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Showing 161 to 180 of 433035 Records
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2025 (6) TMI 193
Money Laundering - proceeds of crime - challenge to Provisional Attachment Order - Syndicate Bank scam - Section 50(2) & (3) of PMLA, 2002 r.w.s. 193 and 228 of IPC - HELD THAT:- In the light of the settlement, the appellant, Shri Vikas Jain along with his family member and his entities transferred the shares of M/s G.S. Build Estate Pvt. Ltd. to Shri Pavitra Kothari and received due amount of Rs. 2.82 Crores through the banking channel towards consideration but has been attached taking it to be the proceeds of crime because payment of consideration by Shri Pavitra Kothari is said to be out of the proceeds of crime obtained from Syndicate Bank scam. The Provisional Attachment Order of the property against alleged proceeds of crime of Rs. 2.84 crores is in ignorance of the fact that appellant was entitled for receipt of money on transfer of shares to Shri Pavitra Kothari, who obtained the shares of the company in his favour and once shares were transferred to him in lieu of payment, what could have been attached by the respondent is to be the shares of M/s Build Estate Pvt. Ltd. received by Shri Pavitra Kothari treating it to be the proceeds of crime, if the proceeds of crime was involved.
The amount was received through the banking channel and has been accounted with disclosure of the source but ignored by the respondent. The Counsel for the respondent failed to clarify the aforesaid position, rather, contested the appeal in reference to the proceeds of crime of Rs. 11 crores in the hands of the appellant, Shri Vikas Jain.
The respondents have failed to examine the matter in right perspective while attaching the properties against the proceeds of crime of Rs. 2.84 crores. The facts narrated by us reveal the source for receipt of the amount aforesaid through banking channel on transfer of shares of M/s G.S. Build Estate Pvt. Ltd. Thus, interference is caused in the order of the Provisional Attachment Order of the properties against Rs. 2.84 Crores and accordingly the impugned orders to that extent are set-aside.
So far as the proceeds of crime of Rs. 11 crores is concerned, the Counsel for the appellant prayed for equitable order whereby he would seek release of properties against the alleged proceeds of crime of Rs. 11 crores subject to final outcome of the trial but till then status quo in reference to the possession of the properties be maintained - The parties would maintain status quo in regard to the possession as is existing today. The appellant would otherwise not alienate or transfer the property till conclusion of the trial. The release of the property would remain subject to the final outcome of the Trial.
Conclusion - The Provisional Attachment Order of the property against alleged proceeds of crime of Rs. 2.84 crores is in ignorance of the fact that appellant was entitled for receipt of money on transfer of shares to Shri Pavitra Kothari.
Appeal disposed off.
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2025 (6) TMI 192
Money Laundering - non-existence of predicate offence - conspiracy for transportation of coal - admissible statements or not - non-compliance of Section 8(1) of the PMLA 2002 - HELD THAT:- The facts available on record shows that the offence under Section 384 IPC was added by the Karnataka State police for which ultimately cognizance of offence was not taken by the ACJM Court but then an order was passed to transfer the offence under Section 384 IPC to Chhattisgarh State Police and thereupon FIR was registered by Chhattisgarh State Police not only for the offence referred in the FIR registered by the Karnataka State Police but even the predicate offence under the Prevention of Corruption Act, 1988 and the offence under Section 420 IPC. Therefore, the case is not made out to hold that no predicate offence was disclosed in the FIR, rather what is relevant is existence of predicate offence at the time of recording of ECIR which was existing in this case on the addition of the offence under Section 384 by the Karnataka State Police and the ECIR was recorded before the order by ACJM Court, Bangaluru and thereupon with the State Police of Chhattisgarh.
There are no substance even in the last argument raised by the appellant - Appeal accordingly fails and is dismissed.
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2025 (6) TMI 191
Levy of service tax under Reverse Charge Mechanism - commission paid to the foreign agents and the rent paid to the Director of the company - entire exercise is revenue neutral in view of availability of Cenvat credit - Rent paid on godowns to the Director of the Company - invocation of extended period of limitation.
Levy of service tax under Reverse Charge Mechanism - commission paid to the foreign agents and the rent paid to the Director of the company - entire exercise is revenue neutral in view of availability of Cenvat credit - HELD THAT:- The issues raised are no more res integra and has been decided by this Tribunal and also by the Apex Court. Reliance placed by the learned counsel on the decision in Texyard International Vs. CCE [2015 (8) TMI 794 - CESTAT CHENNAI], where the issue related to the demand of service tax under reverse charge on the commission paid to the Overseas agents for export of finished goods. The Tribunal took the view that the service tax, if any, payable under reverse charge is permissible to be availed as Cenvat credit and that may be refundable under Notification No.41/2007. Further, relying on the decision in CCE Vs. Coca Cola India Pvt. Ltd. [2007 (4) TMI 17 - SUPREME COURT], where the Apex Court accepted the submission of the learned counsel for the assessee that the consequences of payment of excise duty after availing Modvat credit was revenue neutral, the demand of service tax under reverse charge was set aside on the principle of revenue neutrality.
In view of the consistent stand taken by the Tribunal, it is found that the demand of service tax on the amount of commission paid to the foreign agents for booking of export orders is not maintainable on the principle of revenue neutrality as in the event of charging service tax, the appellant would be entitled to Cenvat credit. Therefore, the demand on this account is not maintainable.
Rent paid on godowns to the Director of the Company - HELD THAT:- The Tribunal in the case of Cords Cable Industries Ltd. Vs. CCE, Jaipur [2023 (4) TMI 441 - CESTAT NEW DELHI] have decided the said issue in favour of the appellants observing that the Directors provided the service of renting of immovable property in their individual capacity as owners of the premises and not as the Directors of the appellant. Hence in such a situation, it was held that the appellant could not have asked to pay service tax on reverse charge mechanism - no service tax is leviable on the rental amount paid to the Director of the Company, as the same was paid to him in his individual capacity as the owner of the godown. The demand on this account is accordingly set aside.
Extended period of limitation - HELD THAT:- Since the issue decided on merits in favour of the appellant with regard to the demand of service tax on both the counts, it is not necessary to go into the issue of limitation for invoking the extended period, although this Tribunal has held that in case of revenue neutrality, the extended period of limitation cannot be invoked.
There are no merits in the impugned order and hence, the same is hereby set aside - appeal allowed.
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2025 (6) TMI 190
Irregular availment of CENVAT Credit - CENVAT Credit was availed on documents which were not raised against them and credit was availed on the basis of documentation which appeared to have no mention of Service Tax - HELD THAT:- In this case, the disputed period is from 2004-05 to 2008-09 and the impugned Show Cause Notice was issued, by invoking the extended period of limitation, on 11.04.2012, on the basis of audit conducted on 18.04.2011. The appellant has already reversed the CENVAT Credit of Rs.26,94,123/- and agreed before the ld. adjudicating authority that the demand may be limited to that amount. It is observed that the said amount has been paid by the appellant, along with interest, and paid a penalty of Rs.8,65,439/-. Therefore, such payment made by the appellant is sufficient to meet the ends of justice in a case where the admitted demand has been paid by the appellant along with interest and 25% of penalty on that.
Conclusion - The admitted portion of the demand, which has already been paid by the appellant, is upheld, which is sufficient to meet the ends of justice - rest of the demand set aside.
Appeal disposed off.
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2025 (6) TMI 189
Levy of service tax under the category of “renting of immovable property” service - Rents collected from shops by the Municipal Corporation through their circles - Rents collected from shops of / by Patna Regional Development Authority - Payment received from lease - Payment received from Licence Fee of Mobile Towers - Payment received from any other type of Rent and Licence Fee - Payment received as rent from Bus Terminal [ISBT (Inter State Bus Terminal) daily collection] - levy of late fees.
Rent collected from shops / stalls during the impugned period - HELD THAT:- The appellant has accepted this demand and it is not being contested in this appeal. Therefore, the appellant is liable to pay the above demand of Service Tax, along with interest, if not already paid. However, it is observed that the appellant has not suppressed any information from the department and hence intention to evade payment of Service Tax cannot be attributed to the appellant. For this reason, no penalty is imposable on the appellant in respect of this demand confirmed and upheld along with interest.
Rent collected from Guest Houses / shops and Space / Kiosks / Stalls / Grounds / Telephone Booths of Patna Regional Development Authority (PRDA) (presently merged with PMC) - HELD THAT:- The appellant has accepted their service tax liability on this count. Hence, the above demand of Service Tax, along with interest is upheld, and the same is liable to be paid, if not paid already. However, since there is no intention on the part of the appellant to evade payment of Service Tax, no penalty is imposable on this count.
Demand has been raised on the amounts received by the appellant in connection with leasing of shops, which stands squarely covered under the definition of “renting of immovable property” service - HELD THAT:- The definition of “renting of immovable property” service reproduced above, it is observed that 'leasing' of immovable property has been specifically covered in the definition. Accordingly, the demand of Service Tax in this regard is upheld and it is held that the same is payable by the appellant, along with interest. However, there are no reason to impose penalties in respect of this demand confirmed as there is no intention to evade payment of Service Tax established on the part of the appellant on this count.
Licensing Fee from mobile towers received - HELD THAT:- These are in the nature of granting permission to the companies to erect and maintain their mobile towers. Such payments for acquiring the permission cannot be considered as 'rent' to fall within the definition of 'renting of immovable property' service as defined under Section 65(105)(zzzz) of the Finance Act, 1994.
Amount received from Bus Terminal [ISBT (Inter State Bus Terminal)] - HELD THAT:- On examination of the nature of the service rendered in this regard, it is opined that the said activity does not fall within the definition of ‘renting of immovable property’ as it is meant for parking of the buses overnight, as has been pointed out by the appellant. Consequently, there is no liability to Service Tax on the said charges collected by the appellant under the category of 'renting of immovable property service'. Accordingly, the demand of Service Tax confirmed in this regard is not sustainable and hence the same is set aside.
Levy of penalties - HELD THAT:- The demands have been raised only on the basis of the documents maintained and furnished by the appellant. It is observed that the appellant has not suppressed any information and had no intention to evade payment of Service Tax. Accordingly, the penalties imposed on the appellant under Sections 78, 77(1)(a) and 77(1)(c) of the Finance Act, 1994 are not sustainable and hence the same are set aside.
Levy of late fees - HELD THAT:- There were delays in filing the Returns by the appellant and hence we do not interfere with the late fee imposed under Section 70 of the Finance Act, 1994 read with Rule 7(c) of the Service Tax Rules, 1994 for failure to furnish their Returns in time. The same is therefore sustained.
Conclusion - i) The demand of Rs.5,92,679/- on rent collected from shops / stalls is upheld, along with interest. However, no penalty is imposable in this regard. ii) The demand of Rs.1,96,800/- on rent received from Guest Houses / shops and Space / Kiosks / Stalls / Grounds / Telephone Booths of Patna Regional Development Authority (PRDA) is upheld, along with interest. However, no penalty is imposable in this regard. iii) The demand of Rs.56,90,044/- in respect of instalments of lease amount of shops is upheld, along with interest. However, no penalty is imposable in this regard. iv) The demand of Rs.35,29,439/- on Licensing Fee collected for granting permission to erect and maintain the mobile towers set aside. v) The demand of Rs.3,17,141/- is set aside. vi) The demand of Rs.47,11,279/- confirmed on the amount received for parking the buses at the Bus Terminal [ ISBT ( Inter State Bus Terminal )] set aside. vii) The penalties imposed on the appellant under Section 78, 77(1)(a) and 77(1)(c) of the Finance Act, 1994 are set aside. viii) The imposition of late fee under Section 70 of the Finance Act, 1994 read with Rule 7(c) of the Service Tax Rules, 1994 is upheld.
Appeal disposed off.
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2025 (6) TMI 188
Rejection of refund claim filed by the appellant under section 11B of the Central Excise Act, 1944 - rejection of refund on the ground of unjust enrichment - only reason assigned by the Commissioner (Appeals) for holding that the appellant was not entitled to refund of service tax already paid by it is that the appellant was required to pay service tax with effect from 01.07.2012 in view of the provisions of the Finance Act - HELD THAT:- In view of the aforesaid Judgment of the Supreme Court in Calcutta Club [2019 (10) TMI 160 - SUPREME COURT] that deals with the legal position as it existed prior to 01.07.2012 and as it exists w.e.f. 01.07.2012, the finding recorded by the Commissioner (Appeals) that the appellant would be liable to pay service tax on the services rendered by a club to its members w.e.f. 01.07.2012 is not correct. Similarly, reliance placed by the Commissioner (Appeals) on the decisions rendered by the Authority for Advanced Ruling in Emerald Leisures Ltd. [2015 (10) TMI 297 - AUTHORITY FOR ADVANCE RULINGS] and Avadh Infratech Ltd. [2016 (9) TMI 145 - AUTHORITY FOR ADVANCE RULINGS] is mis-placed.
Though the Commissioner (Appeals) has not dealt with issue of unjust enrichment, but the Assistant Commissioner also introduced the theory of unjust enrichment, though without recording reasons.
In Karnavati Club Ltd. vs. Commissioner of Service Tax, Ahmedabad [2013 (5) TMI 752 - CESTAT AHMEDABAD], the Tribunal examined whether the claim of unjust enrichment can be raised against a club when it provide services to its members. It was held that the principle of unjust enrichment would not be applicable.
Conclusion - The Tribunal set aside the impugned order dismissing the refund claim and allowed the appeal.
Appeal allowed.
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2025 (6) TMI 187
Classification of services - Construction of Residential Complex Service or not - construction activities undertaken by the appellant in the form of residential complexes - HELD THAT:- The Show Cause Notice accepts the fact that consideration includes value of land and registration charges. Therefore, the notice hold that duty is payable on 33% of the gross value for consideration.
On going through the Show Cause Notice, it is clear that the agreement / the work undertaken involves sale of goods also and the consideration is not vivisectable. Therefore, the activity falls under works contract service which has come into effect from 1.6.2007. Ld. Authorized Representative submits that the very presence of common area makes the service of construction liable to service tax under ‘Construction of Residential Complexes’. It is found that this logic is not acceptable for the reason that even if the plan for complexes shows presence of common areas / common utilities, it will not take away the composite nature of the service. Merely because the description of the services tallies with the definition given under residential complex service, the same cannot be held to fall under ‘Construction of Residential Complex Service’. What is required to be seen is whether or not total consideration is a non-vivisectable for a composite contract. The answer is ‘yes’ because the Show Cause Notice also could not identify the amount of consideration for the pure service and thus holds that they are eligible for abatement covered in terms of Notification No. 18/2005-ST dated 7.6.2005.
As the issue involves, interpretation of legal provisions, extended period cannot be invoked.
Conclusion - The demand of service tax under 'Construction of Residential Complex Service' is unsustainable. The contract fell within the ambit of 'Works Contract Service' and the demand under the impugned category is set aside.
The impugned order cannot be sustained and therefore set aside - Appeal allowed.
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2025 (6) TMI 186
Invocation of extended period of limitation - insurance income - business auxiliary services or not - Income from Transportation - Income from weigh bridge - Amounts received on account of delayed payments - penalties.
Insurance income - business auxiliary services or not - HELD THAT:- The same amount collected by the appellant (as representing transit insurance) cannot be charged to central excise duty by including this amount in the assessable value and again be treated as a service to charge service tax on it. The demand of service tax on this amount cannot be sustained.
Income from Transportation - HELD THAT:- The same activity of transportation cannot be treated as GTA service to charge service tax under reverse charge and also as BAS to charge service tax on forward charge basis. Since the appellant had paid service tax under reverse charge under GTA, no service tax on transportation can be charged treating it as BAS (upto 1.7.2012) and as service (after 1.7.2012). The demand on this count cannot be sustained.
Income from weigh bridge - HELD THAT:- The learned counsel for the appellant agreed upon that providing a weigh bridge does not amount to providing Business support service as held in Shivam Marine [2024 (10) TMI 1258 - CESTAT AHMEDABAD]. The demand on this count cannot be sustained.
Amounts received on account of delayed payments - HELD THAT:- After 1.7.2012, certain services were named ‘Declared Services’ under section 66E of the Finance Act. These are certainly to be treated as taxable services and service tax has to be collected. Clause (e) of this section includes ‘an agreement to refrain from an act or to tolerate an act’. It has been held by this Tribunal in a catena of orders that this clause would apply only if there is an agreement to tolerate an act, i.e., if the purpose of the agreement was to tolerate an act. If the purpose of the agreement is not tolerate an act but any amount is paid as compensation for default (such as delayed payments in this case), such amounts cannot be called as amounts collected to tolerate an act under section 66E (e) of the Finance Act. Therefore, the demand on this count also cannot be sustained.
Penalties - HELD THAT:- The entire demand of service tax in the OIO upheld by the impugned order deserves to be set aside. Consequently, the demand of service tax and the imposition of penalties also need to be set aside.
Conclusion - i) The demand of service tax on insurance income was not sustainable. ii) The demand of service tax on transportation income was unsustainable. iii) The service tax demand on weigh bridge income was not sustainable. iv) The demand of service tax on delayed payment charges was unsustainable. v) The extended period of limitation and penalties imposed were set aside along with the service tax demand.
The impugned order is set aside - Appeal allowed.
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2025 (6) TMI 185
Recovery of service tax with interest and penalty - GTA service using a sub-contractor or not - demand of service tax on the profit which the appellant had earned by charging its client more and paying its sub-contractor less under the head ‘business auxiliary service’ - extended period of limitation - interest - penalties.
HELD THAT:- What is undisputed is the nature of the service for which the appellant received consideration from its client and also the nature of the service which the appellant had received from Shri Bhupesh Kumar Agarwal. Both are essentially the same. The appellant earned a profit by paying Bhupesh Kumar Agarwal less and charging Jakodia Minerals more.
Goods were transported to the premises of Jakodia Minerals by the appellant engaging Bhupesh Kumar Agarwal as its sub-contractor for the purpose. The appellant treated this activity as GTA service by the appellant and as the recipient of the services of Bhupesh Kumar Agarwal, it paid service tax under reverse charge. It needs to be remembered that GTA services were chargeable to service tax under reverse charge both before 1.7.2012 and after this date. The service recipient had to pay service tax.
The period in dispute covers both before and after 1.7.2012. Service tax is not a tax on profit or income or any amount received. What is important is to see if any service was rendered and if so what was the consideration for the service. The nature of the service can be seen from the contract between the parties (be it written or oral or formal and informal). The activity or service provided in this case was GTA and it is undisputed that it chargeable to service tax under reverse charge and the service recipient has to pay the service tax. It is the same activity which the appellant had received from its sub-contractor and provided to its client. There is no separate activity. If that be so, it can only be called GTA service and the recipient has to pay service tax. For the appellant, its sub-contractor was the service provider and the appellant paid service tax under reverse charge. For Jhakodia Minerals, the appellant was the provider of GTA service. That being so, the demand of service tax, if any could have been only under GTA service on Jhakodia minerals under reverse charge.
Conclusion - The demand of service tax on the profits earned by the appellant is beyond the scope of Finance Act, 1994 and it cannot be sustained. The demand of service tax and interest and imposition of penalties on the appellant therefore, cannot be sustained and need to be set aside.
The impugned order is set aside - appeal allowed.
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2025 (6) TMI 184
Time limitation for issuance of SCN - Classification of services - Banking and Other Financial Service or not - amounts deducted by foreign banks towards bank charges on export proceeds - reverse charge mechanism - HELD THAT:- This Tribunal has decided the very same issue in favour of the appellants in their own case M/S. SKM EGG PRODUCTS EXPORT (I) LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE (APPEALS), ANNAI MEDU SALEM [2023 (3) TMI 1384 - CESTAT CHENNAI] on a Show Cause Notice issued to the appellants covering the period 2006 – 2007 and vide M/S. SKM EGG PRODUCTS VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE., SALEM COMMISSIONERATE [2025 (1) TMI 1038 - CESTAT CHENNAI] on a Show Cause Notice issued to the appellants covering the period July 2012 to March 2013. It is found that the present proceedings are for the period from 1.4.2013 to 30.9.2013.
This Bench in M/S. SKM EGG PRODUCTS EXPORT (I) LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE (APPEALS), ANNAI MEDU SALEM has held the impugned order that demanded service tax on foreign bank charges set aside.
Conclusion - Service tax under reverse charge on "Banking and Other Financial Services" is payable only by the actual service recipient.
The impugned order cannot be sustained - Appeal allowed.
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2025 (6) TMI 183
Non-payment of service tax on TDS - availment of irregular cenvat credit - failure to discharge service tax on advances received from customers - failure to pay service tax on services provided to their Pune Division - wrong adjustment of service tax liability against bad debts written off in 2013-14 & 2014-15 - extended period of limitation - penalty.
Whether cenvat credit of Rs.2,17,92,402/- availed by the appellant on the service tax paid by M/s. IndusInd Bank Limited is admissible? - HELD THAT:- The learned Commissioner denied the said credit on the ground that the proceeds of short-term loans and NCDs were not used for the purpose of R&D activities by the unit at Bangalore since they do not carry any R&D activity at Bangalore. In other words, services have not been used at Bangalore but used at their Pune unit. Rebutting the said argument, the appellant has submitted that Bangalore unit also undertakes R&D activities relating to contractual obligations and Pune unit undertakes R&D activity on drug discovery. The loan raised by the appellant relating to the activity of finance of the company and it cannot be assigned either to Pune or Bangalore unit; hence the credit is admissible. There are merit in the contention of the learned Chartered Accountant for the appellant inasmuch as M/s. IndusInd Bank Limited had invested a sum of Rs.205 crores in NCDs and also the appellant had availed three short-term loans of Rs.15.00 crores each and one short-term loan of Rs.10.00 crores for their temporary cash flow requirements - the cenvat credit of Rs.2,17,98,402/- availed by the appellant fall under the scope of ‘input service’ being under the category of “financing” specifically mentioned under the said definition and admissible as credit.
Whether service tax of Rs.8,42,53,255/- on the services rendered to their unit at Pune is payable? - HELD THAT:- The appellant in their reply to the show-cause notice has submitted that it is an inter division accounting adjustment for transactions carried out as recorded in their General Ledger; hence no service has been rendered by the Bangalore unit to their Pune unit. Further, it is found that at best, since both belonging to the same group, the service can be considered as self-service as held by the Tribunal in the case of PRECOT MILLS LTD. VERSUS CCE, TIRUPATI [2006 (2) TMI 25 - APPELLATE TRIBUNAL, BANGALORE]. Therefore, the demand on this count is also bad in law and not sustainable.
Whether service tax of Rs.45,88,500/- against the written off of bad debts is payable by the appellant? - HELD THAT:- On the issue of adjustment of service tax amount of Rs.45,88,500/- against the service tax payable for the month of March 2013 and December 2014 under Rule 6(3) of the Service Tax Rules, 1994 against writing off of the receivables of Rs.12,24,30,713/- and Rs.71,00,989/- declared as bad trade, the learned Commissioner in the impugned order held that such adjustment of service tax is impermissible under Rule 6(3) of the Service Tax Rules, 1994.
Whether extended period of limitation is invocable? - HELD THAT:- The appellant had adjusted the amount against non-payment of service tax even though service rendered for the period prior to 01.04.2011 and service rendered but payments not received for the period thereafter etc. Therefore, there are no discrepancy in the conclusion of the learned Commissioner in confirming the demand on this count. However, the demand confirmed by the learned Commissioner invoking extended period cannot be sustained as the adjustment was made by the appellant in their ST-3 returns during the month of March 2013 and December 2014; hence not suppressed from the knowledge of the Department. The demand should be limited to normal period of limitation.
Conclusion - i) Cenvat credit of Rs.2,17,92,402/- on financing services is admissible and recovery set aside. ii) Demand of Rs.8,42,53,255/- on inter-unit services is not sustainable and is set aside. iii) Demand of Rs.45,88,500/- on bad debts adjustment is confirmed but limited to normal limitation period; matter remanded for re-computation. iv) No penalty is imposable on the appellant.
Appeal disposed off.
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2025 (6) TMI 182
Taxability - amount received by the appellant towards distribution of mail received from their overseas group company to addressees in India - Mailing List Compilation and Mailing Service or not - service tax on reimbursable expenses received by the appellant during the said period - short payment of duty by the Department in comparison with ST-3 returns for the period 2005-06 and 2006-07 with their balance sheet - extended period of limitation.
The amount received towards distribution of mail received from their group company to the addressees in India would fall under the taxable category of ‘Mailing List Compilation and Mailing Service’ as defined under Section 65(63a) of the Finance Act, 1994 for the period from 01.04.2005 to 31.03.2010 - HELD THAT:- On receiving the blank packets in the event a person carries out the activity of addressing, stuffing, metering or mailing for and on behalf of the client, then only it would fall under the scope of Mailing List Compilation and Mailing Service. Thus, mere segregating and delivering documents to the addresses already affixed on the packages cannot be considered to fall within the scope of the ‘Mailing List Compilation and Mailing Service’. The learned Commissioner while confirming the demand under the taxable category of Mailing List Compilation and Mailing Service also reasoned that the services provided by the appellant is a commercial service; hence, would fall within the scope of the said definition being the service rendered to a client, which is in the nature of commercial. However, besides being a commercial activity, the activities should fall under the scope of taxable entry as defined under Section 65(63a) of the Finance Act, 1994. On merit, since the activity carried out by the appellant does not fall within the scope of ‘Mailing List Compilation and Mailing Services’ as defined under Section 65(63a) of the Finance Act, 1994, the demand on this count cannot be sustained. Consequently, the alternate argument advanced by the appellant that the services rendered is an export service becomes academic; hence not delved into.
Service tax of Rs. 29,60,509/- is payable on reimbursable expenses for the period 01.04.2005 to 31.03.2010 - HELD THAT:- The issue is covered by the judgment of the Hon’ble Supreme Court in the case of UOI Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT] wherein the Hon’ble Apex Court observed that Rule 5(1) of the Valuation Rules, 2006 which sought to include reimbursable expenses within the scope of value of taxable service, being contrary to the principle of Section 67 of the Finance Act, 1994 as was existed prior to 2014; hence ultra vires. Thus, demand on this account cannot be sustained.
Service tax short-paid amounting to Rs.10,60,195/- is recoverable consequent to the reconciliation of the taxable value shown in the ST-3 returns and their balance sheet for the period 2005-06 and 2006-07 - HELD THAT:- The appellant though said that such demand cannot be sustained without examining the correctness of the figures mentioned in each of the demand; however, furnished the reconciliation statement of the same which has not been considered by the Commissioner. Prima facie, there are merit in the contention of the advocate for the appellant that even though such reconciliation statement has been submitted however not analysed by the Commissioner and the demand was confirmed observing that the appellant had not followed the procedure declaring the taxable value mentioned in the ST-3 returns and balance sheet. Therefore, the said findings without verification of the reconciliation statement cannot be sustained.
Invocation of extended period of limitation - HELD THAT:- The appellant has been filing the ST-3 returns specifying all the facts relevant and subjected to audit from time to time. In these circumstances, invocation of extended period of limitation in absence of misdeclaration or suppression of fact cannot be sustained.
Conclusion - i) The appellant's activities did not amount to 'Mailing List Compilation and Mailing Service' under Section 65(63a), thereby negating the service tax demand on that count. The demand on reimbursable expenses was also set aside based on binding Supreme Court precedent. ii) The short payment demand was remanded for fresh adjudication with directions to consider reconciliation submitted by the appellant, restricting any demand to the normal limitation period. iii) The penalty and extended period invocation were disallowed due to lack of suppression or fraud.
The impugned order is modified and the demands relating to service tax on ‘Mailing List Compilation and Mailing Services’ and reimbursement amount received are set aside. For re-computation of demands relating to reconciliation of the figure shown in ST-3 returns and the balance sheet, the matter is remanded to the adjudicating authority - appeal disposed off by way of remand.
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2025 (6) TMI 181
Liability of appellant to pay service tax as sub-contractor when the main contractor has already paid service tax on the whole value of the receipts including the receipts of the sub-contractor - HELD THAT:- The issue is squarely covered vide the decision in the case of Melange Developers Pvt. Ltd. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB]. The Larger Bench while referring various decisions has held that 'it is not possible to accept the contention of the learned Counsel for the Respondent that a subcontractor is not required to discharge Service Tax liability if the main contractor has discharged liability on the work assigned to the sub-contractor'.
Conclusion - Sub-contractors providing taxable services are liable to pay service tax, regardless of the main contractor's payment.
Appeal dismissed.
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2025 (6) TMI 180
Levy of penalty on the appellant under Rule 26 of the Central Excise Rules, 2002 - abetted and facilitated one of the assessees in availing and utilizing unavailable/irregular CENVAT Credit which was found to be highly excessive as compared to past periods - HELD THAT:- In this case, the ld. adjudicating authority has observed that the scope of review and correction by the appellant was limited to the correction of errors apparent on record and not to make changes to substantial data such as quantity of goods and CENVAT Credit. Hence, it has been held by the ld. adjudicating authority that the correction in the E.R.-1 Return already filed by the said assessee made by the appellant, was beyond his mandate.
The appellant made changes to the opening balance of the CENVAT Credit account of September 2016 just because he could not revise the E.R.-1 Return of August 2016. This confirms his actions to be in collusion with the said assessee and somehow allow them extra CENVAT Credit, leading to evasion of central excise duty on their goods and also passing on excess CENVAT Credit to the buyers.
Considering the fact that disciplinary action has been initiated against the appellant and while dealing with the disciplinary action, it has been observed that the act or omission on the part of the appellant were not deliberate, but rather were taken under a bona fide belief that the assessee's intimation was correct, as there is no allegation for any extraneous consideration for such act or omission and thus the allegation of contravention of Rule 3(1)(i) is not proved by any angle.
Conclusion - Since the act of the appellant has been found to be not deliberate, therefore, we observe that a mistake had occurred on the part of the appellant in revising the said Returns of the assessee. Thus, it cannot be held that the appellant has aided or abetted the availing of extra irregular CENVAT Credit by the said assessee.
No penalty is imposable on the appellant. Therefore, the penalty of Rs.25,00,000/- imposed on the appellant under Rule 26(2) of the Central Excise Rules, 2002, is set aside - Appeal allowed.
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2025 (6) TMI 179
Recovery of inadmissible CENVAT credit with interest and penalty - iron and steel items - security services - Wrong utilization of CENVAT Credit of Ed Cess & SHE cess for payment of central excise duty - levy of penalty.
Whether the CENVAT Credit of Rs 1,00,556/- taken by the appellant in respect of Structural platforms, flat rolled products of iron/ steel and hot rolled alloy steel plates would be admissible to them? - extended period of limitation - HELD THAT:- Appellants have claimed the CENVAT Credit in respect of Structural platforms, flat rolled products of iron/ steel and hot rolled alloy steel plates, under the category of Capital Goods as defined by Rule 2 (a) of the CENVAT Credit Rules, 2004. However subsequently they have changed their stand and have claimed that these goods should be treated as inputs as defined by Rule 2(k) ibid. They have used these goods for the manufacture of the capital goods used in manufacture of the finished goods - it is found that subsequently appellant has changed his stand and by relying on the decisions of this tribunal and various High Court, they have claimed that this credit would be admissible to them under the category of inputs, as these goods have been used by them for the manufacture of capital goods used within their factory. Appellant has made this claim only on the basis of the decisions without showing as to how these decisions would be applicable in their case. Assuming the claim made by the appellant is admissible, then also the same will have to be established by way of the documents and evidences. If the appellant has used these goods for the manufacture of capital goods, then fact of manufacture would have been reflected in their registration certificate and the monthly ER-1 return filed by them.
The definition of inputs as per Rule 2 (k) of CENVAT Credit Rules, 2004 was amended by Notification No 16/2009-CE (NT) and it was provided that cement, angles, channels, CTD or TMT bar and other items used for construction of shed, building or structure for support of capital goods would not be covered by the definition of inputs.
In the present case the entire period is after the amendments made in the year 2009, to the definition of inputs as per Rule 2 (l) of Cenvat Credit Rules, 2004. Thus there is no merits in the claim of the appellant that these goods be treated as inputs. Further it is also noted that appellant has taken cenvat credit in respect of these goods fully aware that the credit would not be admissible in respect of these goods under the category of capital goods or inputs, they have contravened the provision of Rule 9 (5) of the Cenvat Credit Rules, 2004 with intent to utilize the same for payment of central Excise duty. Impugned order has in para 4.11 recorded the reasons for invoking the extended period of limitation which have not been refuted by the appellant. Thus the extended period of limitation has been rightly invoked for making this demand.
Whether the CENVAT Credit of Rs 1,12,442/- taken by the appellant in respect of security services provided in the residential colony would be admissible to them? - HELD THAT:- There are no merits in the submissions made by the appellant. A single member of tribunal could not have in case of Ultratech Cement referred by the appellant, ruled against the above decisions on the point of law. He could have only distinguished on facts to hold that these decisions are not applicable. However as it is found the issue to be squarely covered by the above decisions of High Court, there are no merits in the arguments advanced.
From the perusal of the above amendment made in 2011, it is evident that service which were meant for personal consumption of the employees have been kept out of the purview of the definition of the input services. The intention of the amendment is evident from the use of phrase ‘when such services are used primarily for personal use or consumption of any employee;”. Though security services are not specifically stated in the first part of the exclusion clause however, the above phrase make it evident that services meant for personal consumption of employees have been excluded. This view is in line with the decision of Hon’ble High Court of Gujarat and Bombay wherein even in respect of the un-amended definition they have ruled against the admissibility of the credit - Impugned order has recorded the reasons for invoking the extended period of limitation which have not been refuted by the appellant.
Whether appellant could have utilized the CENVAT Credit of Ed Cess and SHE Cess for payment of Central Excise duty during the month of March 2015? - HELD THAT:- In case of Genus Paper & Boards Ltd. [2023 (9) TMI 711 - CESTAT ALLAHABAD] the view is taken in favour of such cross utilization of the credit. However this view was taken as decision of the Hon’ble Delhi High Court specifically on the subject was not brought to my notice. Thus the decision rendered in ignorance of the binding decision of Hon’ble Delhi High Court is per incurriam. However the fact of cross utilization of the accumulated CENVAT Credit of education cess and higher education cess for the purpose of payment of central excise duty during the month of March 2015, was reflected in ER-1 return of the appellant. Thus this demand made by invoking extended period of limitation by a show cause notice dated 09.10.2019 cannot be upheld. It is also found that the impugned order does not record any findings on the issue of limitation. Order in original records that the appellant has never disclosed the fact of utilization of the accumulated CENVAT Credit of Edu Cess and SHE Cess during the month of March 2015 for payment of Central Excise duty, is contrary to the fact that the appellant had filed the ER-1 returns for that period, wherein the said utilization of credit would have been reflected. The demand has been made after the decision of Hon’ble High Court referred earlier. A change in opinion on the basis of subsequent decision of High Court cannot be reason for invoking the extended period of limitation.
Whether penalty have been rightly imposed upon the appellant? - HELD THAT:- As it is held held in favour of invocation of extended period of limitation for these two demands, penalty imposed in respect of these demand in terms of Rule 15 (2) of CENVAT Credit Rules, 2004 reqad with Section 11AC of Central Excise Act, 1944 cannot be faulted with.
Conclusion - i) CENVAT Credit of Rs.1,00,556/- taken by the appellant in respect of Structural platforms, flat rolled products of iron/ steel and hot rolled alloy steel plates would not be admissible to them. Demand Upheld. ii) CENVAT Credit of Rs 1,12,442/- taken by the appellant in respect of security services provided in the residential colony would not be admissible to them. Demand upheld. iii) Demand made in respect of utilization the CENVAT Credit of Ed Cess and SHE Cess for payment of Central Excise duty during the month of March 2015 is dropped as barred by limitation. iv) Demand of interest in respect of demand confirmed is upheld. v) Penalty in respect of demand confirmed is upheld under Rule 15 (2) of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944.
Appeal allowed in part.
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2025 (6) TMI 178
Calculation of Excise duty - whether the national cost of drawings and designs supplied free of cost by Maruti to the vendor should be included in the assessable value of parts or components manufactured by vendor and cleared to Maruti for the purpose of payment of central excise duty? - HELD THAT:- This issue was considered by this Division Bench in Denso India Private Limited vs. Additional Director General (Adjudication), New Delhi [2024 (3) TMI 686 - CESTAT NEW DELHI] and it was held that the notional cost of drawings and designs supplied free of cost by Maruti to the vendors cannot be included in the assessable value of the parts and components manufactured by vendors and cleared to Maruti for the purpose of payment of central excise duty.
The impugned order dated 16.01.2024 passed by the Additional Director General (Adjudication) deserves to be set aside and is set aside - Appeal allowed.
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2025 (6) TMI 177
The Supreme Court, through Justices J.B. Pardiwala and R. Mahadevan, heard the parties and granted the petitioner's counsel permission to withdraw the Miscellaneous Application. The Court accordingly "dismissed the Miscellaneous Application as not pressed" and disposed of all pending applications.
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2025 (6) TMI 176
Proclaimed offender or not - whether the proclaimed offender status, under the provisions of the Cr.P.C., of an accused can subsist if such accused stands acquitted during trial in connection to the very same offence? - whether the subsistence of the proclamation under Section 82 of Cr.P.C. is necessary for the authorities to proceed against an accused against whom such a proclamation stands issued, under Section 174A of the Indian Penal Code, 1860? - HELD THAT:- It is the admitted position at the Bar that in subsequent developments after the filing of the special leave petition, the Appellant stands exonerated in the germane proceedings under section 138 of the Negotiable Instruments Act, 1881.
The purpose of Section 82 Cr.P.C., as can be understood from a bare reading of the statutory text is to ensure that a person who is called to appear before a Court, does so. This Section appears as part of Chapter VI which is titled ‘Process to Compel Appearance’. Section 83 to 90 provide for the additional method of attachment of property to the end of securing appearance. Necessarily then some or the other proceeding has to be ongoing for which the presence of such person is necessary. The words of the Section dictate that it can be only issued in respect of a person against whom a warrant has been issued. Neither a warrant nor proclamation subsequent can be conjured up out of thin air - Section 174A IPC, inserted by the 2005 Amendment to the Indian Penal Code inserts a substantive offence, prescribing punishment of three years or fine or both when such proclamation is issued under Section 82(1) Cr.P.C. and, seven years and fine if the said proclamation is under Subsection (4) thereof. The object and purpose of this Section is to ensure penal consequences for defiance of a Court order requiring a person’s presence.
Thus, Section 174A IPC is an independent, substantive offence, that can continue even if the proclamation under Section 82, Cr.P.C. is extinguished. It is a stand-alone offence. That being the position of law, let us now turn to the present facts. As we have already noted supra, the Appellant stands acquitted of the main offence.
The Appellant has been acquitted which means that there is no case for which his presence is required to be secured.
Conclusion - i) Section 174A IPC is an independent, substantive offence, that can continue even if the proclamation under Section 82, Cr.P.C. is extinguished. It is a stand-alone offence. ii) The proclaimed offender status under Section 82 Cr.P.C. ceases to subsist once the accused is acquitted in the trial relating to the same offence. iii) While proceedings under Section 174A IPC cannot be initiated independent of Section 82 Cr.P.C., they can continue if the said proclamation is no longer in effect.
Appeal allowed.
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2025 (6) TMI 175
Bar for a mortgagee Bank to exercise powers under Sarfaesi Act for sale of the property on account of an attachment order passed by a Tax Recovery Officer - sale by way of auction conducted by the State Bank of Patiala wherein the Petitioner was declared successful bidder is void insofar as the Tax Recovery Officer is concerned - refusal to register the sales certificate on account of an attachment order issued by a Tax Recovery Officer and an attachment order passed in an Arbitration proceeding.
Whether there is a bar for a mortgagee bank to exercise powers under Sarfaesi Act for sale of the property on account of an attachment order passed by a Tax Recovery Officer? - HELD THAT:- In the present case Sri. G. Bhadraradhya is not the defaulter or representative in interest of the defaulter, he had an independent right over the property under a sale deed in furtherance of which a mortgage was made in favor of State Bank of Patiala as regards which he had defaulted, resulting in State Bank of Patiala having brought the property for sale.
The contention of the learned counsel for the Tax Recovery Officer that the attachment order passed under Rule 2 would apply to the present facts and circumstances cannot be countenanced since there is no attachment order issued in respect to any dues of Sri. G. Bhadraradhya to the Income Tax Department. It is the default in payment of the dues of Sri. G. Bhadraradhya to the bank whose default of payment of mortgage amounts resulted in the property being brought for sale.
The question of the exercise of rights by State Bank of Patiala under the Sarfaesi Act in the year 2012, when the sale has occurred in favor of Smt. Archana Anand Kumar on 15.07.2009 and there being a recovery proceeding initiated by the Tax Recovery Officer against Smt. Archana Anand Kumar on 02.03.2010, with the attachment order passed on 06.04.2010, before the sale on 14.05.2012 would have to be determined in appropriate proceedings.
There is no bar for a mortgagee bank to exercise powers under Sarfaesi Act for sale of the property on account of an attachment order passed by a Tax Recovery Officer, any exercise of such rights shall be subject to the rights of the Tax Recovery Officer, all of which would have to be determined in an appropriately instituted suit.
Whether the sale by way of auction conducted by the State Bank of Patiala wherein the Petitioner has declared successful bidder is void insofar as the Tax Recovery Officer is concerned? - HELD THAT:- An order of attachment does not ipso facto operate as an injunction from sale or a restriction on the sub-registrar to register the sale. What the attachment order does is to secure the property in respect of the claim of the Tax Recovery Officer, and any sale which occurs will be subject to the attachment, and the sale or transfer would be void as against the claims enforceable under the attachment. This aspect has been brought to the notice of the Petitioner and the Petitioner is willing to take on sale the property subject to any of the rights of any third-party in as much as the sale according to the counsel for the State Bank of Patiala has been conducted on as is there is basis without any representation, warranty or indemnity as regard the title of the property.
The passing of an attachment order would not entitle the sub-registrar to reject the registration of a sales certificate issued by the State Bank of Patiala after having conducted an auction, the registration shall be subject to the attachment order passed.
Whether the sub-registrar would have refused to register the sales certificate on account of an attachment order issued by a Tax Recovery Officer and an attachment order passed in an Arbitration proceeding, to put it in other words, whether an order of attachment would entitle the Sub-registrar to refuse registration of a transfer of property? - HELD THAT:- This Court has considered the interplay of the SARFAESI Act under Sections 26E and 35 of the SARFAESI Act on the one hand and Section 71 of the Registration Act read with Rule 171 of the Karnataka Registration Rules, 1965 (hereinafter referred to as 'the Registration Rules'). On considering the interplay, this Court by applying the decision of the Hon'ble Apex Court in Punjab National Bank V/s Union of India and Others, [], has held that the Sub-Registrar can act only within the four corners of the Registration Act and Registration Rules. If none of the circumstances under Rule 171 of the Rules are found to be applicable, the sub-registrar has no jurisdiction to refuse registration of a document. It is not the case of the Sub-Registrar that the sale certificate which has been issued does not comply with the requirement of Rule 171 or Section 71 of the Registration Act, 1908. The only contention of the sub-registrar is that there is an attachment order issued by a Tax Recovery Officer and there is an attachment order passed in an arbitration proceeding.
Once an order of attachment is passed, the attachment order goes along with the property, and the property continues to remain attached, entitling the person who is a beneficiary of the attachment to enforce such attachment in accordance with law. Thus, by registration of the sale certificate, the rights of the person or entity who has an attachment order in his favour is not taken away. The Petitioner being fully aware of such attachment orders, would take the registration of the property subject to the attachment orders - there is no order that has been passed against the sub-registrar prohibiting the sub-registrar from registering the sale certificate. Because there is an attachment order, the sub-registrar would not be conferred any authority to reject the registration of the sale certificate.
A sub-registrar cannot refuse to register a sale certificate on account of an attachment order passed by the Tax Recovery Officer and/or an attachment order passed in an arbitration proceeding. The sub-registrar can refuse registration only if there is an order of injunction restraining the transfer and/or an order prohibiting the sub-registrar from registering a particular sale certificate, sale deed, or the like.
Whether in the facts of this case, the reliefs sought for by the Petitioner are required to be granted? - HELD THAT:- The auction having taken place on as is where is basis, an auction purchaser would only be entitled to the rights that State Bank of Patiala had as regards the said property, if there are any other claims, more particularly as regards respondent No. 2-Bank and respondent No. 3-TRO, the same would have to be adjudicated in the pending proceedings.
Conclusion - i) There is no bar for a mortgagee bank to exercise powers under Sarfaesi Act for sale of the property on account of an attachment order passed by a Tax Recovery Officer, any exercise of such rights shall be subject to the rights of the Tax Recovery Officer, all of which would have to be determined in an appropriately instituted suit. ii) The passing of an attachment order would not entitle the sub-registrar to reject the registration of a sales certificate issued by the State Bank of Patiala after having conducted an auction, the registration shall be subject to the attachment order passed. iii) A sub-registrar cannot refuse to register a sale certificate on account of an attachment order passed by the Tax Recovery Officer and/or an attachment order passed in an arbitration proceeding. The sub-registrar can refuse registration only if there is an order of injunction restraining the transfer and/or an order prohibiting the sub-registrar from registering a particular sale certificate, sale deed, or the like. iv) The auction having taken place on as is where is basis, an auction purchaser would only be entitled to the rights that State Bank of Patiala had as regards the said property, if there are any other claims, more particularly as regards respondent No. 2-Bank and respondent No. 3-TRO, the same would have to be adjudicated in the pending proceedings.
Respondent No. 1-the State Bank of Patiala is directed to revalidate the sale certificate to enable the Petitioner to present the same before the jurisdictional sub-registrar which shall be so done within 30 days from the date of receipt of a copy of this order - petition allowed in part.
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2025 (6) TMI 174
Seeking declaration that J.C. Flowers is the exclusive charge holder/mortgagee with regard to the suit property - validity of deeds of simple mortgage - subsequent mortgage deeds created without the prior written consent of the first mortgagee (Yes Bank, later assigned to J.C. Flowers) are enforceable or not - HELD THAT:- The apprehension of injury to J.C. Flowers is clearly demonstrated by the fact that under the IB proceedings all the financial creditors who claim to be secured financial creditors are treated at par, i.e. no priority is accorded on the basis of first and second charge in terms of entitlement under Resolution Plan approved by CoC/NCLT. Moreover, NCLT in IB proceedings may not be in a position to adjudge the invalidity of the subsequent mortgage and hence we find force in the submission of Mr. Sancheti that in such circumstances the position of J.C. Flowers as sole and exclusive charge holder would clearly be compromised.
The impugned mortgage in favour of Omkara Asset is clearly contrary to the terms of the prior mortgage inasmuch as it purports to grant exclusive first charge in favour of Omkara Asset as mentioned in Clause 2 and Clause 3 of the impugned deed of mortgage. In the facts of the present case J.C. Flowers has prima facie made out a case that the essential condition about the instrument being void or voidable against J.C. Flowers and that J.C. Flowers reasonably apprehends serious injury by the instrument being left outstanding are met.
In Bikram Chatterji and others [2019 (7) TMI 1233 - SUPREME COURT] Their Lordships observed in paragraph 85 that “In order to create a mortgage, it was necessary to obtain clear NOC in order to create effective mortgage deed. As that has not been done so far, no mortgage in the eye of the law has been created in favour of the bank. It was not open to the bankers to mortgage the land in view of the conditional permission to create mortgage, the mortgage created in violation of condition cannot be said to be effective in accordance with law as the land was owned by the authorities concerned and the lessees had right to mortgage only subject to fulfilment of conditions imposed by the lessor/authorities.”
The facts of the present case and the conduct of Sumer as well the conduct on the part of Omkara Asset in seeking the deeds of mortgage executed even prior to the issuance of conditional NOC of Yes Bank cannot be overlooked. The huge loans of Yes Bank were not repaid. The loan account was not closed. The NOC of Yes Bank was a conditional one. It appears that mortgage deeds were executed by Omkara Asset hurriedly. In the light of the various clauses referred to hereinbefore, it is obvious that the impugned mortgage deeds without a clear NOC from Yes Bank cannot be a mortgage in the eye of law. It was not open for Sumer to create a mortgage in favour of Omkara Asset. The conduct of Sumer is dishonest. The claim of J. C. Flowers cannot be defeated in such a manner. The provisions of law cannot be read in the given facts which would virtually amount to putting a premium on a dishonest transaction by holding that Omkara Asset still is entitled to a second charge.
Conclusion - The manner in which the discretion is exercised by the learned Single Judge in the facts of the present case which cannot be said to arbitrary, capricious or perverse to warrant interference in the Appeal.
There are no merit in this appeal - appeal dismissed.
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