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Showing 301 to 320 of 1644 Records
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2025 (4) TMI 1344
Denial of interest on seized traveller’s cheques that were seized, encashed, and deposited by the Customs Department - HELD THAT:- The reason for encashing the travellers’ cheque and depositing the same in the Customs Department’s account is not available in the case record, so as to justify disposal of the seized documents in the manner prescribed by the Central Government as contemplated in Section 110(1-A) of the Customs Act since those were not perishable or hazardous in nature and depreciation of their value with the passage of time would not even be a rare probability, as those were Dollars equivalent whose value has been consistently increasing over the years. It is also not understood as to why provisional release of those goods under Section 110-A was not made after obtaining adequate security and bond for the same. Therefore, encashment of those travellers cheque, converting them into Rupees and taking the encashed amount to the Respondent-Department’s account can’t be said to be free from arbitrariness, apart from the fact that those being not confiscated goods by that time, could have been kept in interest bearing account.
In carrying-forward the judicial precedent set on the issue for decades and while going with the observation made in the above referred paragraph in Matta Paints and Hardware Store [2022 (12) TMI 93 - CESTAT NEW DELHI] judgment alongwith observation of the Tribunal that had the amount in question being kept in fixed deposit by the Appellant himself for all these years, it would have earned a handsome amount of interest and therefore, retention of the said interest could be considered as on unjust enrichment on the part of the Respondent-Department as well as deprivation of Appellant’s right to his property, the following order is passed.
Conclusion - The appellant is entitled to interest on the deposited amount from the date of deposit, less redemption fines and penalties, and including interest on the pre-deposited amount, payable within two months.
Appeal allowed.
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2025 (4) TMI 1343
Exemption form Basic Customs Duty under the notification dated 01.03.2005, as amended by the notification dated 17.03.2012 - imported digital still image video cameras - HELD THAT:- All the four Customs Appeals came up for hearing before a Division Bench of the Tribunal in M/S SONY INDIA PRIVATE LTD. [2025 (4) TMI 1247 - CESTAT NEW DELHI]. The impugned order dated 28.10.2016 that was impugned in all the four Customs Appeals was set aside and all the four Customs Appeals were allowed. It was held in the said case that 'The digital still image video cameras involved in the present Customs Appeals would, therefore, be entitled to exemption from basic customs duty in terms of the Notification dated 01.03.2005, as amended on 17.03.2012.'
The order dated 20.03.2018 passed by the Commissioner (Appeals) holding that the ‘digital still image video cameras’ imported by the appellant would not be entitled to basic customs duty exemption under the notification dated 01.03.2005, as amended by the notification dated 17.03.2012 on the basis of the decision rendered by the Tribunal on 19.12.2017 would, therefore, have to be set aside and is set aside.
Conclusion - The appellants are eligible to exemption from BCD under the said Notification 25/2005 CE dated 1.3.2005 as amended.
The appeal is, accordingly, allowed.
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2025 (4) TMI 1342
Money Laundering - seeking an extension of the interim Bail for a period of 60 days on the humanitarian grounds - it is held by High Court that 'two-week extension of interim bail was justified on humanitarian grounds, subject to existing bail conditions.'
HELD THAT:- It is not inclined to interfere with the impugned judgment and order. The Special Leave Petition is, accordingly, dismissed.
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2025 (4) TMI 1341
Refund of the wrongly paid service tax - rejection of claim for refund by applying Section 11B (1) of the Central Excise Act, 1944 - HELD THAT:- A perusal of the above provision shows that it deals with the claims for refund of service tax paid based on the exemptions provided under the Act of 1944. It does not deal with a situation where an assessee has paid the service tax under a mistaken impression of law or without realizing that a particular activity is exempted from service tax. In this regard, it is apposite to refer to the judgment of the Hon'ble Supreme Court in the case of Mafatlal Industries Limited vs. Union of India [1996 (12) TMI 50 - SUPREME COURT], which laid down the parameters for entertaining an application under Section 11B of the Act of 1944.
Conclusion - The limitation prescribed under Section 11B of the Act of 1944 would not strictly apply to a claim for refund of service tax wrongly paid and a writ petition under Article 226 of the Constitution of India is maintainable. In such an event, the principles of restitution as provided under Section 72 of the Contract Act, 1872, is applicable and the respondent No. 3 is bound to refund it notwithstanding the delay in filing the application for refund.
The impugned order is set aside - petition allowed.
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2025 (4) TMI 1340
Classification of services - Tour Operators Service - Short-term accommodation service - activities undertaken by the appellant, a statutory authority managing the Anamalai Tiger Reserve - HELD THAT:- The fact remains that the activities of the appellant are clearly in terms of the provisions of WPA which is the governing Statute insofar as the Appellant-forest department is concerned. There is also a categorical finding that the appellant is charging fees as prescribed by the Government, which is also apparently accepted without there being any specific denial, by the First Appellate Authority or the Revenue in its grounds of appeal before the First Appellate Authority. Hence, the charging of the fees is clearly in terms of the statutory provisions only. There is also a categorical finding as to usage of the fees so collected which is also not disputed by the Revenue or in the impugned order. Thus, we find that the Board’s clarification No.96-supra comes to the rescue of the Appellant.
Conclusion - The appellant being a statutory body is not carrying out any activity of business, to be taxable under ‘Tour operator service’ or under ‘Short term Accommodation Service’. There is also a clear observation in the impugned order insofar as the penalty is concerned that there is a prima facie doubt about the Taxability and that the appellant is a State Government Executive, the same logic would equally apply when it comes to invoking the extended period of limitation is concerned.
Appeal allowed.
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2025 (4) TMI 1339
Invocation of extended period of limitation under the proviso to section 73(1) of the Finance Act, 1994 - only reason for invoking extended period of limitation is that the audit had discovered that the appellant had availed CENVAT credit without first paying its sub-contractor - violation of Rule 4(7) of the CENVAT Credit Rules, 2004 (CCR) by availing CENVAT credit without first making payment for the input services received from its sub-agent.
Extended period of limitation - HELD THAT:- The service tax Returns need to be scrutinized by the Range Officer. Had the Range Officer done so the alleged irregularity in filing CENVAT credit would have been noticed. The fact that the Range Officer had not done his job and the audit had pointed out the discrepancies would only show that the Range officer was negligent in his duty. It does not show that the appellant had suppressed any facts. The Range Officer had the duty to scrutinize the Returns and the power to call for any documents or records for the purpose. What is evident from the records is that the audit had done what the Range Officer should have done. If at all there is any irregular availment of CENVAT credit and the demand was not issued within the normal period of limitation, it is purely on account of the negligence by the Range Officer - the entire demand needs to be set aside on the ground of limitation itself.
Violation of Rule 4(7) of the CENVAT Credit Rules, 2004 (CCR) by availing CENVAT credit without first making payment for the input services received from its sub-agent - HELD THAT:- Rule 4 (7) of CCR only requires the payment to be made before availing the CENVAT credit and it does not indicate that the payment should be made in any particular manner by cheque or through cash or through account adjustments. It is a normal practice when two business have a continuing relationship to maintain a running account with each other and make adjustments instead of paying cash or drawing a cheque every time. Since the show cause notice alleged that the appellant had availed CENVAT credit without actually paying the sub-agent, it was for the show cause notice to have examined the records and establish this fact with evidence. The show cause notice did not establish with any evidence that the appellant had not paid its sub-agent before availing CENVAT Credit.
The appeal needs to be allowed and the impugned order is not sustainable either on merits or on limitation - the impugned order is set aside - appeal allowed.
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2025 (4) TMI 1338
Extended period of limitation - liability to pay service tax under the reverse charge mechanism on the supply of manpower services received from sub-contractors, as per N/N. 30/2012-ST - revenue neutrality - HELD THAT:- Merely because the appellant could have availed CENVAT credit the liability to pay service tax under the reverse charge mechanism does not get extinguished. However, as far as the remedy available to the Revenue to recover service tax not paid or short paid under section 73 of the Finance Act is concerned, it has a limitation of time. The normal period of limitation under section 73 was one year from 1994 up to 28.05.2012. From 28.05.2012 up to 14.05.2016, the limitation was 18 months. From 14.05.2016, the limitation was increased to 30 months. The show cause notice was issued on 28.01.2016 and the limitation was 18 months. The period for which the show cause notice was issued is July, 2012 to December, 2013. The show cause notice was clearly issued beyond 18 months on 28.01.2016.
What is evident from this proviso is that the intent to evade must be established in order to invoke extended period of limitation. This is a revenue neutral case where the appellant had to pay service tax with one hand (if the Revenue’s contention is accepted) but it could have immediately availed CENVAT credit so paid under reverse charge mechanism. Therefore, there can be no intention to evade payment of service tax in this case. Therefore, extended period of limitation could not have been invoked and it was wrongly invoked in the present case. The entire demand, therefore, is clearly barred by limitation and hence the impugned order cannot be sustained.
Conclusion - The intent to evade must be established in order to invoke extended period of limitation. This is a revenue neutral case where the appellant had to pay service tax with one hand but it could have immediately availed CENVAT credit so paid under reverse charge mechanism. Therefore, there can be no intention to evade payment of service tax in this case.
The impugned order is set aside and the appeal is allowed.
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2025 (4) TMI 1337
Classifcation of services - to be classified under Management, Maintenance or Repair Service, Manpower Recruitment and Supply Agency Service, or Erection, Commissioning or Installation Service? - Extended period of limitation.
Classification of service - HELD THAT:- In view of the findings recorded by the Adjudicating Authority and the grounds of appeal taken by the appellant, the Commissioner (Appeals) was required to examine whether the service in question would be covered under the category of “Management, Maintenance or Repair Service’ or not. On the contrary, the learned Commissioner erroneously formulated the question whether the work done of labour supply for ARC street light, maintenance under Work Orders dated 3.8.2005 and 13.02.2007 are covered under the ‘‘Management, Maintenance or Repair or ‘Manpower, Recruitment & Supply Agency’ services. The question formulated and the findings recorded by the Appellate Authority are, therefore, erroneous as the scope of the appeal was limited to classification under ‘‘Management, Maintenance or Repair Service’. The order of the Commissioner (Appeals) set aside to the extent it had classified the services rendered in relation to the Work Orders dated 3.8.2005 and 13.02.2007 within the purview of ‘‘Manpower Recruitment and Supply Agency Service” and remand the issue of classification to be reconsidered.
The Commissioner (Appeals) may also examine the issue of taxability of the services rendered with reference to the Work Orders dated 20.08.2009 and 06.09.2010 with reference to the provisions of the Circular - The appellant is entitled to the benefit of cum-tax duty and the matter is remanded to the Commissioner (Appeals) for quantification of duty element granting the benefit of cum-tax duty.
Extended period of limitation - HELD THAT:- The law on the issue of invocation of extended period of limitation has been settled that something positive other than mere inaction or failure on the part of the assessee is proved. Conscious or deliberate withholding of information by the assessee is necessary to invoke the extended period of limitation. Without multiplying too many decisions, we would refer to the case of Savira Industries versus Commissioner of Central Excise, Chennai–II [2015 (9) TMI 515 - CESTAT CHENNAI], where it was held held that the assessee was under bonafide belief that mere cutting, welding of steel pipes and sheets did not amount to manufacture as no new commodity emerges and there was no marketability and therefore would attract excise duty. In the circumstances, the demand was held to be hit by limitation - the invocation of the extended period in the present case is not justified in the absence of any strong allegation or positive act, pointing towards fraud, collusion, or any wilful mis-statement or suppression of facts with intent to evade payment of duty. In view thereof extended period is not invokable and no penalty is imposable on the appellant.
Conclusion - Appeal remanded to the Commissioner (Appeals) to re-consider the issues as follows:- 1) Whether the services rendered in respect of Work Orders dated 3.8.2005 and 13.02.2007 are classifiable under ““Management, Maintenance or Repair Service’, as defined under Section 65(64) of the Act. 2) Whether the services with respect to Work Order dated 20.08.2009 and 06.09.2010 are classifiable under ‘Erection, Commissioning or Installation Service’ as defined under Section 65(39a) of the Act and whether they are entitled to the benefit under the Circular dated 24.05.2010. 3) Re-quantify the duty element after granting the benefit of cum-tax duty.
Appeal allowed by way of remand.
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2025 (4) TMI 1336
Recovery of Cenvat Credit along with applicable interest and penalty - Input service - admissibility of Credit availed on service tax paid for the design and construction of an RCC water storage tank by M/s KMV Projects Ltd. - HELD THAT:- The input service on which the impugned credit was availed by M/s GMR Hyderabad International Airport Ltd., for construction and works contract services which are covered in the exclusion clause of the input service definition under Rule 2(l) of the Cenvat Credit Rules, 2004. Since both the contracts are composite supplies they fall under exclusion clause of input service definition Rule 2(l) prohibits availment of Cenvat Credit of service tax paid on works contract services when the same are used to construct a building or civil structure or when such services are used to lay down the foundation or making a structure to support capital goods.
Service provided by M/s KMV Projects Ltd., is design and publication of storage tank which is recognised as capital goods under Rule 2(a)A of Cenvat Credit Rules, 2004 and hence they eligible for the credit. Although, storage tank is included in the definition of capital goods, but it is not the case that the appellant party is availing capital goods credit on storage tank - The works contract service itself is an input service and is excluded from the definition of input service vide Rule 2(l) of Cenvat Credit Rules, 2004.
The nature of services provided is not construction of works contract and that M/s Enerpark Energy Pvt Ltd., have charged full rate of service tax and deposited the same under erection, Commissioning and Installation Services. As per the description of services mentioned in the said P.O. as Design, engineering, construction, erection, commissioning and the description clearly mentions works of foundation of main control room, foundation of inverter room, foundation of transformer, structure foundation, completion of internal road, completion of rain water drain etc. The above services are in the nature of construction services/services portion in the execution of works contract, used for construction of civil structure or laying foundation for capital goods, which are specifically covered in the exclusion clause of the input service definition.
The Department’s case is that the Adjudicating Authority had dropped the demand for recovery of irregular Cenvat Credit of Rs. 4,71,885/- on the basis of certificate of Chartered Accountant without proper examination of other documents such as ST-3 returns and Cenvat Credit Ledger. The certificate issued by a Chartered Accountant which only corroborative evidence as held by Hon’ble High Court of Karnataka in Aurangabad Vs Toyota Kirloskar Motors [2009 (12) TMI 529 - KARNATAKA HIGH COURT] which was upheld by the Apex Court in TOYOTA KIRLOSKAR MOTOR PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [2011 (3) TMI 1362 - SUPREME COURT]. In the light of above decision, Commissioner remanded the matter for further examination is just and proper.
Conclusion - The works contract service itself is an input service and is excluded from the definition of input service vide Rule 2(l) of Cenvat Credit Rules, 2004.
The Commissioner (Appeals) passed an order based on law and fact both. Therefore, no any interference requires in the impugned order and appeal is liable to be dismissed - appeal dismissed.
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2025 (4) TMI 1335
Validity of SCN - SCN issued relying on the third party data - SCN failed to quantify the service tax amount paid by the appellant - denial of CENVAT Credit on the ground of not filing Service Tax-3 returns - HELD THAT:- Adjudicating Authority as well as Commissioner of Central Tax (Appeals-I) dis-allowed the Cenvat Credit to the appellant on the ground of not filing Service Tax-3 returns which happens due to change of auditor of the appellant company and inspite of several requests Department not provided login user name and password in time. Due to this reason, the appellant was unable to file returns for reasons beyond their control. In these circumstances, dis-allowance of credit to the appellant is not just proper and legal. The non-filing of returns is not intentional but due to password problem which is beyond the control of the appellant. Therefore, denial of credit to the appellant is not just and proper.
Co-ordinate Bench, Ahmadabad in the case of Sun Outdoos Vs CCE and ST, Vadodara-I [2024 (11) TMI 263 - CESTAT AHMEDABAD] wherein on the issue of benefit of Cenvat Credit on the ground of non-filing of ST-3 returns held that, as regards denial of credit on the ground of non-filing of ST-3 returns, we are of the view that merely on non-filing of ST-3 return, the assessee cannot be deprived of their statutory benefit of Cenvat Credit as provided under the Statute.
Conclusion - Due to technical fault and inspite of repeated letters to Department, not provided in time, user name and password, appellant could not file the ST-3 returns in time. Appellant cannot deny to take credit of Cenvat. Show cause notice was failed to quantify the service tax amount. Adjudicating Authority as well as Commissioner of Central Tax (Appeals-I) not considered appellant’s reply properly.
Appeal allowed.
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2025 (4) TMI 1334
Extended period of limitation - whether SCN was hit by limitation? - Wrongful availment of Cenvat credit as per Rule 6 read with Rule 14 of Cenvat Credit Rules, 2004 - HELD THAT:- Extended period of limitation of upto 5 years could be invoked, if the non-payment of service tax was on account of fraud or collusion or willful mis-statement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of service tax. This limit applies to recovery of Cenvat credit as well.
As per Section 70 of the Finance Act, the assessee is required to self-assess service tax due on the services provided by him and to furnish to the Superintendent of Central Excise a Return in ST-3 format. As per Section 72 of the Finance Act, if the assessee fails to furnish the Return under Section 70 or having made the Return or fails to assess the tax in accordance with the provisions of the Finance Act and Rules made thereunder, the Central Excise Officer may require the assessee to produce such accounts, documents or the evidence as he may deem necessary and after taking into all relevant material “he shall, by an order in writing” carry out the best judgment assessment under Section 72 of the Finance Act - If the officer fails to complete the scrutiny and raise a demand within the period and the demand gets barred by limitation, the responsibility for that rests squarely on the officer who failed in his duty.
Neither the fact that the assessee is operating the self-assessment procedure nor that it had failed to assess the tax liability etc. correctly means that the assessee had committed a fraud or colluded or willfully mis-stated or suppressed any fact or violated any provisions of the Act or Rules with an intent to evade. If any of these factors are alleged they should be established in the SCN and in the order.
All that is evident from the SCN and from the order is that the assessee furnished it’s returns on time as required and it is the officer who failed to scrutinize the returns in time and took too long to scrutinize the returns pertaining to 2004-2005 to 2007-2008 much beyond the period of limitation. Therefore, if there is any loss of revenue on this count, the responsibility for that rests clearly on the officer who failed to scrutinize the returns in time and raise a demand. It does not rest on the appellant/assessee.
Conclusion - The entire demand is hit by limitation and on this ground alone, it needs to be set aside. It is not necessary for us to examine the merits of the case.
The impugned order is set aside - the appeal is allowed.
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2025 (4) TMI 1333
Scope of exception by virtue of the degree issued by the University of Bradford, U.K. which was also recognized by the Association of Indian Universities and IGNOU - fees collected by the respondent for conducting courses leading to degrees awarded by a foreign university, recognized by the Association of Indian Universities and Indira Gandhi National Open University - Commercial Training or Coaching Services or not - demands for the entire period from 01.09.2009 to 31.03.2016 - HELD THAT:- W.e.f. 01.07.2012 services by way of education as a part of curriculum for obtaining the qualification recognized by any law for the time being in force” has been put in the negative list under Section 66D (1) (ii). This is same as the exclusion from the definition of “Commercial Training or Coaching Centre” prior to 01.07.2012. Therefore, we find there is no effective change in the law. Before 01.07.2012 the services were excluded from the definition of “Commercial Training and Coaching Centre”. After 01.07.2012, they have been excluded by being part of the negative list. On the facts of the case, it is un-disputed that the degree was being issued by the University of Bradford, U.K. It is also stated in the appeal itself that this degree is also recognized by the Association of India Universities and also by the Indira Gandhi National Open University.
The Commissioner has correctly followed decision of this Tribunal dated 01.11.2017 which has also attained finality as Revenue did not file any appeal against it. The Commissioner was correct in dropping the demand and the Committee of Chief Commissioners erred in finding the order not legal and proper.
Conclusion - The respondent's services are not liable to service tax for the entire period covered by the show cause notices, both before and after 01.07.2012.
Appeal dismissed.
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2025 (4) TMI 1332
Levy of service tax - inclusion of value of banker/fuel and water delivered, while supplying the vessel by the appellants to their charterers, in determining the assessable value for discharging service tax under Supply of Tangible Goods for Use (STGU) service - period covered in the SCN is from October, 2009 to September, 2014 - HELD THAT:- The service tax is liable to be paid in respect of taxable services provided by one person i.e., service provider to the other person i.e., service receiver. It is not in dispute that the appellants-vessel owner is the service provider and their customer-charterers are the service receiver, in respect of the taxable service. Further, it also transpires that for the period relating to the pre-negative list regime i.e., prior to 1-7-2012, the taxability of service tax was determined in terms of coverage of an activity under the service tax net by defining taxable services under section 65(105) ibid, which enumerated each of the specified services. For the period post-negative list regime, the category of services hitherto defined under the erstwhile regime were merged under a common phrase i.e., 'service' as defined under section 65B(44) ibid, which was brought into effect from 1-7-2012. The relevant entry of the specific taxable service in the present case is 65(105)(zzzzj) ibid. Subsequent to introduction of Negative list regime from 01.07.2022, the services that are subject to levy of service tax have been explained in Section 66B ibid.
In the agreement entered into by the appellants, it clearly states that the services provided are for hiring of the vessel for carrying petroleum products by the vessel, and such services shall start from the time of delivery of the vessel. It is also brought out clearly in the above agreement that the charterer pays for the fuel, water during the period of hiring of the vessel and the charges paid for the services of hiring of vessel include these. Since the vessel has to be moved to the place of delivery as agreed between the parties, after its last charter period is completed, the cost of fuel/bunker contained therein and water during the period of making the vessel ready for delivery for starting of service is required to be incurred by the appellants, which is separately reimbursed by charterers at actuals.
It is clearly brought out that such activity of delivering the vessel is not part of the services, and therefore the fuel/bunker and water charges, incurred by the appellants, prior to the delivery of the vessel, in no case would become part of the services agreed upon between the parties. Therefore, the value of the bunker/fuel and water, which do not form part of the taxable services cannot be added to the taxable value of the services.
The issue involved in this appeal was decided in an identical facts of the case by the Co-ordinate Bench of the Tribunal in the case of Express Engineers & Spares Private Limited [2022 (1) TMI 564 - CESTAT ALLAHABAD] by holding that supply of goods to customers would not amount to STGU for the period prior to 30.06.2012, or a declared service from 01.07.2012 to attract levy of service tax.
It is not in dispute that the appellants have paid VAT on the bunker/fuel and there is no VAT on water. As these goods are supplied during the process of delivery of the vessel to the charterers, distinct from the fuel and water supplied during the charter period, such supply of the goods for enabling the delivery of the vessel cannot be brought under the purview of the service contract entered into between the appellants and their customers-charterers. Therefore, on the facts and circumstances of the present case, these cannot be brought under the scope of the supply of STGU services by the appellants.
Conclusion - The reimbursement of bunker/fuel and water charges, which constitute supply of goods with payment of VAT, cannot be included in the taxable value of service under STGU service.
Appeal allowed.
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2025 (4) TMI 1331
Taxability - reimbursement received by the appellants from the automobile manufacturer towards the cost of spare parts used in 'free services' - sale of goods or service - HELD THAT:- It is an admitted fact on record that on the value of the parts used for replacement by the authorized service station, VAT was paid by the appellants, considering the same as ‘sale of goods’ and the liability for service tax on the labor component was also discharged by the appellants, treating the same as service. Since, the spare parts used for replacement in the authorized service station was considered as a sale transaction and appropriate VAT amount was paid by the appellants, the said transaction cannot be considered as provision of taxable service, for the purpose of levy of service tax thereon.
The appellants in the present case, had availed cenvat credit of service tax paid on the Mandap Keeper service, which were utilized by them for making of temporary shed for providing uninterrupted servicing of vehicles during the rainy season. Since, the said disputed service was used for provision of the output service, it cannot be said that such service is not confirming to the definition of input service, for the purpose of taking of cenvat credit thereon. In an identical situation, the Tribunal in the case Endurance Technologies Pvt. Ltd. V/s. Commr. of C.Ex., Aurangabad [2013 (8) TMI 601 - CESTAT MUMBAI] has allowed the cenvat credit taken on the Mandap Keeper service.
Conclusion - i) The appellants are not liable to pay service tax on the reimbursement received for spare parts from the manufacturer. ii) The appellants are entitled to cenvat credit on the Mandap Keeper service utilized for their output service.
There are no merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands on the appellants - appeal allowed.
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2025 (4) TMI 1330
Non-payment of service tax on multi service activities income and on other income - business auxiliary services - period July, 2003 to September, 2004 - facts and documents not considered properly - violation of principles of natural justice - HELD THAT:- On reading of clause (iv) in the definition of Business Auxiliary Service, it transpires that ‘any incidental or auxiliary support service’ mentioned therein in relation to clauses (i) to (iii) alone can be considered for the purpose of inclusion in the definition of BAS inasmuch as the said definition uses the expression ‘means’ and ‘includes’, thereby providing comprehensive meaning that only those services which are incidental or auxiliary to the services categorized at (i) to (iii), would only qualify for consideration. The detailed activities undertaken by the appellants are mentioned at paragraph 9 in the impugned order. On careful examination of such activities performed by the appellants, we find that the same cannot considered as incidental or ancillary to the services itemized at clauses (i) to (iii) in the definition provided under Section 65(19) ibid. However, the case of the appellants falls under the amended definition of BAS w.e.f. 10.09.2004. In view of the fact that the activities undertaken by the appellants upto the period 09.09.2004 were not covered under the definition of BAS, the appellants were not liable to pay any service tax under such taxable category.
Further, the appellants’ submission that they had paid the service tax for the period post 10.09.2004 on multi services activities and on the miscellaneous income, were also not considered in their proper perspective inasmuch as the benefit of tax amount already paid to the government has not been considered in the impugned order.
Conclusion - The learned adjudicating authority has confirmed the entire demand, proposed for recovery in the SCN dated 21.04.2009, without proper appreciation of the statutory provisions vis-`a-vis the activities undertaken by the appellants.
The matter should be remanded to the learned adjudicating authority for passing of de novo adjudication order, in quantifying actual tax liability, which was required to be paid by the appellants - Appeal allowed by way of remand.
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2025 (4) TMI 1329
Invocation of extended period of limitation - non-payment of service tax on Manpower Recruitment & Supply Agency Service during the period from 16.06.2005 to 31.01.2007 - HELD THAT:- There is no allegation against the appellant that he had collected service tax from the service recipient and had retained it without payment to the Govt. Exchequer. On the contrary, the appellant who had admitted his ignorance regarding the levy of service tax on his activities has upon being informed by the audit, endeavored to discharge the liability and had also discharged the same along with applicable interest well before issuance of the show cause notice. It is seen that the show cause notice, while making an allegation that the assessee had indulged in the contraventions of failure to assess the tax due, furnish ST-3 returns and pay the tax due “with willful intention to evade payment of duty” has not provided any evidence of any positive act done by the appellant with deliberate intention to evade payment of duty, thereby rendering the invoking of extended period of limitation untenable.
It is settled law that a mere mechanical reproduction of the language of the proviso to Section 73(1) of the Finance Act, 1994 does not per se justify invocation of the extended period of limitation. A mere ipse dixit that the noticee wilfully suppressed the material facts with intent to evade payment of service tax is not sufficient and the burden to let in evidence of malafide rests heavily on the Department when it makes allegations of malafide.
Conclusion - i) Extended limitation under Section 73(1) cannot be invoked without concrete evidence of willful suppression or fraud. ii) Payment of service tax and interest before issuance of show cause notice precludes issuance of such notice under Section 73(3). iii) Penalties under Sections 77 and 78 are not justified in cases of bona fide ignorance and voluntary compliance upon detection.
Appeal disposed off.
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2025 (4) TMI 1328
Condonation of delay of 149 days in filing the appeal before the Appellate Tribunal - sufficient cause for delay or not - delay is because the order was not delivered to the appellant - HELD THAT:- The order was delivered to the consultant due to which there was delay in appeal. This submission states that the appeal was filed by Chartered Accountant Shri Akshay Jain, Partner of Shri Subhash Chand Jain, Anurag and Associates before the Commissioner (Appeals). It further states that from the acknowledgement given by the appellant it is clear that for delivery of the order, the consultant was called who, after getting the written acknowledgement from the appellant received the order on 30.06.2023 had not informed the appellant. It is untenable for the appellant to give an acknowledgement on her letterhead under her signature (even if it was delivered through her consultant) and then claiming to be not aware that the order was received – especially considering that she had pursued her remedy before the Commissioner (Appeals). According to the impugned order, Shri Subhash Jain (not Shri Akshay Jain) had represented the appellant before the Commissioner (Appeals).
The show cause notice was not served on the appellant. It is not found how the show cause notice is relevant and its absence had caused the delay in filing the appeal before this Tribunal when the appellant had filed an appeal before Commissioner (Appeals) and had received and acknowledged the impugned order.
The appellant paid the demand of tax with interest now under the new GST law. This submission has no relevance to the delay in filing the appeal - The appellant has a good case on merits. The merits of the case are irrelevant for deciding about the delay in filing the appeal.
Conclusion - The appellant had not provided sufficient justification for the delay in filing this appeal. Both the applications for condonation of delay are rejected.
Appeal dismissed.
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2025 (4) TMI 1327
Denial of benefit of abatement provided under N/N. 32/2004-S.T. dated 03.12.2004 - 75% abatement of freight paid to GTA under N/N. 32/2004-S.T. dated 03.12.2004 is available only to the GTA or to the appellant which has discharged the Service Tax under reverse charge mechanism under Rule 2(1)(d)(v) of the Service Tax Rules, 1994 - extended period of limitation - HELD THAT:- The said issue has been examined by the Tribunal in the case of Sandoz P. Ltd. v. Commissioner of C.Ex., Raigad [2014 (6) TMI 347 - CESTAT MUMBAI] where it was held that 'We observe that in this case appellant availed goods transport agency service and paid the Service Tax as per the Service Tax Rules, 1994 as service recipient. Although there is no endorsement on the consignment that the transporter has not availed Cenvat credit but it is implied that when the transporter has not paid any Service Tax, question of availment of input/input Service Tax credit does not arise. In view of these observations, we do not find any merit in the impugned order. Therefore, impugned order is set aside and the appeal is allowed with consequential relief, if any.'
Also, C.B.E.C. vide M.F. (D.R.) 37B Order No. 5/1/2007-S.T. dated 12.03.2007 has clarified that such abatement is available not only to the GT, but “any person who is made liable to pay Service Tax” on GTA services.
The appellant is entitled to 75% of abatement on freight paid to GTA under Notification No. 32/2004-S.T. dated 03.12.2004.
Extended period of limitation - HELD THAT:- It is also observed that the appellant had availed the abatement during the period from February 2005 to February 2006 while the Show Cause Notice was issued on 30.03.2010, which is beyond the normal period of limitation. There is also no evidence on record to indicate suppression of facts on the part of the appellant. In these circumstances, whole of the demand is barred by limitation. Thus, on the ground of limitation also, the impugned demand is not sustainable.
Conclusion - i) The appellant is entitled to the 75% abatement on freight paid to GTA under Notification No. 32/2004-S.T. dated 03.12.2004, despite paying service tax under reverse charge. ii) There is also no evidence on record to indicate suppression of facts on the part of the appellant. In these circumstances, whole of the demand is barred by limitation.
Appeal allowed.
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2025 (4) TMI 1326
Levy of service tax - inter-division unit transfer and Inter Factory Demand (IFD) charges paid by one division of a company to another division within the same legal entity for use of infrastructure facilities - CENVAT credit - liability to pay 5% of the value of exempted goods as per Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - non-maintenance of separate accounts for taxable and exempted services.
Levy of service tax - inter-division unit transfer and Inter Factory Demand (IFD) charges paid by one division of a company to another division within the same legal entity for use of infrastructure facilities - HELD THAT:- It is observed that Helicopter division and the other units of the Appellant who paid IFD charges for use of infrastructure are from same legal entity. Thus, we observe that services provided by helicopter division to other units of HAL amounts to self-service and service tax is not applicable on the services provided to self. Therefore, the demand of service tax confirmed in the impugned order on the IFD charges received by one division of HAL from another division of HAL is not sustainable and hence we set aside the same.
Demand of payment of 5% of the value of exempted goods - HELD THAT:- The Appellant has availed Cenvat credit on input services exclusively used in providing taxable service (i.e. Management, Maintenance or Repaid Services) and no credit has been availed relating to exempted goods. It is observed that the Appellant has maintained separate records for availing Cenvat credit for provision of taxable services. There is no contrary finding available on record. Thus, the Appellant have satisfied the condition of maintenance of separate records as required under Rule 6 of CCR, 2004. Therefore, the Appellant is not required to pay any amount at rate of 5% on exempted goods under Rule 6(3)(i). Accordingly, the demand confirmed on this count in the impugned order is not sustainable, and hence the same is set aside.
Demand of interest and penalties - HELD THAT:- Since, the demands confirmed in the impugned order are not sustained, the question of demanding interest and imposing penalties does not arise - the entire demand is made on the basis of documents shared by the Appellant/ PSU, and therefore, there is no suppression with an intent to evade payment of tax established in this case. Accordingly, no penalty imposable under section 78 of the Finance Act, 1994 and hence the same is set aside.
Conclusion - i) Helicopter division and the other units of the Appellant who paid IFD charges for use of infrastructure are part of same legal entity. Thus, services provided by helicopter division to other units of HAL amounts to self-service and Service Tax is not applicable. ii) The Appellant has satisfied the condition of maintenance of separate records as required under Rule 6 of CCR, 2004. Therefore, the Appellant is not required to pay any amount at rate of 5% on exempted goods under Rule 6(3)(i). iii) There is no suppression with an intent to evade payment of tax established in this case. Accordingly, no penalty is imposable under section 78.
Appeal allowed.
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2025 (4) TMI 1325
Failure to pay Service Tax - contravention of provisions of Section 88(1) of the Finance Act, 1994 - Commercial Training of Coaching service - levy of penalty u/s 78 of FA - invocation of Extended period of limitation - HELD THAT:- If the assessee can show that the service tax could not be paid due to their bonafide mistake in time by invoking Section 80 of the Finance Act,1994, the penalty can be waived. In this case, the respondent has showed their bonafide that they did not receive the payment from the clients for providing services and that is why, they could not pay the service tax in time. In that circumstances, it is observed from the audited balance sheet as well as in the books of accounts that income figures under sales of M/s Royal for amounting to Rs.1,38,67,081/- has been included while calculating the taxable value of service tax, if investigated properly, it should not have been included.
Further, the report from Hyderabad Service Tax Division, confirmed payment of service tax by the Sub-contractor and the respondent discharged the said duty against their bills raised by M/s Tera Software Limited. It was also found that M/s Swathy Smart Cards Hi-Tech (P) Limited also paid service tax of Rs.6,07,939/- on work order received directly from the respondent and the respondent has also discharged the service tax.
The adjudicating authority has rightly invoked the provisions of Section 80 of the Finance Act, 1994 and refrained from imposing any penalty under Section 78 of the Act. There are no infirmity in the impugned order by dropping penalty under Section 78 of the Finance Act, 1994.
There are no merit in the appeal filed by the Revenue, the same is dismissed.
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