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Showing 281 to 300 of 1182 Records
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2025 (2) TMI 902
Exemption from service tax - services provided to the government for public health purposes - Entry No.25(a) of Mega Exemption Notification No.25/2012-ST - HELD THAT:- The Appellants have provided vehicles for transportation of Doctors, Paramedics and health workers for carrying out their day to day work in the National Health Mission. Therefore, the provision of vehicles to personnel engaged in execution of National Health Mission etc. by the Appellant is to be construed as any service rendered to Government in relation to public health.
The services provided by the Appellants, involving the transportation of health professionals for the National Health Mission, fell within the exemption under Notification No.25/2012-ST.
The Original Authority was correct in holding that the services rendered by the Appellants are not taxable - The impugned order is set aside and the appeal is allowed.
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2025 (2) TMI 901
Taxability u/s 66A of the Finance Act, 1994 - Manpower Recruitment or Supply Agency service - services consumed entirely abroad - service recipient - appellant or liaison office of the appellant or USA based clients of the appellant - Extended period of limitaton - penalty - HELD THAT:- The appellants are a company incorporated in India and having registered office in India and are also having liaison office at Pittsburgh, USA and other places in USA. The appellants are engaged in the business of export of ITSS, on which they have not been paying service tax, as such, because the export of service is exempt. The appellants have entered into contract service agreements for providing ITSS with various clients like American Solutions Inc., M/s Wilington, M/s Inalytix and M/s Financial Oxygen, etc., whereas, for providing such services directly at the offices of the clients, the appellants have also entered into professional services sub-contract agreements with service providers like Plutus Solutions Inc., Rpasoditech Inc., SK Tech Inc., Princeton Infotech and Virtue Group, all located in USA and the manpower provided by these contractors were deployed only at client’s site in USA.
Hon’ble High Court of Allahabad in the case of Glyph International Ltd Vs UOI [2011 (12) TMI 201 - ALLAHABAD HIGH COURT] clearly held that insertion of section 66A w.e.f. 18.04.2006 is legal and proper by holding that no demand can be made in terms of the said provision for the period prior to that date by way of certain rules and notifications issued under different sections like 68(2) or by way of insertion of explanation under section 65 etc., therefore, the validity of section 66A post 18.04.2006 is not in dispute.
Whether the plain reading of the provisions under section 66A read with Rule 3(1)(iii) of TSPOI Rules, 2006, requires that not only services should be received in India but should also be consumed in India for it to become covered by the deeming provision for the purpose of charging service tax on RCM or otherwise? - HELD THAT:- There is no dispute about legality of section 66A for the period post its introduction, as has been held by Hon’ble High Court of Bombay in Indian National Shipowners Association Vs UOI [2008 (12) TMI 41 - BOMBAY HIGH COURT] as well as by Hon’ble Allahabad High Court in the case of Glyph International Ltd Vs UOI. The issue before the Hon’ble High Courts was whether recipient of service in India is liable to service tax from abroad before 18.04.2006 or only after the said date after enactment of section 66A. The Hon’ble Bombay High Court held that service tax can be charged only after the enactment of section 66A, which was upheld by Hon’ble Supreme Court, whereas, charging of service tax on similar service for the period prior to the enactment of section 66A was set aside. In the case of Glyph International Ltd Vs UOI (supra), the Hon’ble High Court of Allahabad, inter alia, held that section 66A of the Finance Act, 1994 creates legal fiction to deem import of service so that the provisions of Chapter V can thereon be applied.
Demand of service tax on the consideration received from BSNL - HELD THAT:- In the present facts of the case, it is not alleged that they were engaged in either maintenance or repair service or WCS and the only ground was that they have provided BAS to BSNL on which service tax has not been discharged - in view of inclusive part of the definition, the taxable service of processing of transaction is also covered within the ambit of BSS. It is found that the view of the Adjudicating Authority is correct as it is not a mere printing activity rather it involves developing of software, deploying of man and machines, whereby, certain processing is done to generate a bill and if they would not have done this, then it would have to be done by BSNL themselves. Therefore, it is in the nature of BSS and not BAS or WCS, as being claimed by the appellant.
The impugned orders upholding the demand of Service Tax from the appellant in respect of non-payment of Service Tax under ‘Manpower Recruitment or Supply Agency Service’, non-payment of Service Tax under ‘Business Auxiliary Service’ on referral fee and commission paid to the service provider located outside India i.e., USA and non-payment of Service Tax under ‘Business Support Service’ provided to M/s BSNL, do not suffer from any infirmity and therefore, we do not find any reasons to set aside the impugned orders.
Extended period of limitation - Penalty - HELD THAT:- On going through these details, he observed that the liaison office system was in vogue for the appellant since 2001-02 and they have been claiming expenditure in their Annual Returns of the expenses incurred in connection with the operations of such liaison offices, which was, however, disallowed by the Income Tax department. This aspect further substantiates that liaison office was only an extended arm of Indian company, not having its own books of account, income/expenses or profit/loss. He has also relied on the chronology of sequences from start of audit till the issue of SCN, which clearly showed that last of the documents were submitted by the appellant only on 01.10.2010. Therefore, the Adjudicating Authority has taken into consideration all aspects and has dealt with extensively to come to the conclusion that in the given factual matrix, the invocation of extended period as well as imposition of penalty is maintainable.
Conclusion - i) The mere fact that the basic conditions that the service recipient should be located in India, service provider is located outside India and the services are received by the recipient would bring it within the ambit of section 66A. ii) Section 66A creates a legal fiction allowing the taxation of services received from abroad by an Indian entity, regardless of where the services are consumed. The recipient's location in India is sufficient for taxability. iii) The invocation of extended period as well as imposition of penalty is maintainable.
There are no infirmity in the impugned orders - appeal dismissed.
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2025 (2) TMI 900
Clubbing of vacant land into the value of services - Renting of Immovable Property Service (RIPS) - Non-payment of Service Tax - Rental Advances - Site Formation & Clearance Service - Commercial of Industrial Construction Service - Extended period of limitation.
Whether in the facts of the case the entire area for which separate agreements have been entered into by the appellants can be considered as land appurtenant to the warehouses or these are to be considered as standalone vacant lands, which cannot be part of the services under the category of RIPS?
Renting of Immovable Property Service - HELD THAT:- In terms of the agreement, which has been relied upon by the Adjudicating Authority, it is obvious that the dominant estate in this case would be the covered shed/warehouse and the open land/yard would be appurtenant to this covered shed/warehouse. It is obvious from the wordings of the agreement, especially, Annexure-2 to the agreement for covered warehouses that it has got no utility without the facilities like turning radius suitable for 40 feet trailers, land being not low lying and free from flooding, inundation, fencing all around the premises up to 4 feet height, entrance and exit gates on the main road side, etc. Therefore, the area under covered warehouses can be accessed and optionally utilized only with these facilities when the vacant land is also used in conjunction with the closed warehouse. Interestingly, the agreement is for covered warehouse approximately measuring 20,000 Sq Meter subject to certain conditions - a conjoint reading of the terms and conditions of these two agreements would show that the vacant land for which separate agreement has been entered into is nothing but land appurtenant thereto to the covered area/shed/warehouse. They are closely interlinked and interdependent. Thus, by relying on the definition of RIPS under section 65(105)(zzzz), the vacant land has to be considered as land appurtenant to the warehouses. Therefore, we do not find any infirmity in the impugned order confirming the demand on this count.
Demand on account of vacant land at A9 Industrial Area Kapparada, Kancherapalam, Visakhapatnam to M/s Avnash Automobiles Pvt Ltd - HELD THAT:- The appellants have a case because if there was no building at the time of leasing out the vacant land and if it was given prior to 01.07.2010, then there would not be any demand. The fact that they have constructed a building before hand, which was also let out to M/s Avnash Automobiles Pvt Ltd is also not clear. Therefore, this factual aspect needs to be examined by the Adjudicating Authority subject to appellant submitting the evidence to the effect that there was neither a building on the vacant land at the time of leasing out nor the provision for excluding vacant land from the purview of taxation was applicable at the time of leasing out. The fact that there were some other building for which no lease has been granted by the appellant to M/s Avnash Automobiles is obvious as the agreement is only for vacant land and there is no mention of any other agreement whereby the closed building, etc., was also given on lease. Therefore, merely because a land is appurtenant to any building, it will not get covered within the scope of service if building/shed has not been rented out. It is the other way round that where a building has been rented out, which also has land appurtenant thereto, then that land will also be included for the purpose of valuation of building. Therefore, this matter also needs to be remanded back to the Original Adjudicating Authority for redetermination of Service Tax liability.
Letting out of property located at S.No.51/1 B, IDA, Block-A, Mindi, Visakhapatnam to M/s Avnash Automobiles - HELD THAT:- There are much force in the ground that there is no strong evidence on record to suggest that just because certain buildings were existing, the entire land would be considered as land appurtenant to the building, especially, when the agreement is only with respect to vacant land and there is no other cogent evidence by the department to prove that the clients of the appellants were using both building and the land though showing only land in their agreement. Therefore, in view of the same, the demand would not sustain on this ground and it will be only a vacant land, which is not includable for the purpose of charging Service Tax under RIPS.
Exemption from Service Tax in respect of vacant land let out to M/s ATR Cars Pvt Ltd. - HELD THAT:- The Adjudicating Authority has clearly held that the appellants have let out only the vacant land appurtenant to the building and not the building and therefore, liable for exclusion from the definition of ‘immovable property’ under section 65(105)(zzzz) of the Finance Act, 1994. Merely because he was unable to exclude the income arising out of this property, no relief was given, which is not correct. The appellants are at liberty to show them the breakup of rents received from M/s ATR Cars and the Service Tax liability which has been included in the total liability needs to be excluded for the purpose of calculating the demand. Therefore, this also needs to be remanded back.
Non-payment of Service Tax during the period May, 2009 to Feb, 2010 - HELD THAT:- There is no doubt about the classification or the valuation and the only dispute is as regards amount payable and paid. As per the appellant, the entire Service Tax liability was discharged except for the interest liability on the delayed payment but the same was not accepted in view of the fact that appellant has not included rent received for the open land and that certain documents were also not submitted. Since the issue as regards classification and Service Tax leviability is not disputed, the only dispute is whether the total amount of Service Tax is paid with interest or there is some short recovery - Since it would require recalculation of amount as well as verification of certain documents, etc., and therefore, to this extent, the impugned order is set aside and the matter is required to be remanded back to the Original Adjudicating Authority for recalculating the total demand of Service Tax along with interest after allowing abatement for tax and interest already paid.
Rental advances - HELD THAT:- The demand has been confirmed on the ground that the said amounts cannot be treated as security deposit, inasmuch as the said amounts were actually rental advances which were adjusted on the monthly pro rata basis as agreed upon in the agreement between the appellant and the tenant. The Adjudicating Authority has also considered that there is a possibility that in respect of some of these pro rata payments, the Service Tax would have been paid at the time of payment of rent. However, the said submission of the appellant could not be verified as no supporting documents were available. Therefore, the entire demand has been upheld. The amount cannot be considered as security deposit, inasmuch as it has been applied continuously for discharging of rent, which is an admitted position and therefore, Service Tax would be leviable on the said amount. However, as the appellants are submitting that some of these amounts have already suffered Service Tax, this needs to be verified. Accordingly, this issue is also required to be remanded back for working out the net Service Tax payable.
Site Formation & Clearance Service - HELD THAT:- The services of muck cleaning and disposal is rightly classifiable under the category of SFCS. The appellants have not refuted the amount of Service Tax demanded by the department, which they have paid under Works Contract Service (WCS) and also certain portion under SFCS. Therefore, as far as the classification is concerned, there is no dispute that it is in the nature of SFCS. However, there is dispute as regards some of the amounts already paid under the category of WCS as well as under the category of SFCS. These amounts need to be adjusted against the total amount demanded from the appellant under this category. Therefore, this issue is also required to be remanded back to the Original Adjudicating Authority for recalculation.
Commercial of Industrial Construction Service - HELD THAT:- The Adjudicating Authority has not considered the abatement claimed by the appellant for calculating the total Service Tax liability while paying certain Tax liability under this category. The appellants could not put forth any evidence to claim having fulfilled the conditions for availing the benefit under Notification No.01/2006-ST dt.01.03.2006 and therefore, the same was denied by the Adjudicating Authority. Here, it is again felt that proper opportunities were not given to the appellant to adduce evidence in support of their claim for abatement in terms of Notification No.01/2006-ST. Therefore, this issue is also remanded back to the Original Adjudicating Authority for recalculation of Service Tax liability.
Time limitation - suppression of facts or not - HELD THAT:- The appellants have not canvassed any concrete reasons as to why the extended period should not be invoked in the factual matrix of this appeal. In fact, they have although been claiming that the demand itself is not maintainable on merit. They have also taken a plea from time to time that certain amount of service tax has already been paid by them, though not as per the demand made by the department. Therefore, having regards to submissions from both sides and the facts of the case, we find no infirmity in the order of the adjudicating authority holding that extended period is invocable in this case.
Conclusion - i) The vacant land leased by the appellant was appurtenant to the warehouses and subject to service tax under RIPS. ii) For SFCS and CICS, recalculation of tax liability is required, considering abatements and the nature of contracts. iii) The rental advances are part of the taxable value and required verification of payments to avoid double taxation. iv) The invocation of the extended period for demand upheld due to the appellant's failure to register and pay service tax timely.
Appeal allowed partly by way of remand.
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2025 (2) TMI 899
Cenvat credit in respect of input services used for exporting output services - denial on various grounds including their output service not being a taxable service as also on account of input services not having any nexus with the output service.
Whether in the absence of sufficient documents or description in the export invoice, can the service be treated as non-taxable or exempt service as such? - HELD THAT:- Admittedly, there is an agreement in terms of which many kinds of services are required to be provided to their parent company. However, there has not been any attempt to classify those services under the category of one or more taxable services, after going through the details of the said services. Therefore, apart from the services being claimed under BSS or ITSS, there could be possibility that some of these activities may not at all be in the nature of service or they would probably fall under some other service head. We also find that there is a clear provision under Rule 4A to give, inter alia, specific description of the services irrespective of whether it is meant for consumption within the country or abroad. Since they have used only abbreviated/short terms in their export invoices, the Adjudicating Authority was correct that it would not be possible for them to classify the same and since the appellant failed to convince the department that their export services are taxable, the next question would be whether the credits would also be not admissible in view of the fact that the services were exempted services, without resorting to proving any nexus or otherwise.
A great deal of services are covered within the category of agreements and covered within the schedule to the agreements. Schedule-A covers operational services: development, with generic description as development. The definition itself says that ‘to provide services and developmental support’ and gives certain examples. Merely by going through these services, one cannot arrive at proper classification during the pre-negative list regime where each and every activity has to be classified under specific heading of taxable services.
This is not the finalization of classification as proposed/submitted by the appellant, rather only an observation by the Commissioner (Appeals) and the entire matter was remanded back to the Original Authority for reexamination and to be decided on merit.
If they are treated as taxable service, can the credit be allowed if there is no nexus between the input service and the output service? - HELD THAT:- Since it is already held that the export service is non-taxable/exempt service, they have not gone into the issue of ineligibility on account of nexus between input and output services. It is seen the nature of services in respect of which the credit has been taken and find that most of these services would be eligible, in view of settled legal position. However, since this issue has not at all been discussed by the Adjudicating Authority even when the same was one of the grounds for denying the credit in the SCN, we feel that to that extent the impugned orders are non-speaking. More so, when some of these services may be having nexus, while some of them may not at all be having nexus with the output service.
Conclusion - The appeals are allowed by way of remand with direction that the Adjudicating Authority will go through the submissions both on the grounds of proper classification as well as the nexus before arriving at the final demand in case of inputs not having been considered eligible either on account of nexus or on account of concerned export service not being taxable service.
Appeals are allowed by way of remand.
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2025 (2) TMI 898
Refund of unutilized Cenvat Credit u/s 142(3) of the CGST Act, 2017, read with Rule 5 of the Cenvat Credit Rules, 2004, and Section 11B of the Central Excise Act, 1944, by virtue of Section 83 of the Finance Act, 1994 - Rejection on the ground that there exists no provision of refund of the balance Cenvat Credit in the Cenvat Credit Rules, 2004 - HELD THAT:- The decision of the Hon’ble Jharkhand High Court in the case of M/s Rungta Mines Limited [2022 (2) TMI 934 - JHARKHAND HIGH COURT] is exactly on the issue which is involved in the present case. The Hon’ble High Court after analyzing all the decisions cited before it, has come to the conclusion that under the existing law, cash refund cannot be granted of Cenvat Credit which is available on the appointed day i.e. 01.07.2017.
Conclusion - The appellant's failure to transition the Cenvat Credit and the lack of export activity precluded them from claiming a refund under the applicable legal framework.
Appeal dismissed.
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2025 (2) TMI 897
Recovery of service tax with interest and penalty - rent-a-cab service - period April 2006 to March 2009 - HELD THAT:- It is found that the stand of the adjudicating authority that the decision of the Tribunal on non taxability in identical circumstances was not valid precedent from non-acceptance of the decision on merit is erroneous. That the reviewing authorities did not consider the said decision as fit to contest in appeal either owing to the threshold prescribed by the Central Government under the Litigation Policy or for any other reason and does not detract from the applicability of such an order.
The Hon'ble Supreme Court, in re Kamalakshi Finance Corporation Ltd [1991 (9) TMI 72 - SUPREME COURT] has eloquently determined the mandate of judicial discipline and extraction of a contends of a circular of Central Board of Excise & Customs (CBEC) does not condone the demonstrated lack of judicial discipline. Nor can such circular purport to guide adjudication in a particular direction. It is also seen that the rejection was based upon a N/N. 4/2004 dated 31st March 2004 which preceded the Special Economic Zones Act, 2005. Section 51 of Special Economic Zones Act, 2005 renders the provisions of that law to prevail over any other statute in the event of conflict.
Conclusion - As the adjudicating authority has relied upon an outdated notification the final outcome not tenable warranting a fresh appreciation of proposals in the show cause notice in the context of settled law as well as exemption afforded by Special Economic Zones Act, 2005.
The matter remanded back to the original authority for a fresh adjudication within the framework of law - appeal allowed by way of remand.
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2025 (2) TMI 896
Invocation of extended period of limitation - appellant's turnover of services for the financial year 2015-16 was accurately reported or not - HELD THAT:- The plea is that settled law, in re Dinesh Chandra R Agarwal [2023 (11) TMI 1080 - CESTAT AHMEDABAD] and in re GD Goenka Pvt Ltd [2023 (8) TMI 995 - CESTAT NEW DELHI] that were adjudicated in identical or in near identical circumstances, precludes resort to extended period of limitation under section 73 of Finance Act, 1994 merely from such discrepancy. At this stage, it is not required to examine the applicability of these two decisions as the adjudicating authority has correctly pointed out that no steps were taken by appellant to rectify the statutory filings, which, according to their submissions in response to the show cause notice, was genesis of the dispute.
While neither adjudicating authority nor the Tribunal is concerned with the correctness of the records filed before other tax authorities, the inferences that may be drawn from the two records, neither of which were defended except by furnishing of details of sale of goods either independently or along with the services that is beyond the purview of Finance Act, 1994, is the foundation for rectification of one of the returns on the one hand or deficiency in one or the other on the other hand. Empowerment to invoke section 73 of Finance Act, 1994 extends from the obligation in section 70, read with section 68, of Finance Act, 1994 and not much different from the scope of normal assessment under section 72 of Finance Act, 1994 which enables obtaining of additional documents and evidence for re-determination of sum payable by an assessee.
Conclusion - It was incumbent upon the adjudicating authority to examine the details of the goods said to have been supplied either by way of sale or in the course of supply of service, that constitutes ‘trading’ and, thereby, excluded from the purview of taxability in Finance Act, 1994. Failure to undertake such exercise affects the credibility of the impugned order warranting remand back to the original authority for a fresh decision after taking note of the documents evidencing supply of goods which are not liable to be included in the value of taxable service for the disputed period.
Appeal allowed by way of remand.
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2025 (2) TMI 895
Denial of entitlement to refund of CENVAT credit accumulated - procurement of ‘inputs’ and ‘input service’ for undertaking ‘development of pharmaceutical stable coleman hydrochloride tablets’ under agreement with foreign entity that were claimed to have been exported - Failure to address the issue properly by appellate authority - Violation of principles of natural justice - HELD THAT:- The first appellate authority had not appreciated the issue in dispute before it which is essential in determining applicability of rule 4 of Place of Provision of Services Rules, 2012. Instead, the first appellate authority ruled on the taxability devolving on the appellant as ‘intermediary’, under rule 9 of Place of Provision of Services Rules, 2012, which was neither proposed in show cause notice nor proposed in appeal of jurisdictional Commissioner of Service Tax. In the light of the elaboration on ‘intellectual property rights’, there are no reasoning as to the manner in which such rights had been created in India. A right relating to ‘intellectual property’ is not, as expressed by the first appellate authority, a provision for incentivizing innovation but is very much for securing property in the manner peculiar to each national jurisdiction. It is not policy but a prescription in law and the vestment of such right must meet the test of law.
A right that is not registered in India cannot be deemed to have come into existence in the territory of India. The finding of the first appellate authority is, thus, mis-directed. The consequence in terms of allowing the appeal of jurisdictional Commissioner of Service Tax as well as rejection of the appeal of assessee lacks validity.
Conclusion - The impugned order is set aside and the matter remanded back to the first appellate authority for adjudging the validity of the grounds preferred by the respective appellants in accordance with the law as set out in Place of Provision of Services Rules, 2012 and judicial pronouncements now in place.
Appeals are allowed by way of remand.
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2025 (2) TMI 894
Violation of principles of natural justice - impugned order has been passed without properly appreciating the facts - denial of cross-examination of witnesses by the Adjudicating Authority - violation of Section 9D of the Central Excise Act, 1944 - HELD THAT:- The identical issue has been decided by the Hon’ble Punjab & Haryana High Court in the case of Jindal Drugs Pvt. Ltd. [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] as well as by this Tribunal in the case of M/s Lauls Ltd. [2023 (7) TMI 1113 - CESTAT CHANDIGARH] and M/s Tibrewala Industries (P) Limited [2023 (7) TMI 1112 - CESTAT CHANDIGARH] wherein it was held that the cross-examination of witnesses whose statements were relied upon by the Revenue to make out a case against the assessee has to be allowed and by following the ratio of the said decisions, the impugned order is not sustainable and therefore, the same is set aside and the cases remanded back to the Adjudicating Authority for a fresh decision after affording opportunity of cross-examination of the material witnesses and by following the procedure as prescribed in Section 9D of the Central Excise Act.
Conclusion - Both the appeals are allowed by way of remand to the Original Authority, who will comply with the requirement of Section 9D of the Central Excise Act by affording an opportunity of cross-examination and thereafter will pass a reasoned order in accordance with law.
Appeal allowed by way of remand.
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2025 (2) TMI 893
Irregular availment of CENVAT Credit - credit of inputs, input services and capital goods used in captive mine of the appellant, Bolani Mines has been correctly availed by the appellant at its Durgapur Steel Plant and correctly utilised in or in relation to manufacture of dutiable final products therein or not? - CENVAT Credit availed and utilised by the appellant against the ISD documents issued by the Bolani Mines was legal and valid - Bolani Mines can be termed as Input Service Distributor under Rule 2(l) of the CENVAT Credit Rules.
HELD THAT:- The issues involved is no more res integra, as this Tribunal has already decided these issues in favour of the appellant in their own cases, with respect to the companies located at other places and for different periods - The credit disallowed along with interest and the penalties imposed in the impugned order are not sustainable.
Conclusion - The distribution of credit by captive mines as ISD was in accordance with the law, and the credits disallowed in the impugned order were not sustainable.
The appeals filed by the appellants /SAIL are allowed.
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2025 (2) TMI 892
Constitutional validity of Section 3C of the Kerala Local Authorities Entertainments Tax Act, 1961 - Section 5 of the Kerala High Court Act, 1958 - levy of cess on cinema tickets to fund the Kerala Cultural Activists' Welfare Fund - HELD THAT:- The Cess levied under Section 3C of the Act of 1961 and collected is for the Kerala Cultural Activists' Welfare Fund, established under the Act of 2010. This Cess shall not exceed Rs. 3/- per cinema admission where the ticket price is more than Rs. 25/-. The local authority has to collect the Cess along with the tax on cinema admission and, after deducting the collection charges at a rate specified by the Government, has to transfer the proceeds to the Kerala Cultural Activists' Welfare Fund Board. The Cess is levied on the cinema viewers and not on the theatre owners. The impugned provision seeks to levy a cess on the ticket purchased by cinema viewers for the purpose of entertainment, and, therefore, it is clearly relatable to entertainment under Entry 62 of List II, VII Schedule to the Constitution of India.
In the case of M/s. Vijayalakshmi Rice Mill [2006 (8) TMI 307 - SUPREME COURT], the Hon'ble Supreme Court, had an occasion to consider the term "Cess". In this case, a cess under the Andhra Pradesh Rural Development Act, 1986, which was in addition to the purchase of sales tax, was the subject matter of challenge. The contention was that the enactment does not fall in any of the entries in List II or List III of Schedule VII to the Constitution of India. The Supreme Court considered the question of whether the said impost was a fee or a tax. In that context, the Supreme Court elaborated on the term "Cess" and held that ordinarily, Cess is also a tax but is a special kind of tax.
The Cess can also mean a tax levied for a special purpose or as an increment to the existing tax and, in given circumstances, a fee. In the case at hand, entertainment tax is already levied under the Act of 1961 and the Cess under Section 3C is an additional levy. Thus, the contention of the learned Senior Advocate for the Appellants that under Entry 62 of List II of Schedule VII to the Constitution of India, only tax can be levied, and Cess cannot be levied is without merit. The Cess is another term for the tax that is levied, which is a special kind of tax. The levy of impugned Cess is traceable to Entry 62 of List II, VII Schedule to the Constitution of India.
If the levy of the impugned Cess on entertainment improves the quality of entertainment, then a broad correlation will be established. We find a correlation between the Cess on entertainment levied on the cinema viewers as a fee and the utilisation of the Fund for the welfare of cultural activists. That is because the levy on cinema viewers contributes to the welfare of cultural artists in the State and the overall development of cultural and artistic ethos. When cultural activities relatable to art are supported and valued, it fosters a culture that appreciates art. This then creates a positive cycle of creativity and appreciation. When society encourages and supports artists, the overall artistic ethos strengthens, leading to quality artistic output - the impugned Cess can be traced to the legislative power of the State Government to Entries 62 and 66 of List II, Schedule VII to the Constitution of India, and the levy of this Cess is relatable to the benefits received by the cinema viewers on whom the Cess is levied.
Challenge to levy of impugned Cess on the grounds of violation of Articles 14 and 19 of the Constitution of India - HELD THAT:- The Cess impugned is to be collected by the local authority. The proceeds of the Cess have to be remitted by the local authority to the account of the Kerala Cultural Activists' Welfare Fund Board. There is no role for the theatre owners, and the levy does not fall on them. No data has been provided to demonstrate how this levy amount per ticket has affected the functioning of the theatre owners' business. This argument is not supported by adequate pleadings and cannot be accepted.
Conclusion - i) The constitutionality of Section 3C upheld, affirming the State's legislative competence under Entry 62 of List II. ii) The cess was a valid tax on entertainment, serving a specific purpose of funding the welfare of cultural activists.
There is no merit in the challenge. There is no error in the view taken by the learned Single Judge - Appeal dismissed.
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2025 (2) TMI 891
Reopening of assessment - Period of limitation - Bogus purchases - HELD THAT:- Admittedly, as per facts of the case, dates of the notices issued and the decision in the case of Kachrulal Jitendra Kuma [2025 (2) TMI 865 - ITAT RAIPUR] we find that the issue in the present case is squarely covered in favour of the assessee.
Evidently, under the facts and circumstances of the present case, the notice u/s 148 (under new regime) was issued on 29.06.2022, whereas the same was required to be issued on or before 23.06.2022, therefore, it can be safely held that the notice u/s 148 (new regime) was issued belatedly beyond the limitation provided in the Act, which was further extended in terms of judgment of Ashish Agrawal [2022 (5) TMI 240 - SUPREME COURT] In view of such facts, the assessment framed on the basis of a notice u/s 148 (new regime) dated 29.06.2022, which is barred by limitation, thus, is rendered as bad in law, therefore, stands quashed.
As the impugned assessment for AY 2014-15 in the instant case has been rendered as quashed for the want of valid assumption of jurisdiction by the Ld. AO, therefore, we refrain to deliberate upon and to deal with the other contentions raised by the assessee qua the impugned addition made by the Ld. AO and to the extent sustained by the Ld. CIT(A), thus, the same is left open.
Assessment for the want of valid assumption of jurisdiction by the Ld. AO quashed, therefore, the issues raised by the revenue become infructuous, accordingly, the appeal of the revenue stands dismissed.
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2025 (2) TMI 890
Levy of tax and penalty for petitioner's technical mistake in mentioning the wrong document number in the e-way bill - HELD THAT:- It is admitted that the goods in question were onward journey from Mathura to Mirzapur when it was intercepted at Etawah and on physical verification, it was found that there was mis-match in tax invoice and e-way bill. In the e-way bill, instead of tax invoice number, SAP document number was mentioned, which was also present in the tax invoice itself. The petitioner has brought on record copies of the tax invoice and e-way bill as Annexure No. 2 to this writ petition. Further, except the aforesaid discrepancy, no other discrepancy has been pointed out by the authorities below. Once the authorities below have not pointed out any other mismatch relating to quality, quantity, items of goods, etc. as disclosed in the tax invoice, the error can be a genuine human error while generating the e-way bill.
Further, the record shows that no finding has been recorded with regard to intention to evade payment of tax, which is essential for levying penalty. The human error, which has been committed while generating the e-way bill, cannot be the only ground for justifying initiation of proceedings under section 129 of the GST Act.
Conclusion - The technical error in the e-way bill, coupled with the absence of any intention to evade tax and the lack of other discrepancies, rendered the impugned orders unsustainable in the eyes of the law.
Petition allowed.
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2025 (2) TMI 889
Refund of the GST paid on a Reverse Charge Mechanism (RCM) basis for the procurement of holographic stickers from the Prohibition and Excise Department of the Government of Tamil Nadu - case of the petitioner is that the petitioner was under a bona fide belief that the petitioner was liable to pay tax on the “holographic stickers” purchased from the Prohibition and Excise Department of the State on Reverse Charge Basis (RCB) in terms of Section 9 (3) of the respective GST enactments of 2017 read with Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017.
HELD THAT:- As far as the sale and purchase of “holographic stickers” (excise labels) are concerned, they are supplied by the Prohibition and Excise Department of the Government of Tamil Nadu. The “holographic stickers” are to be affixed on the manufactured and bottled alcoholic liquor - If the sale of “holographic sticker” is to be treated as a supply of service, the petitioner would be liable to pay tax on Reverse Charge Basis (RCB) in terms of Sl.No.5 to Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017.
Holographic Sticker (Excise Label) is a “label”. Holographic Sticker (Excise Label) is therefore 'goods' within the meaning of Section 2 (52) of the respective GST enactments. In paragraph 4.3 of Order in RFD-06 in C.No. IV/09/51/2020-GST (R) dated 20.08.2020 itself it has been clarified by the 2nd respondent that excise labels i.e., “holographic stickers” were supplied by the Prohibition and Excise Department - there is no dispute that “label” is “thing” viz., noun. It is a thing and therefore “goods” within the meaning of Section 2 (52) of the respective GST enactments as “goods” means every kind of movable property.
The only contention of the respondents is that there was a “composite supply” as the label was supplied by the Prohibition and Excise Department is for affixing on the liquor bottles manufactured by the petitioner as per the relevant instructions / procedures together with grant of excise license - The question of treating the activity of the Prohibition and Excise Department of the Government of Tamil Nadu in granting excise license to manufacturers for manufacturing of alcoholic products and supply of “holographic stickers” (excise labels) is not a “composite supply” within the meaning of Section 2 (30) of CGST Act, 2017.
Supply of “holographic sticker” is not a “taxable supply” within the meaning of the definition in Section 2 (108) of the respective GST enactments, as grant of excise license is exempted under Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019.
The activity of grant of excise license for consideration in the form of license fee / application fee is neither a supply of “goods” nor the supply of “services” within the meaning of Section 7 (2) of the respective GST enactments in view of Notification No. 25/2019-Central Tax (Rate) dated 30.09.2019, there is no merits in the Impugned Orders - The supply of “holographic stickers” (excise labels) cannot be construed as supply of “service” under Section 2 (52) of the respective GST enactments. The “holographic stickers” (excise labels) are not “services” within the meaning of Section 2(102) of the respective GST enactments.
The principles of estoppel equity are alien to tax jurisprudence. Merely because the petitioner had unwittingly paid tax on Reverse Charge Basis (RCB) in terms of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017 in the past ipso facto would not mean that the petitioner was bound by its past practices. There is no contract with the respondents for invoking promissory estoppel against the petitioner - If the petitioner has paid tax on Reverse Charge Basis (RCB) by mistake, it is entitled to claim refund under Section 54 of the respective GST enactments.
The 2nd respondent is therefore directed to process the refund claims of the petitioner and refund the amounts paid by the petitioner, strictly in accordance with Section 54 of the respective GST Acts read with Rule 89 of the respective GST rules in the light of the above observations, within a period of 3 months from the date of receipt of a copy of this order.
Conclusion - The petitioner is entitled to a refund of the GST paid on a reverse charge basis for the supply of holographic stickers, as the supply is classified as goods and not services.
Petition allowed.
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2025 (2) TMI 888
Classification of imported goods - whether, the same merits classification under Customs Tariff Item (CTI) 2309 9090 as claimed by the appellants; or, is it classifiable under Customs Tariff Heading (CTH) 29.36 as determined by the learned Commissioner of Customs, for deciding on the appropriate levy of customs duty? - it was held by CESTAT that 'The impugned goods are classifiable under 2309 9090 of the First Schedule to the Customs Tariff Act, 1975.' - HELD THAT:- There are no good ground and reason to interfere with the impugned judgment, especially in the light of Circular No. 188/22/96-CX dated 26.03.1996.
Hence, the present appeals are dismissed.
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2025 (2) TMI 887
Correctness of order of release of gold when the respondent has failed to establish their ownership of the said gold and has failed to substantiate that the gold bars are not smuggled one - proper appreciation of provisions of Section 110A of the Customs Act, 1962 at the time of passing the order for release of gold - burden of proof in terms of Section 123 of the Customs Act - HELD THAT:- It is found from the impugned order that the learned Tribunal has endeavoured to verify the genuineness of the challans submitted by the respondent and the respondent was directed to produce copies of the preceding and succeeding challans issued and accordingly, the respondent produced challans in respect of serial numbers 220, 221, 222 and 223 at the time of personal hearing before the Tribunal. The learned Tribunal on facts found that the challans were serial in number and the signatures of the authorized signatory available in challan nos. 220, 221 and 222 were tallying. Therefore, the learned Tribunal came to the conclusion that the respondent had prima facie established that they have issued the challans bearing Gate Pass No. RM/2023-24/KOL/222 dated 11.10.2023 for the purpose of job work of the 4 gold bars of 1 kg. each through M/s. Kalyan Jewellers. Further, the learned Tribunal verified the challans and found that the gold bars having mark/numbers as 4400493-96 were issued for job work by the respondent.
Further, the same marks and numbers were also found to be available in the packing list issued by M/s. Brinks India Pvt. Ltd. at the time of release of the 14 kgs. of gold bars to the respondent. Therefore, the learned Tribunal came to the prima facie conclusion of correlation between the 4 kgs. of gold bars purchased by them from HDFC Bank Ltd. and the gold seized by the officers on 11.10.2023.
Taking note of the prayer made by the respondent being one for provisional release of the seized goods and noting that the respondent has prima facie established correlation between the 4 kgs. of gold bars purchased by them from M/s. HDFC Bank Ltd. and the 4 gold bars seized by the officers, the Tribunal came to the conclusion that the goods can be provisionally released subject to certain conditions to safeguard the interest of revenue.
Conclusion - The Tribunal had appropriately considered the evidence and made a reasoned decision based on the facts presented.
Appeal dismissed.
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2025 (2) TMI 886
Classification of Wheat Flour Sheet Dough imported by the Petitioner - seeking withdrawal of impugned Seizure Memo - HELD THAT:- When no Show Cause Notice is issued, to ask the importer to furnish a Bank Guarantee even to secure the anticipated redemption fine and anticipated penalties, would be rather harsh. We are, therefore, of the view that interest of justice would be served if the said goods imported by the Petitioner under all six Bills of Entry [listed at items (a) to (f) of paragraph 2 of this order] are allowed to be provisionally released on the Petitioner executing a Provisional Duty Bond as per the assessable value of all six Bills of Entry and a Bank Guarantee equivalent to a sum of Rs.85 Lakhs. This Bank Guarantee would secure the Revenue for approximately 50% of the differential duty, if payable by the Petitioner. It is accordingly so ordered.
The Provisional Duty Bond as well as the Bank Guarantee shall be furnished by the Petitioner to Respondent No. 3 within a period of one week from today. On the aforesaid Bond and Bank Guarantee being furnished, the Customs Department shall provisionally release the said goods of the Petitioner covered under the aforesaid six Bills of Entry within a period of one week thereafter.
Conclusion - The provisional release of the goods imported under all six Bills of Entry allowed, upon the Petitioner's execution of a Provisional Duty Bond and a Bank Guarantee equivalent to Rs. 85 Lakhs.
Petition disposed off.
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2025 (2) TMI 885
Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - certificate had been incorporated in an earlier bill of entry - violation of regulation 10(k) of Customs Brokers Licensing Regulations, 2018 - HELD THAT:- The grounds on which the licensing authority has held that the customs broker to have breached regulation 10(k) of Customs Brokers Licensing Regulations, 2018 does not appear to fit in with the framework of the said regulation which mandate that the enumerated details be maintained in an orderly and itemized manner as specified by the designated officials. There is nothing on record to establish that a method of maintaining upto date records had been prescribed by any of the said authorities. In the absence of such specifics, there is no standard against which a breach could be noticed and taken cognizance of. The finding that it was not strain of pandemic which caused this double filing of bill of entry and that the absence of any records in the systems of the customs broker was the consequence of deliberate erasure has not been proved and is only surmise. In either situation, there is no finding as to the manner in which regulation 10(k) Customs Brokers Licensing Regulations, 2018 has been breached.
The revocation of licence and other detriments do not survive - the impugned order is set aside - appeal allowed.
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2025 (2) TMI 884
Challenge to assessment order - authorization given to the Deputy Commissioner, Guntakal was not available in a valid format - HELD THAT:- In the present case, the turnover of Rs. 4.54 crores, being the turnover relating to sale of alcohol and the turnover relating to sale of food has been taxed. The sale of alcohol, in the State of A.P., under the A.P. VAT Act, was to be taxed under Schedule VI ‘at the point of first sale in the State’. This sale would be the sale between M/s. Andhra Pradesh Beverages Corporation Limited and the petitioner. The subsequent sale of liquor by the petitioner to his customers would not be exigible to tax.
Explanation-II to the definition of ‘taxable turnover’ stipulates that the sale prices relating to second and subsequent sale of goods, enumerated in Schedule VI, shall not form part of ‘taxable turnover’. This would mean that the entire turnover of Rs. 4.54 crores, which is on account of sale of alcohol would have to be excluded from the taxable turnover of the petitioner. This would leave a turnover of Rs. 1,02,20,407/-, which is the turnover relating to sale of food. As the turnover in question, is less than Rs. 1.5 crores per year, the same would be taxable only under Section 4 (9) (d).
Conclusion - The sale of alcohol was taxed at the point of first sale and subsequent sales were not taxable. Therefore, the turnover from alcohol sales should be excluded from the taxable turnover, leaving only the turnover from food sales, which was below the threshold for the higher tax rate.
The matter remanded back to the assessing authority to pass fresh assessment orders by excluding the turnover of Rs. 4.54 crores arising out of sale of liquor from the turnover on which tax is levied - petition partly allowed by way of remand.
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2025 (2) TMI 883
Scope of Revision Petition - Set Top Boxes (STBs) are goods within the meaning of section 2(15) of the Karnataka Value Added Tax Act, 2003 or not - consideration for transfer of right to use STB - mutual exclusiveness of service tax and VAT - retrospectivity of Government notification dated 15.03.2021.
Scope of Revisional Jurisdiction - HELD THAT:- Revision is more a matter of power of the Revising Authority than the right of revisionist. Several Statutes provide for suo moto Revision whereas suo moto Appeals are almost unknown - The scope of Appeal or Revision depends upon the text of the provision of a statute which creates the right of Appeal, or vests revisional power. It has been a long settled position of law that normally scope of Appeal is wider than that of Revision. Ordinarily, first appeal is both on law and facts unless the statute otherwise says.
Thumbnail description of Section 65 - HELD THAT:- In terms of order on Revision, Assessment Orders have to be modified and any excess payment has to be refunded to and any deficit is to be made good by the Assessee, says Sub-section (9). Sub-section (10) (a) provides for review of the order made on Revision on the basis of facts that were not there when the Revision was decided. Sub-section (10) (b) empowers the government to make rules prescribing limitation period for Review and the manner in which Review should be preferred. Sub-section is on par with section 152 of Code of Civil Procedure, 1908 and it provides for rectification of mistakes in the order made in Revision. This would include order made in review as well. Rectification can be sought for at any time within five years; before effecting rectification, stakeholders need to be heard. Sub-section (12) provides for discretionary levy of cost while making orders on Revision.
Question of law within the meaning of section 65 - HELD THAT:- It is well settled that a question may be treated as of law even if in Salmondian sense, it is not: when a finding of fact is recorded without evidence or contrary to evidence or founded on inadmissible evidence, ordinarily they are treated as questions of law. It may also arise when, on the basis of evidentiary material on record, no reasonable person in the armchair of the authority would have entered a finding, that has a bearing on the outcome of the proceeding. These are only illustrative.
It is the specific case of Assessees that a finding in the form of answers in the affirmative has been recorded to the above questions without or contrary to evidentiary material; this has been done in disregard of decisions of Apex Court and High Courts. Therefore, it is opined that the preliminary objection as to maintainability of the Revision Petitions is not sustainable.
Whether a set top box is goods u/s 2(15) of the Act - HELD THAT:- A Set Top Box is an appliance between cable outlet and a subscriber’s receiver, cannot be disputed. Regulation 2(z) of the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012 defines “Set Top Box” means a device, which is connected to, or is part of a television and which allows a subscriber to receive in unencrypted and descrambled form subscribed channels through an addressable system - It is not out of place to refer to a Central Government Office Memorandam dated 13.08.2014 which says that STBs fall within the definition of goods for the purpose of Central Sales Tax Act, 1956 and therefore, Form-C facility to be extended to them.
STB is capable of exclusive use by the subscribers or not - HELD THAT:- Regulation 17 obligates every Multi Service Operator like the Assessees herein to provide to the subscribers STBs conforming to standard, set by the Bureau of Indian Standards, with a minimum warranty of one year, unless the subscriber himself has bought one on his own. There is a statutory obligation to repair the STBs within 24 hours of the complaint that too, free of cost. It is admitted before us by both the sides that the STBs are installed in the premises of subscriber only, albeit license to visit the same for service/repair is accorded under the subject agreements. In deciding the question, what are the goods involved in a sale transaction of the kind and with what intent the parties have entered into it, would assume importance. The seller and purchaser, the words being used in their widest amplitude have to be ad idem as to the subject matter of the arrangement. To this to be added, the intent of law also. In finding answers to questions of the kind, the approach of the court should be of a reasonable person of average intelligence.
There being nothing to substantiate pervasive control of the Assessee over the STBs, merely because they have license to gain entry to the premises of the subscriber for periodic inspection/repair.
Consideration for transfer of right to use STB - HELD THAT:- The simple question is whether the transfer of right to use STBs is for consideration or it is free. The Authorities and the Tribunal have held that the consideration for right to use STB is Rs. 2,000/-. That estimate is made inter alia on the basis of a clause in the Inter-connect Agreement that obtained between the Assessees and their local cable operators. A clause in the agreement prescribes Rs. 2,000/- payable by the local operator if STB is damaged or it is not used for the purpose for which it is installed - The authorities having accumulated expertise in the matter have formed a considered opinion that a sum of Rs.2,000/- is the consideration for transferring the right to use the STBs. A Court exercising a limited revisional jurisdiction cannot run a race of opinions with the authorities and Tribunals which have recorded concurrent findings.
Service tax and VAT are mutually exclusive or not - HELD THAT:- There can be levy of more than one tax on a subject matter, if incidence of each of the taxes is different from the other and such taxes may be imposed under different statutes. A tax on the sale of goods is envisaged under Entry 54 of List II (Sales Tax) of Schedule 7 of the Constitution and the taxable event is transfer of goods including fictional sale envisaged under Article 366 (29A). In the case at hand, sales tax is levied under the State Enactment. There the State is not levying tax on service aspect of the transaction, since that exclusively belongs to the domain of the Parliament, which has enacted Finance Act, 1994 - In the case at hand, sales tax is levied under the State Enactment. There the State is not levying tax on service aspect of the transaction, since that exclusively belongs to the domain of the Parliament, which has enacted Finance Act, 1994.
Retrospectivity of Government notification dated 15.03.2021 - HELD THAT:- Sub-section (2) of Sec. 174 has to be read with sub- section (3) of Sec. 164. Added, sub-section (4) of Sec. 174 in a way enacts Sec. 6 of the Mysore General Clauses Act, 1899. In view of this, it cannot be assumed that the tax regime during the transition period between repeal of 2003 Act and enactment of 2017 Act, was ever intended to be left as a vacuum creating a limited/partial tax heaven, in the mere absence of a notification under sub-section (2) of Sec. 174. If legislature intended to make operation of sub- section (1) of Sec. 174 dependent upon a notification to be issued under sub-section (2), the language of the provision would have been much different. An argument to the contrary would offend the tax jurisprudence evolved over centuries, in civilized jurisdictions. Therefore, the vehement submission made on behalf of the Assessees that the notification of 2021 could not have been issued with retrospective effect, pales into insignificance.
Conclusion - i) STBs are goods within the meaning of section 2(15) of the Act, capable of exclusive use by subscribers, and that the right to use them is transferred for valuable consideration. ii) Service tax and VAT are not mutually exclusive. iii) The notification dated 15.03.2021 could have retrospective effect.
Petition dismissed.
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