closed/disposed of accordingly.
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2025 (6) TMI 1592
Nature of activity - service or manufacture - fabrication work done by the appellants - HELD THAT:- At the relevant time, the goods being fabricated by the appellants were bringing into existence what would have been normally “excisable goods” being manufactured articles liable to Central excise duty, but for the exemption as contained in 12/2012-CX which made them “exempt goods”.
The issue is answered in affirmative holding that what is excisable at the relevant time could not have been subjected to service tax, if that be so, the appeals are allowable - appeal allowed.
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2025 (6) TMI 1591
Exemption from service tax - contracts awarded under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) for rural electrification, involving supply of materials and erection, testing, commissioning and civil construction services - applicability of N/N. 25/2012-S.T. dated 20.06.2012 (Entry No. 12A) - HELD THAT:- In this case, it is an undisputed fact that the assessees had been awarded the works under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) by the Energy and Power Department of the Government of Sikkim. These contracts have been awarded to the assessees/appellants for rural electrification in the State of Sikkim under the scheme of the Central Government. The activity of rural electrification is not liable to be taxed in terms of N/N. 25/2012-S.T. dated 20.06.2012 (Entry No. 12A), wherein services provided to government/local authority/governmental authority by way of construction, erection or commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of civil structures or any other original works meant predominantly for use other than in commerce, industry or any other business or profession are exempted.
Admittedly, the services provided by the said assessees/contractors were meant for use other than in 'commerce, industry or any other business or profession', to the State Government, under the Central Government scheme of Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).
The issue is no longer res integra as an identical issue has already been examined by this Tribunal in the case of Shankar Agarwal v. Commissioner of C.Ex., Cus. & S.T., Siliguri [2025 (4) TMI 1654 - CESTAT KOLKATA] wherein the same view has been expressed by this Tribunal, holding that such services provided by an assessee under the RGGVY scheme for rural electrification are exempt from levy of Service Tax in terms of Notification No. 25/2012-S.T. dated 20.06.2012 (Entry No. 12A).
Thus, no Service Tax is payable by the assessees for the said services.
Conclusion - No Service Tax is payable on contracts solely for supply of materials and equipment. Contracts involving erection, testing, commissioning and civil construction services under the RGGVY scheme are exempt from Service Tax.
There are no merit in the appeals filed by the Revenue and hence, the same are dismissed.
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2025 (6) TMI 1590
Classification of services - services provided by appellant to State Bank of India (SBI) for construction of ATM sites - classifiable under Construction Services/Commercial or Industrial Construction Services or not - levy of service tax prior to 01.06.2007 - HELD THAT:- The present issue is for the period from October 2004 to May 2007. The Tribunal had categorically held that the service rendered by the appellant falls under ‘Automatic Teller Machine Services’ which came into effect only from 01.05.2006. However, the Revenue proceeded to demand service tax deeming the services to be ‘construction service’ and this issue is no longer res integra in as much as the Supreme Court in the case of CCE & Cus., Kerala vs. L & T Ltd. [2015 (8) TMI 749 - SUPREME COURT] has categorically held that all works contract services prior to 01.06.2007 are not liable to service tax.
Conclusion - Since this Tribunal has clearly held that the services rendered by the appellant falls under the category of ‘Automated Teller Machines’ which came into effect only from 01.05.2006 onwards, the question of liability to service tax on ‘construction services’ cannot be sustained as the services are in the nature of works contract services, which came into existence from 01.06.2007.
The demand set aside - appeal allowed.
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2025 (6) TMI 1589
Rate of service tax - advances received during the disputed period from April 2006 to September 2006 - taxable at the rate of 10.2% or 12.24%? - Denial of cenvat credit on various input services utilized by the appellant.
Rate of service tax - advances received during the disputed period from April 2006 to September 2006 - taxable at the rate of 10.2% or 12.24%? - HELD THAT:- As per Rule 4A of the Service Tax Rules, 1994, the liability arises on the date of invoice or date of payments whichever is earlier and in the instance case, the rate of tax on the date of receipt of advances prior to 18.04.2006 was @10.2% and the appellant had rightly discharged his liability and therefore, the impugned order to this extent needs to be set aside.
Denial of cenvat credit on various input services utilized by the appellant - HELD THAT:- With regard to eligibility of utilisation of cenvat credit as rightly pointed out by the appellant, the denial of cenvat credit utilisation cannot be sustained inasmuch as the eligibility has not been questioned, hence, the order confirming the same is devoid of merit.
Conclusion - The appellant had correctly paid service tax at 10.2% on advances received prior to 18.04.2006 and at 12.24% thereafter, and is entitled to cenvat credit on eligible input services.
The impugned order is set aside and the appeal is allowed.
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2025 (6) TMI 1588
Recovery of service tax - ‘Management, maintenance or repair’ service as per Section 65 (105)(zzg) of the Finance Act, 1994 - applicability of abatement as per N/N. 12/2003-ST dated 20.06.2003 - HELD THAT:- It is an admitted fact that the contract was made for maintenance of crematorium and adjudication authority rightly classified the service as falling under category of 'Management, maintenance or repair service. However there is no reason or justification to deny the benefit of cum tax and by allowing the same, appellant is eligible for the benefit of Notification No. 6/2005-ST dated 01.03.2005 for the period September 2005 to March 2006.
Hence, the appeal is partially allowed directing the lower authority to extend the benefit of cum-duty and the benefit of Notification No. 6/2005-ST dated 01.03.2005 for the period September 2005 to March 2006.
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2025 (6) TMI 1587
Levy of service tax - Banking Cash Transaction Tax - export of service or not - Short payment of service tax under ‘Business Auxiliary Service’, on reimbursements of 'banking cash transaction tax' - demand under 'Business Auxiliary Service' - availment of ineligible cenvat credit or not - invoction of extended period of limitation - Levy of penalty.
Levy of service tax - Banking Cash Transaction Tax - export of service or not - HELD THAT:- The issue is no more res-integra and issue is settled by the Tribunal in the matter of Muthoot Fincorp Ltd. Vs. Commr. of C.Ex. Visakhapatnam, [2009 (8) TMI 236 - CESTAT, BANGALORE], where it is held that 'The said Western Union charges fee from the person who is situated outside India and pays WFL some amount as commission and WFL pay current appellant a part of the amount as compensation. In the whole transaction it can be seen that the services rendered by the appellant of money transfer is directly to Western Union. If that be so, it can be said that the appellant is providing the services to Western Union whose beneficiaries are outside India.'
While considering the above issue, Tribunal has also considered the Circular issued by the Board dated 24.02.2009 regarding applicability of provisions of the Export of Service Rules, 2005 and held that services rendered by the appellant cannot be taxed under the category of 'business auxiliary services'.
Considering the evidence produced by the appellant as part of the appeal memorandum and reply to Show Cause Notice, the amount received by the appellant directly from client abroad, and benefit of services accruing to person outside India. Hence, service tax was not payable under ‘Business Auxiliary Service’.
Short payment of service tax under the category of 'Business Auxiliary Service' on reimbursements of the Banking Cash Transaction Tax (BCTT) - HELD THAT:- Considering the details furnished by the appellants, and also as per Sub-rule (4A) of Rule 6 of Rule 4(2) Service Tax Rules, 1994 the excess amount paid to the Central Government towards service tax for a month or quarter was allowed to be adjusted as service tax against the service tax liability of subsequent month or quarter. Thus, there is no omission on the part of appellant to allege short payment of Rs. 7,80,642/-.
Ineligible Cenvat credit of Rs. 3,26,997/- - HELD THAT:- The cenvat credit claimed by the appellant does not fall under the exclusion category as per the definition of input service and appellant is eligible for the same.
Invocation of extended period of limitation and imposition of penalty - HELD THAT:- There is no suppression of facts to invoke the extended period of limitation, since the issue is on interpretation of an issue and not suppression of facts. It is well settled that where there is a dispute prevailing in the matter of classification of products, the appellant cannot be held guilty of suppression or misstatement and hence charge of suppression is not sustainable and extended period cannot be invoked. Similarly in the matter of Jayaprakash Industries Ltd. Vs. Commissioner of Central Excise, Chandigarh [2002 (11) TMI 92 - SUPREME COURT], the Apex Court held that when there is a bona fide doubt about the tax liability on the goods due to diverging views of the courts, extended period of limitation is not invocable.
Conclusion - i) The demand of service tax on reimbursement of BCTT under BAS is set aside as the service constituted export of service and reimbursements were not taxable. ii) The demand under 'Business Auxiliary Service' and 'Banking and Other Financial Services' on mutual fund-related receipts rejected as the appellant was not a mutual fund distributor or agent. iii) The appellant is entitled to the Cenvat credit claimed on office equipment and related inputs; the demand for recovery is unsustainable. iv) The extended period of limitation and penalties imposed are not justified and are set aside.
The impugned order is set aside and the appeal is allowed.
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2025 (6) TMI 1586
Reversal of the proportionate cenvat credit attributable to exempted goods by the appellant - lapse on the part of the appellant in availing the Cenvat credit and it is reversed only after issue of Show Cause Notice - Rule 6(3A) of Cenvat Credit Rules, 2004 - HELD THAT:- It is an admitted fact that the appellant had committed an omission by availing the CENVAT credit on exempted goods and when they came to know about such omission, they have reversed the credit wrongly availed against the exempted goods along with interest, once the department accepted the same, there is no reason or justification to invoke the penal provisions and to proceed to confirm the demand.
Further, Hon'ble High Court of Karnataka in the case of CCE Vs. ETA Technology Pvt., Ltd. [2010 (6) TMI 757 - KARNATAKA HIGH COURT] has taken note of the amendment and held that the reversal of credit availed would be sufficient and there is no need to pay 8% of the value of exempted goods. Further, in the matter of Tata Technologies limited [2016 (1) TMI 972 - CESTAT MUMBAI] it was held that once the assessee have filed the declaration, though belatedly, due to minor procedural lapses, substantial benefit cannot be denied. The intention of the legislation is that the assessee should not get undue benefit in the form of CENVAT Credit, which is attributable to input services used in providing exempted output service. It is further observed that there is no dispute with regard to the CENVAT Credit reworked by the assessee which is attributable to the exempted goods.
Further, there is merit in the contention of the assessee that Rule 6 cannot be used as tool to extract the amount, which is much beyond the remedial measure and what cannot be collected directly, cannot be collected indirectly, as well.
Following the decision of Hon'ble Karnataka High Court in the case CCE Vs. ETA Technology Pvt., Ltd., considering substantive compliance made by the appellant i.e. payment of attributable CENVAT Credit on exempted goods along with interest, the substantial benefit cannot be denied.
Appeal allowed.
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2025 (6) TMI 1585
Liability of 'trust' incorporated by deed of Trust in terms of India Trust Act, 1882 for payment of service tax - Club or Association service - applicability of doctrine of mutuality even in respect of 'Trust' incorporated by Deed of Trust - invocation of extended period of limitation - Penalty.
Extended period of limitation - HELD THAT:- It is an admitted fact that Appellant had paid service tax for the period from 01.05.2006 after insertion of explanation; "for the purposes of this section, taxable service includes any taxable service provided or to be provided or any unincorporated associations or body of persons to a member thereof, for cash, deferred payment or any other valuable consideration" below Section 65 of the Act, though they are claiming that it was under mistake of law. As regards invoking the extended period of limitation the appellant submitted that they were under bonafide believe that prior to insertion of explanation to Section 65, no service tax was payable. Further, there is no allegation that Appellant had willfully suppressed the facts for evasion of tax - in the absence of any such willful intention for evasion of tax and considering the nature of the dispute the demand of service tax by invoking the extended period is unsustainable.
Liability to pay service tax - Club or Association service - doctrine of mutuality - HELD THAT:- Hon’ble Supreme Court in the matter of State of West Bengal Vs. Calcutta Club Ltd. [2019 (10) TMI 160 - SUPREME COURT], categorically held that 'It is, thus, clear that companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of the respondents that incorporated clubs or associations or prior to 1st July 2012 were not included in the Service Tax net'.
The dispute in the present appeal is for the period from 16.06.2005 to 30.04.2006. In view of the above discussion and considering the ratio of the judgment of the Hon'ble Apex Court in State of West Bengal Vs. Calcutta Club Ltd., the appellant is not liable to pay service tax for the period from 16.06.2005 to 30.04.2006 under the category 'Club or Association' service.
Conclusion - The Court held that the appellant trust is not liable for service tax under the 'club or association' category for the disputed period, the extended limitation period cannot be invoked, and penalties imposed are unsustainable.
Appeal allowed.
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2025 (6) TMI 1584
Entitlement for service tax exemption as per N/N. 08/2005-ST dated 01.03.2005 as amended by N/N.19/2005-ST dated 16.06.2005 in respect of the job work activities - Business Auxiliary services - extended period of limitation - HELD THAT:- As regards invoking of the extended period of limitation, there is no finding given by the Adjudication authority regarding invoking of the extended period of limitation, hence no view expressed regarding the demand invoking the extended period of limitation.
On merit, on going through the findings given by the Adjudication authority, where it is held that prior to 16.06.2005, the assessee was in production of goods for the client and not on behalf of the clients as per the definition of ‘Business Auxiliary Service’ as it existed the said activity was not a taxable activity under ‘Business Auxiliary Service’ prior to the amendment. It is clarified vide Circular No. 80/10/2004/S.T dated 17.09.2004 that production of goods not amounting to manufacture are taxable. Due to change in the definition of ‘Business Auxiliary Service’ the 'Production or processing of goods for, or on behalf of the client' became a taxable activity, however was exempted under Notification No. 08/2005-ST dated 01.03.2005 as amended, once the job-worked goods are returned to the client, who uses the same in the manufacture of the final goods, which are cleared on payment of duty.
Hence, it is held that the assessee is not liable to pay any Service Tax on the Services provided by him. Further, as no liability of tax arises, the question of interest and penalty does not arise.
Conclusion - i) The Respondent is eligible for the benefit of Notification No. 08/2005-ST dated 01.03.2005 and no service tax is payable by Respondent as demanded in the show cause notice. ii) The demand raised without classifying the impugned activity under 'Business Auxiliary Service' and treating the declared value as taxable value is unsustainable. iii) As no liability of tax arises, the question of interest and penalty does not arise.
The appeal filed by the Revenue is dismissed.
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2025 (6) TMI 1583
Levy of service tax - Business Support Service - activity of procurement and sale of scrips for exporters - extended period of limitation.
HELD THAT:- The Commissioner in the impugned order does not specify as to which of the above services were rendered by the appellant and moreover from which clauses of the above agreement, we do not find any payment being received by the appellant for rendering any of the above services. As rightly pointed out by the appellant, they had in fact purchased the scrips at discounted prices and sold them for a simple margin of profit and on these sales, VAT is being discharged which is not in dispute. The valuation adopted also is not on any service charges received by the appellant but on the difference of the face value of the license and the price at which the appellant had purchased the scrip which is not in accordance with the valuation rules.
Therefore, there being no service rendered as such and the imaginary value adopted also being not in accordance with the legal provisions of law, there are no reason to sustain the impugned order on merits.
The Tribunal in the case of ASL Motors Pvt. Ltd. vs. Commr. of C. EX. & Service Tax, Patna [2007 (11) TMI 73 - CESTAT, KOLKATA] in similar circumstances observed that 'When the appellants sold the cars and recovered the amount including the dealers’ margin, the dominant intent, was to sale the goods, namely, cars and not to provide free after sales service. In our view, the entire amount including the dealers’ margin has been rightly taxed to sales tax representing the value of the cars. The provision of free servicing is merely incidental and intended to promote the sale of the cars. Hence, we are of the view that no service tax can be levied on the amount representing the dealers’ margin or any part of it which already has been subjected to sales tax.'
Extended period of limitation - suppression of facts or not - HELD THAT:- The period of dispute involved in this appeal is from May 2006 to March 2010 and the notice was issued on 31.01.2010 invoking extended period of limitation. There are no valid reasons implicated by the learned Commissioner to invoke suppression.
Conclusion - i) There being no service rendered as such and the imaginary value adopted also being not in accordance with the legal provisions of law, there are no reason to sustain the impugned order on merits. ii) The extended period cannot be invoked.
The impugned order is set aside both on merits as well as on limitation - appeal allowed.
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2025 (6) TMI 1582
Classification of the service carried out by the appellant - works contract service or Commercial or Industrial Construction service - liability on composite works contract services prior to 01.06.2007 - applicability of exemption under N/N.15/2004 – ST dated 10.09.2004 - HELD THAT:- Since the issue is squarely covered by the judgment of Hon’ble Supreme Court in the case of CCE vs. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] wherein it had categorically held that indivisible works contract services are not liable to service tax prior to 01.06.2007. Hence, the impugned order is set aside.
Appeal allowed.
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2025 (6) TMI 1581
100% EOU - refund of service tax paid on input services under Rule 5 of the Cenvat Credit Rules, 2004 read with N/N. 5/2006-CE (NT) dated 14.03.2006 - Event Management Services - Pandal and Shamiana Services - HELD THAT:- This Tribunal in CST BANGALORE VERSUS M/S. JUNIPER NETWORKS INDIA PVT LTD [2014 (3) TMI 819 - CESTAT BANGALORE] allowed the appeals filed by the appellant stating that the appellant is eligible for the benefit of refund in respect of all the services and one of the services was Event Management Services which is in dispute in the present appeal.
Further, it is seen that the Commissioner (Appeals) vide Order-in-Appeal No. 14/2023 dated 12.01.2023 in the appellant’s own case had allowed availment of cenvat credit on Pandal and Shamiana Services, hence, the question of rejecting refund on these services cannot be sustained.
The Tribunal in the case of Dell International Services India P. Ltd. Versus C.C.E., Bangalore [2009 (6) TMI 447 - CESTAT, BANGALORE] observed while allowing refund on various input services under Rule 5 of the Cenvat Credit Rules, 2004 that 'Once the taxable service is exported and various input services have been utilized for providing the output service the appellants could be entitled for the rebate, which is equal to the service tax paid on the input services. Going by the definition of the “input service” under Rule 2(l) of the Cenvat Credit Rules, 2004 the service utilized by the appellants for providing output service can indeed be considered as input services. We also take note that the definition of “input service” indicates that the interpretation should be done in a liberal way in view of the phrase “activities relating to business”, there cannot be any dispute that the input services rendered by the appellants are all activities relating to the output services exported by the appellant'
Conclusion - i) The refund claim for Event Management Services is allowed, overruling the Commissioner (Appeals)'s rejection. ii) The refund claim for Pandal and Shamiana Services is also allowed.
The impugned order set aside - appeal allowed.
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2025 (6) TMI 1580
Levy of service tax - freight charges incurred paid for imported goods - period of dispute is from 04.05.2006 to 03.10.2007 - SCN issued on 30.03.2009 - HELD THAT:- As per section 65(3b) of the Finance Act, 1994, aircraft operator means ‘any person who provides transport of goods or passengers by aircraft’ and as per Section 65(105)(zzn) taxable service means ‘any service provided or to be provided to any person by an aircraft operator in relation to transport of goods by aircraft’.
Section 66A cannot be invoked unless the service rendered by the appellant is defined under Section 65(105) of the Finance Act 1994. Both the authorities do not divulge the service that are rendered by the appellant under which service, tax is being demanded as per Section 66A. The freight element on which service tax is being demanded are the charges paid by the appellant in Indian currency to the freight forwarders who are the agents, who have provided the service as an aircraft operator agent. Hence, the service tax, if any, is liable to be paid by these agents (freight forwarders) who have collected the freight charges from the appellant. The appellant has also placed on record various copies of Bills of Entry to prove that the freight element paid by them to the freight forwarders was part of the assessable value on which customs duty is paid, hence, it amounts to double taxation in as much on the same freight charges, service tax is being demanded under reverse charge from the appellant.
Conclusion - The appellant is not liable to pay service tax on air freight charges under Section 66A of the Finance Act, 1994 for the period from 04.05.2006 to 03.10.2007.
There are no merit in the impugned order demanding service tax on the appellant - the impugned order is set aside and Appeal is allowed.
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