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Showing 501 to 520 of 1484 Records
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2025 (3) TMI 984
Penalty imposed u/s 43 of the Black Money Act - Failure to disclose foreign assets in the income tax return - HELD THAT:-Admittedly, the appeal filed by the assessee against the quantum assessment proceedings, before Coordinate bench, ITAT, Jaipur Bench was allowed, but, the legal proposition as rightly put forth by ld. DR for the appellant, and not controverted on behalf of the assessee, is that quantum assessment proceedings are different from the proceedings for levy of penalty. Therefore, the observations made by the Coordinate Bench in the quantum assessment proceedings were of no avail to the assessee in the penalty proceedings.
CIT(A) was of the view that revised return replaces the original ITR and that same was accepted by the AO.
From the above reason, it is obvious that CIT(A) did not go into merits, as to whether the appellant was required to disclose asset in Schedule FA or not, and rather, he set aside the penalty having regard to the disclosure made in the revised return.
CIT(A) should have discussed the above said point first and then proceeded further to decide the validity of the impugned penalty order.
We are in agreement with CIT(A) that furnishing of revised return certainly replaces the original ITR, and accordingly, for the year under consideration i.e. AY 2017-18, CIT(A) was justified in setting aside the penalty order, once the assessee, even though after search action, came forward to disclose the foreign assets by furnishing revised return. Decided against revenue.
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2025 (3) TMI 983
Denial of Foreign Tax Credit claimed - assessee has filed Form 67 after filing return of income u/s 139(1) - HELD THAT:- Identical issue came up in the case of Neha Kapoor [2023 (9) TMI 31 - ITAT DELHI] wherein held Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67; (ii) filing of Form No.67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act - Thus, we direct the AO to accept Form 67 filed by the assessee and allow Foreign Tax Credit in accordance with law. Also see Ajay Kumar Mishra [2023 (6) TMI 363 - ITAT DELHI] - Decided in favour of assessee.
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2025 (3) TMI 982
Rectification of mistake u/s 254 - non-adjudication of the ground of appeal concerning the grant of TDS credit by the CIT(A) - HELD THAT:- As assessee is entitled for credit of TDS in view of section 199 of Income Tax and the AO is duty bound to allow the same as per Rule. Coming to the MA, we find that the assessee has not raised the specific ground for grant of TDS in Form-36 before us.
AR has also not argued this ground during the course of hearing. We therefore are of the opinion that if the assessee has neither raised a specific ground, nor argued it before the ITAT, the Tribunal cannot be expected to adjudicate the matter.
As per Section 254(2) of the Act, the scope of MA is limited to rectify apparent mistakes in the order of ITAT. An error must be apparent on the face of record and not require extensive arguments or deliberation. As in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd [2008 (9) TMI 11 - SUPREME COURT] has clarified that a mistake apparent from record must be obvious and patent and not something that requires investigation or arguments.
As the assessee has not raised the issue as a specific ground of appeal, nor the AR argued this issue during ITAT hearing, the MAs filed by the assessee are dismissed.
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2025 (3) TMI 981
Classification of imported goods - Roasted Areca Nuts - to be classified under Chapter Heading No. 2008 19 20, as claimed by the petitioner, or under Heading No. 080280, as suggested by the respondents - respondents' requirement for the petitioner to submit a provisional bond and Bank Guarantee of 25% of the differential duty for provisional release of goods - HELD THAT:- The petitioners are directed to deposit reduced security amounts and ordered the respondents to issue provisional release orders within three days of deposit. The final assessment was to be expedited following the receipt of the petitioners' replies and evidence.
Petition disposed off.
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2025 (3) TMI 980
Seeking setting aside of the seizure of the gold Kada - waiver of SCN and perosnal hearing - no SCN was issued and more than one year has elapsed since the detention - HELD THAT:- There was waiver of show cause notice and no personal hearing was also granted to the Petitioner. As per the operative portion of the order, there is complete confiscation of one elongated gold piece bent in kada shape.
This Court is of the opinion that following the decision in Mr. Makhinder Chopra v. Commissioner of Customs [2025 (3) TMI 19 - DELHI HIGH COURT], waiver of show cause notice and waiver of personal hearing in standard format is contrary to law.
It appears to the Court that even in the present case it is a standard form waiver. Under these circumstances, the order in original cannot be sustained and the same is accordingly quashed. The gold Kada be released, however, subject to payment of storage charges - Let the Petitioner approach the Customs Department for release of said Kada.
Conclusion - The gold Kada is ordered to be released to the Petitioner, subject to payment of storage charges, as the confiscation could not be sustained.
Peition disposed off.
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2025 (3) TMI 979
Seeking provisional release of imported goods u/s Section 110A of the Customs Act, 1962 - old and used tyres - HELD THAT:- This petition is disposed of with a direction to the petitioner to prefer an Appeal challenging the order dated 6th February, 2025 rejecting the application for provisional release within a period of two weeks from today. The Appellate Authority shall decide the Appeal within a period of four weeks from the date of receipt of copy of such appeal memo after giving an opportunity of hearing to the petitioner. It is clarified that the merits of the matter not entered into, and the further proceedings may be decided by the concerned authorities in accordance with law.
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2025 (3) TMI 978
Classification of imported goods - to be classified as Polystyrene GPPS 1450 in powder form under CTH 39031910 or if they should be reclassified as Polystyrene in granular form under CTH 39031990? - exemption form BCD under N/N. 10/2008-CUS dated 15.01.2008, as amended by N/N. 53/2015-CUS dated 23.11.2015 - levy of penalty on Director of the appellant-company under Section 114AA of the Act - time limitation - suppression of facts or not - Confiscation - interest and penalty - HELD THAT:- When suppression clause is invoked, the Show Cause Notice is to be adjudicated within a period of one year from the date of issue of the notice. In this case, the Notice was issued on 05.07.2018. It was adjudicated within one year. The submission of the appellant in this regard is that there is no suppression of fact established against them in this case and hence the notice should have been adjudicated within 6 months from the date of issue of the notice. It is found that the said notice has been issued by invoking extended period of limitation.
The appellant had enjoyed BCD exemption provided under Notification No. 10/2008- Cus. dated 15.01.2008 on the imported goods, Polystyrene GPPS 1450, based on the Certificate of Origin issued by the designated authority of the Country of export i.e., Singapore in respect of the earlier 17 Bills of Entry. However, in respect of the last Bill of Entry No. 4199210 dated 29.11.2017, the sample was tested and found to be in ‘Granular Form’ - the Department has applied the test report received in respect of the goods imported vide Bill of Entry No. 4199210 dated 29.11.2017 for all the previous imports and charged Customs duty on all the 18 Bills of Entry, which is legally not sustainable. It is observed that the test report received in respect of the goods imported vide Bill of Entry No. 4199210 dated 29.11.2017 is applicable only for that Bill of Entry and the same cannot be applied to all previous imports.
The test report in respect of the goods imported vide Bill of Entry 4199210 dated 29.11.2017 cannot be applied to the goods imported earlier under the 17 Bills of Entry, as no samples have been drawn in respect of the said Bills of Entry. In these circumstances, we hold that the demand of Customs duty confirmed in the impugned order in respect of the past imports vide 17 Bills of Entry is not sustainable. Accordingly, the same is set aside.
Interest and penalty - Confiscation - HELD THAT:- Since the demand of Customs duty in respect of the 17 Bills of Entry pertaining to past imports is found to be not sustainable, the demand of interest and imposition of penalty on the differential duty confirmed on this count against the appellant-company is also not sustainable and accordingly, the same are set aside. Since, the mis declaration alleged in the previous 17 imports is not established, it is also held that the said goods imported vide those 17 Bills of Entry are not liable for confiscation.
Penalty on Director of the Appellant-Company, under Section 114AA of the Customs Act, 1962 - HELD THAT:- Mis-declaration with intention to evade Customs duty has been established in this case in respect of the goods imported vide Bill of Entry No. 4199210 dated 29.11.2017. Hence, penalty u/s 114AA of the Act is liable to be imposed on the Director of the Appellant- Company, but the penalty imposed should commensurate with the duty involved in the said Bill of Entry. In these circumstances, the penalty imposed on Shri Rushab Thakker, Director of the Appellant-Company, u/s 114AA of the Act is reduced from Rs.10, 00, 000/- to Rs.1, 00, 000/-.
Conclusion - i) The demand of Customs duty for the past 17 imports is set aside due to lack of evidence of mis-declaration. ii) The demand for the goods under Bill of Entry No. 4199210 dated 29.11.2017 is upheld, with penalties for mis-declaration. iii) The penalty on the Director is reduced, reflecting the lack of evidence of intentional evasion for past imports.
Appeal disposed off.
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2025 (3) TMI 977
Undervaluation of transaction value of impoted to evade Customs Duty - HELD THAT:- The Hon’ble Supreme Court in Century Metal Recycling Pvt. Ltd. v. Union of India [2019 (5) TMI 1152 - SUPREME COURT], has examined the whole procedure of determining the transaction value of goods, the transaction value of which is doubtful and requires to be redetermined. It held that where the proper officer has reason to doubt the truth or accuracy of the value declared for the imported goods, a two-step verification and examination exercise is required to be carried out.
It is found that the Original Authority has not complied with the two-step verification and examination exercise, as stated by the Hon’ble Supreme Court. Revenue has not followed the procedure under sub-rule (2) of Rule 12 of CVR, 2007. This was all the more necessary when the proper officer only relied upon a value declared in a statement to arrive at the transaction value. The appellants request for cross-examination of certain witnesses was also denied. The averments made by the appellant in this case show that there has been a challenge to procedural fairness.
Rule 9 cannot be given an interpretation which is in violation of Section 14 of the Act. Rules are subservient to the Act and cannot deviate from the provisions of the parent Act.
Conclusion - The impugned order is vitiated by the vice of arbitrariness rendered by adopting a fictitious value, which has no sanction under CA 1962 and CVR, 2007, framed there under and hence merits to be set aside.
Appeal disposed off.
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2025 (3) TMI 976
Maintainability of section 9 application initiating CIRP - parties had already entered into settlement much before issuance of demand notice which gave rise to the Section 9 application - section 9 application filed ignoring the payments of 20 instalments - HELD THAT:- It is already noticed that when earlier demand notice was issued on 05.03.2018, parties have entered into settlement dated 24.06.2019 revised on 03.07.2020 for final settlement of Rs.8, 30, 31, 244/- equivalent to $1, 110, 489 in 21 instalments last instalment to be paid by March, 2022. 20 instalments were paid and it was only due to some calculation issues last instalment was not paid, however, during the pendency of Section 9 proceeding said instalment was paid.
Respondent fairly admitted that entire debt has been discharged. In facts of the present case, present is not a case for initiation of Section 9 proceeding against the Corporate Debtor who after receipt of the demand notice has entered into settlement and paid 20 instalments out of 21 instalments and non-payment of 21st instalment was due to calculation issues regarding amount of last instalment. Hence, present was not a case for initiation of any insolvency proceeding against the Corporate Debtor.
Conclusion - Section 9 of the Insolvency and Bankruptcy Code is not to be used as a debt recovery mechanism when a settlement agreement is in place and substantially complied with.
Section 9 application filed by the Respondent was inappropriate and unwarranted given the settlement and subsequent payment of the disputed instalment - appeal allowed.
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2025 (3) TMI 975
Homebuyer or an unsecured financial creditor in the insolvency proceedings of the corporate debtor - reimbursement of the amount paid to the bank - HELD THAT:- The present is a case where Appellant on his own request got his unit cancelled and he has filed the claim with respect to the amount which was paid to the corporate debtor towards allotment of the unit as noted above, allotment was made on 04.06.2025 and the entire amount was paid by the UCO Bank to the corporate debtor. No payment was made by the Appellant to the Corporate Debtor. Appellant has brought on the record the order of the DRAT dated 10.02.2021 filed as Annexure A3 of the Affidavit.
The Appellant entered into settlement with the Bank and paid Rs.17 lakhs towards full and final settlement of the dues, hence, there are no bank dues with respect to the unit in question. Adjudicating Authority in the order although has noticed the amount of Rs.29 Lakhs is reflected as payable by the Corporate Debtor in its books of accounts and the Resolution Professional shall intimate the bank about the amount payable to them forthwith - the Appellant has already paid the amount to the bank and all dues of the bank are settled with the Appellant. The Resolution Professional shall ensure that the amount of Rs.17 lakhs which was paid by the Appellant is paid to the Appellant from the amount reserved in the Resolution Plan. Counsel for the Resolution Professional submitted that the Appellant having paid the amount, the said amount will be paid to the Appellant.
The ends of justice be served in disposing of the appeal directing the Respondent to make payment of amount of Rs.17 lakhs which was paid by the Appellant to the bank for arriving at settlement with the bank regarding amount paid by the bank towards unit in question - The said payment shall be paid to the Appellant within period of 60 days from today.
Conclusion - The Appellant was rightly classified as an unsecured financial creditor and directed the reimbursement of the amount paid to the bank, ensuring compliance with the resolution plan.
Appeal disposed off.
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2025 (3) TMI 974
Entitlement of dissenting financial creditor to receive their liquidation value upfront before any payments are made to the assenting financial creditors - true import and interpretation to Clause 21 of the resolution plan - HELD THAT:- Adjudicating Authority has rightly taken the view that approved resolution plan is binding on all stakeholders including assenting and dissenting and SRA also. The judgment of this Tribunal in Puro Natural Sugars JV [2023 (11) TMI 1034 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI], which has been relied by the appellant has also been noticed and considered by the Adjudicating Authority. In the above case, appeals were filed challenging the Order of the Adjudicating Authority rejecting the resolution plan and the orders passed in the other connected IAs. The objection to the plan was raised by the dissenting financial creditors.
The present is a case where Clause 21 of the plan itself contemplates mechanism of payment to the assenting financial creditor and dissenting financial creditor. Liquidation value of dissenting financial creditor is provided to be paid prior to any recovery are made by assenting financial creditor, hence there is no indication in the resolution plan that the dissenting financial creditor has to be paid as per instalment i.e., for period of 10 years. The decision by dissenting financial creditor not to approve the plan was on the premise that they were not agreeable to receive the 100% payment of their claim within 10 years period rather they were satisfied to receive only lesser amount i.e., 15% in case of IDBI as liquidation value before any payment is made to the assenting financial creditor. Judgment of this Tribunal in Puro Natural Sugars JV, does not come to the aid of the appellant in the facts of the present case where payment to dissenting financial creditor is clearly contemplated in Clause 21 of the resolution plan as noted above and considered by the Adjudicating Authority.
Conclusion - The Adjudicating Authority has passed the impugned order after correctly interpreting Clause 21 of the resolution plan and no error has been committed by the Adjudicating Authority in directing for payment to the dissenting financial creditor prior to any recoveries are made by assenting financial creditor.
Appeal dismissed.
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2025 (3) TMI 973
Extension of timeline for the successful bidder to pay the balance sale consideration beyond the 90-day period prescribed by the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016 - HELD THAT:- The Hon’ble Supreme Court in V.S. Palanivel vs. P. Sriram, CS, Liquidator, Etc. [2024 (9) TMI 625 - SUPREME COURT] itself had occasion to consider the power of the Adjudicating Authority in reference to extension of time for deposit of the balance consideration.
The Hon’ble Supreme Court held that the Adjudicating Authority exercised statutory powers under Section 35 read with Rule 11 of the NCLT Rules for extending the time. Thus, Hon’ble Supreme Court itself did not find any fault in the order of the Adjudicating Authority extending the time of payment after expiry of time of payment prescribed. As noticed above, an application filed by successful bidder/ successful auction purchaser for extension of time was allowed by the Adjudicating Authority on 05.05.2020 which was challenged by the Appellant in Company Appeal (AT) (Ins.) No.343 of 2021 which came to be dismissed on 16.09.2022 - The law laid down by the Hon’ble Supreme Court clearly comes to the aid of the successful bidder in the present case. Adjudicating Authority having extended the time for deposit of the amount which deposit was made and thereafter application was filed for approval of the sale which has also been granted by the Adjudicating Authority.
Conclusion - While the provisions of Clause 12 of Schedule 1 are mandatory, the Adjudicating Authority has the discretion to extend the timeline for payment under certain circumstances, exercising its statutory and inherent powers.
There are no ground to interfere with the impugned orders - appeal dismissed.
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2025 (3) TMI 972
Termination of Corporate Insolvency Resolution Process (CIRP) initiated - seeking clarification of the order on the ground the order simply stops the IRP to take further steps in the Corporate Debtor but in no way it says the CIRP has come to an end or the order dated 04.12.2023 of the Ld. NCLT initiating the CIRP is quashed - HELD THAT:- Admittedly upon initiation of CIRP, the moratorium is to be declared which in fact was declared by the impugned order 04.12.2023. Admittedly vide such order, the IRP was appointed and admittedly per Section 17 of IBC, from the date of the appointment of the IRP, the management of the affairs of the Corporate Debtor stood vested with the IRP on 04.12.2023 itself - A bare perusal of the order dated 07.12.2023 passed by this Tribunal shows the Tribunal only granted a stay on further steps to be taken by the IRP.
Admittedly the applicant being the majority shareholders of the Corporate Debtor and in the wake of allegations it makes; including admission by the appellant that some portion of property of Corporate Debtor has been mortgaged after the CIRP is initiated; the applicant needs to be heard and it cannot be said it has no locus. Even otherwise we need not dwell upon this issue as even the appellant’s application is also for clarification of order dated 07.12.2023.
The main issue in it was qua exclusion of some period for counting of the time limits for completion of CIRP, hence would not be relevant for the issue involved herein. The learned senior counsel also referred to Rajendra Bhutia Vs Suri Rahul Erstwhile Director of the Corporate Debtor and Another [2021 (10) TMI 1458 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH] wherein the facts were the RP did not take possession of the assets during a particular period and the Board of Directors of Corporate Debtor were incharge of its affairs and it was held there cannot be a vacuum in the management of company. However, in this case too the amount so withdrawn by the erstwhile Directors was directed to be refunded alongwith fine to the IRP, hence also is not relevant.
Admittedly after 07.12.2023 the RP is precluded from taking steps qua inviting claims; constituting of Committee of Creditors etc. etc, but this would not mean the Suspended Board shall be incharge of assets of the Corporate Debtor.
Conclusion - i) The management of the Corporate Debtor remains with the IRP despite the stay on further CIRP steps, as per the legal fiction created by the IBC. ii) The stay order does not imply a return to the status quo ante, and the Board of Directors cannot resume control.
Application disposed off.
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2025 (3) TMI 971
Levy of service tax on GTA services under reverse charge mechanism - demand confirmed on the ground that no documents were furnished to substantiate the Appellant’s claim - HELD THAT:- It is observed that the demand of service tax in this case has been confirmed solely on the basis of comparison of books of accounts with service tax returns, without analyzing the reasons for the difference. It is observed that during the underlying period, the books of accounts of the appellant record the expenses on accrual basis, whereas under reverse charge mechanism, the service tax is payable on payment basis. Hence, service tax cannot be calculated on the basis of the figures reported under the head 'Freight Charges'.
The Appellant furnished various certificates from Chartered Accountants to substantiate that in those specific cases, demand of service tax does not arise. It is observed that such certificates were provided by independent chartered accounts, after verification of books of accounts, for obtaining an independent and unbiased opinion regarding correctness of the demand of service tax thereon. In the impugned order, however, the ld. adjudicating authority, without commenting upon the correctness of such certificates, completely brushed them aside on the ground that such certifications ought to have been obtained only by such Chartered Accountants, who are Statutory Auditors of the Appellant, without providing any legal basis for such requirement. The reason given by the ld. adjudicating authority to reject the CA certificate not agreed upon.
Also, the independent CA Certificates have been issued based on verification of books of accounts of the Appellant and they certify that the demand is not sustainable.
Interest and penalty - HELD THAT:- Since the demand of service tax is not sustainable, the question of demanding interest and imposing penalty does not arise and accordingly, the same is set aside.
Conclusion - The demand confirmed vide the impugned order solely based on comparison of books of accounts with service tax returns, without analyzing the reasons for the difference, is not sustainable.
Appeal allowed.
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2025 (3) TMI 970
Tax liability of the service provider providing 'Commercial and Industrial Construction Service' to the public authorities - Period post 1st July, 2007 - applicability of section 66D, the negative list of services - HELD THAT:- The scope of the circular the definition, the exclusion clause of 65 (25 b) and that of mega-exemption notifications now stands clarified by Hon'ble Supreme Court in the case of Krishi Upaj Mandi Samiti v. Commissioner of Central Excise and Service Tax [2022 (2) TMI 1113 - SUPREME COURT] Hon’ble supreme court has dealt with the Circular No. 89/7/2006 as relied upon by the present appellant as well. It has been held that 'Paragraph 3 of the Circular, specifically clarifies that if such authority performs a service, which is not in the nature of a statutory activity and the same is undertaken for consideration, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of a taxable service. Thus the circular exempts activities that are mandatory statutory obligations with fees deposited into the Government Treasury. Since the fees collected by APMCs were directed to the Market Committee Fund and not the Treasury, the exemption did not apply.'
The Court further noted that language used in circular of 2006 is clear and unambiguous. Applying the principles of interpretation of statutes, the Court observed that, “It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard” - After carefully perusing the words used in S. 9, the Court stated that the activity cannot be said to be a mandatory statutory activity as contended by appellants since the fee collected is not deposited into the Government Treasury; it will go to the Market Committee Fund and will be used by the market committees. Thus such a fee collected cannot have the characteristics of the statutory levy/statutory fee. Thus, under the 1961 Act, it cannot be said to be a mandatory statutory obligation of the Market Committees to provide shop/land/platform on rent/lease.
Conclusion - The functions of RIICO and RASMB are held to be discretionary functions for commercial purposes. Hence irrespective the roads or compound wall have been constructed for these local authorities, the appellant is liable to pay service tax while providing the said services. There is no exemption available to the appellant while providing such services to any private entity whose interest is nothing except commercial.
There are no infirmity in the findings arrived at by the adjudicating authority below - appeal dismissed.
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2025 (3) TMI 969
Taxability - declared service - amounts received in the nature of “Liquidated damages, forfeiture of security deposits, fines/penalties/Earnest Money deposit, etc.” as compensation for the losses incurred on account of delay on part of the contractors/vendors in completion of the work project etc., amounts to toleration of an act or not - HELD THAT:- In the case of South Eastern Coalfields [2020 (12) TMI 912 - CESTAT NEW DELHI], the Principal Bench of this Tribunal after considering the provision of Section 65B(44) defining ‘service’, Section 66E(e) enumerating the ‘declared services’ and the provisions of Section 67 dealing with the valuation of taxable service for charging service tax and referring to the decision of the Hon’ble Apex Court in the case of Commissioner of Service Tax Vs. M/s. Bhayana Builders [2018 (2) TMI 1325 - SUPREME COURT] and Union of India Vs. Intercontinental Consultants and Technocrats [2018 (3) TMI 357 - SUPREME COURT] and the TRU Circular dated 20.06.2012, held as 't is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards “consideration” for “tolerating an act” leviable to service tax under section 66E(e) of the Finance Act.'
There is no reason to differ with the settled principles of law as enunciated by the decision in the case of South Eastern Coalfields Ltd. The amount recovered by the appellant towards penalty is not a consideration for any activity which has been undertaken by the appellant and as a result there is no ‘service’ in terms of Section 65B(44) of the Act. The facts of the present case do not suggest that there is any other independent agreement to refrain or tolerate, or to do an act between the parties hence the issue is decided in favour of the appellant.
The other issues related to invocation of extended period of limitation, penalty and interest are not required to be gone into as the issue on merits stands decided in favour of the appellant.
The learned Counsel for the appellant has also submitted that in certain transactions, the amounts received in the nature of liquidated damages/forfeited amounts from the contractors located outside India, i.e., in Canada, Hong Kong, Singapore, etc there cannot be any service tax liability on the alleged service of tolerating the act of delay in the hands of the appellant - Since the issue is held in favour of the appellant on merits, it is not necessary to go into the said argument raised by the learned Counsel. The amount received from the recipients located abroad is hereby set aside.
Conclusion - The amounts collected as penalties and liquidated damages do not constitute consideration for any service under the Finance Act, 1994.
The impugned order deserves to be set aside. The appeal is, accordingly allowed.
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2025 (3) TMI 968
Levy of service tax - Business Exhibition Services - business exhibitions conducted by the appellant - doctrine of mutuality - intellectual property service - income received by the appellant under a memorandum of understanding for conducting property - club or association services - membership fees and subscription fees collected by the appellant.
Levy of service tax - Business Exhibition Services - business exhibitions conducted by the appellant - HELD THAT:- Though the exhibition conducted by the appellant is squarely falling under the category of service tax as confirmed by the adjudicating authority, since the participants for the exhibition were only the members and in the absence of any evidence regarding participation of any other person, it cannot be considered as exhibition as provided, and there is no service provided to anyone else in this regard. Regarding the contribution collected from the members since it is collected for the benefit of the members of the association, the decision in the case of State of West Bengal Vs. Calcutta club Ltd. [2019 (10) TMI 160 - SUPREME COURT], squarely covers the issue and hence the demand is unsustainable.
Levy of service tax - intellectual property service - income received by the appellant under a memorandum of understanding for conducting property - HELD THAT:- In the absence of any legally protected intellectual property, the agreement entered by the referred in the impugned order cannot be classified as falling under the category of intellectual property service as per section 65(55b) of the Finance Act, 1994.
Levy of service tax - club or association services - membership fees and subscription fees collected by the appellant - HELD THAT:- The said demand is also unsustainable since the doctrine of mutuality continues to be applicable to incorporated and unincorporated members' clubs even after the 46th Amendment adding Article 366(29A) to the Constitution of India as per the judgment of the Hon’ble Supreme Court in the matter of State of West Bengal Vs. Calcutta club Ltd. [2019 (10) TMI 160 - SUPREME COURT]. Hence demand confirmed as per impugned order under club or association is also unsustainable.
Penalty under section 78 of the Finance Act, 1994 - HELD THAT:- Since the demand as per the impugned order itself is held as unsustainable, the appeal filed by the department is dismissed.
Conclusion - The demands for service tax under the categories of business exhibition service, intellectual property service, and club or association service are deemed unsustainable. The appeal filed by the Revenue regarding penalties is dismissed, as the underlying service tax demands are found to be unsustainable.
Appeal dismissed.
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2025 (3) TMI 967
Benefit of Exemption - applicability of serial no 19 of notification no. 25/2012 dated 20-06-2012 - appellant is providing "Outdoor Catering Services" within a hospital canteen - HELD THAT:- Admittedly, the appellant is running a canteen which is located in the Hospital and the said Hospital is having the facility of air-conditioning. The said canteen was an integral part of the hospital establishment, as in apparent from the agreement entered between the appellant and the hospital. The said mess was required for the purpose of providing meal and other eatables to the patients of the Hospital. This clause of the agreement makes it amply clear that the mess was an integral part of the hospital establishment only.
A perusal of the notification makes it clear that such services are exempt only if no air conditioning or central hearing is provided. In the instant case, it is also noted that the learned counsel has submitted that the hospital was air-conditioned, and the mess being setup for in-patient services, would form a part of the hospital establishment only.
The burden of proving the eligibility to an exemption notification rests on the taxpayer claiming the exemption.
In the instant case, no positive evidence has been led by the learned counsel of the appellant that there was no air conditioning facility in the said mess. In fact, it has been submitted that hospital was air conditioned for the welfare to the patient especially the ICU patients. Consequently, the appellant does not qualify for the service tax exemption.
Conclusion - The appellant's canteen, as part of an air-conditioned hospital, did not qualify for the service tax exemption under Serial No. 19 of N/N. 25/2012-ST. The appellant's failure to provide sufficient evidence to prove the absence of air-conditioning in the canteen led to the dismissal of the appeal.
Appeal dismissed.
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2025 (3) TMI 966
Recovery of service tax on account of differential value arising out of reconciliation of the Trial Balance and ST-3 Returns for the period 2010-11 and 2011-12 under proviso to Section 73(1) read with Section 73(2) of the Finance Act, 1994 - value shown in the invoices towards material cost are to be included for the payment of Service Tax or not - entitlement for exemption under Notification No. 12/2003 dated 01.07.2003 for the materials used in providing 'Repair and Maintenance Service' for sea containers - Extended period of limitation.
Value shown in the invoices towards material cost are to be included for the payment of Service Tax or not - HELD THAT:- This Tribunal had, after appreciation of the facts therein, which are similar to the facts of the present appeal, allowed the appeal in the appellants’ favour, in the case of M/S. BAY CONTAINER TERMINAL PVT. LTD. VERSUS CCE, & ST, CHENNAI [2018 (4) TMI 1035 - CESTAT CHENNAI] where it was held that 'Hon’ble Supreme Court in Jain Brothers [2012 (7) TMI 935 - SUPREME COURT], state that the cost of goods supplied during repair cannot be added to the value of the taxable service in view of the said exemption'.
Subsequently also, the appellants had preferred Service Tax Appeal No.40992/2013 being aggrieved by OIO No.02/ST/COMMR/2013 dated 15.03.2013 passed by the Commissioner of Central Excise, Tirunelveli confirming the demand of service tax made on the allegation of non-addition of the cost incurred by the appellant for replacement/repairs undertaken by them of damaged parts of the containers used in international transportation, in the taxable value - This appeal too was decided in the appellants’ favour by placing reliance upon M/S. BAY CONTAINER TERMINAL PVT. LTD., VERSUS THE COMMISSIONER OF G.S.T. & CENTRAL EXCISE [2019 (3) TMI 2081 - CESTAT CHENNAI].
Service tax demand on the basis of reconciliation of the Trial Balance and ST-3 returns - HELD THAT:- The Adjudicating Authority has not furnished any reason for non-acceptance of the appellant’s reconciliation statement as well as the certificate of the Chartered Accountant that the appellant has relied upon and adduced as evidence for discharge of its tax liabilities with respect to the bills issued from Mumbai office apart from stating that the appellant has not produced evidence to substantiate their claim. The Adjudicating Authority has not recorded any categorical finding as to what exactly are the documents which he desired to see for his satisfaction - the non acceptance of CA certificate and reconciliation statement incorrect, when the demand was only premised on difference noticed during audit upon comparison of their trial balance with the ST-3 returns and that too on material cost, which in any event ought to be excluded in terms of the notification benefit claimed by the appellant - the non-acceptance of the CA Certificate without stating any reason for rejection or controverting it in any manner, is incorrect and untenable and the benefit thereof ought to be extended to the appellants.
Extended period of limitation - HELD THAT:- The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility.” In such circumstances, the Department could not have invoked the extended period of limitation and the Appellants succeed in their appeal on this count also.
Entitlement to the benefit of the notification 12/2003 ibid - HELD THAT:- The appellant was entitled to the exemption under Notification No. 12/2003, as the invoices provided sufficient documentary proof of the materials used in the repair services.
Conclusion - i) The appellant was entitled to the exemption under Notification No. 12/2003, as the invoices provided sufficient documentary proof of the materials used in the repair services. ii) The demand for service tax based on reconciliation discrepancies was unjustified, as the appellant had provided sufficient evidence of tax payment at the Mumbai branch. iii) The extended period of limitation was not applicable, as there was no evidence of wilful suppression or misstatement by the appellant. The penalties imposed under Section 78 of the Finance Act, 1994 were also found to be unjustified.
Appeal allowed.
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2025 (3) TMI 965
Levy of service tax under RCM on the remuneration (salary, commission and perquisites) paid to the promoter (whole-time director/ whole time directors) - non-payment of service tax, considering the services rendered by them to appellant to be in relation to employment - HELD THAT:- The department is not disputing that the Income Tax has been paid on such remuneration/commission under Income Tax Act as salary on the grounds that both the Acts are different and any treatment of an amount under Income Tax Act or Provident Fund has no bearing on leviability of service tax under the Finance Act, 1994.
In an identical situation, the issue as to whether the service tax can be levied on Vice Chairman/Chairman cum Managing Director, who also happened to be shareholder/promoter, this Bench has dealt with the issue in the case of Amara Raja Batteries [2024 (6) TMI 1331 - CESTAT HYDERABAD]. The Adjudicating Authority has mainly contested that there is no employer and employee relationship between the company and whole time director/promoter. Apparently, the Adjudicating Authority has felt that in the absence of any contract or agreement between the Managing Director and the Company to hire or fire, the consideration paid cannot be treated as salary and that it is a settled legal position that the payment of Income Tax and Provident Fund does not absolve the charge of service tax.
The issue of leviability of service tax on Chairman/ Vice Chairman cum Managing Director/ whole time executive directors receiving salary and perks, has been extensively dealt with by this Bench in the case of Amara Raja Batteries.
In addition, various other case laws relied upon by the appellant are also relevant to come to the conclusion that the Managing Director/whole time director, even if they are promoter, are nothing but employees of the Company, as they are engaged in key managerial functions and running day to day affairs of the company as against the independent directors or non-executive directors, who are engaged in providing advisory services. The appellants have clearly discharged their service tax liability in respect of independent directors/ non-executive directors. It is also not in dispute that the Income Tax has been paid by treating this amount as salary income and even Provident Fund has been deducted accordingly.
Conclusion - Remuneration paid to whole-time directors, when treated as salary and subject to income tax and Provident Fund deductions, is not liable to service tax.
Appeal allowed.
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