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Service Tax - Case Laws
Showing 21 to 40 of 209 Records
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2014 (7) TMI 1048
Self adjustment of excess service tax paid - Refund claim of service tax paid earlier - unjust enrichment - assessee is entitled for self adjustment u/r 6(3) of excess service tax paid - revenue argued that assessee did not opt for provisional assessment u/s 6(4) - appellant has already refunded the excess service tax along with credit bill to its customers. - Period of limitation for self adjustment - Held that:- excess amount of service tax paid by the assessee can be adjusted against his service tax liability for the subsequent period. Only condition for eligibility of this sub-rule is that if assessee has refunded the value of taxable service and service tax thereon to the person from whom it was received. Appellant claims that appellant has refunded the excess S-T to its customers - this sub-rule is applicable not only to the case of excess payment of service which can be made good in subsequent period and bit also to the case where taxable values are not ascertainable for longer period - sub-rule 6(3) is not dependent on provision of sub-rule 6(4). Moreover there is no time limit prescribed under sub-rule 6(3) for making adjustment - Following decision of assessee's own previous case [2014 (7) TMI 830 - CESTAT NEW DELHI] - Matter remanded back - Decided in favour of assessee.
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2014 (7) TMI 1047
Sub-contractor - consultancy services provided to Main architect - Till 15-10-1998, the appellants were paying service tax for the total consideration received by them for such services. With effect from 16-10-1998, services rendered by architects were brought under service tax levy and since then the appellant stopped paying service tax. - Invocation of extended period of limitation - Held that:- The main contention of the assessee is that, the Architects paid service tax on value of services rendered by the appellants. This is a highly unlikely scenario. The burden to prove such payment was on the appellants who were claiming relief from tax liability. No such evidence has been produced - there is nothing on record to show that the architects paid service tax for value of services rendered by the appellants.
Further the Ministry’s clarification is with reference to service rendered by one consulting engineer to another consulting engineer. When the levy on consulting engineers were introduced the stand of the architects were that they were not consulting engineers. In the next Financial Year levy was imposed separately on the service of architects. So there is no reason to consider the impugned services as services rendered through architects as claimed by the appellants. - appellant was registered with service tax authorities and paying tax appropriately upto a particular point of time and thereafter they discontinued disclosure of receipt of consideration from architects without any reason. So the extended period of time is rightly invoked in this case.
Demand to be raised on Partnership firm or Pvt. Ltd. company - Modification of order - Penalty u/s 78 - Held that:- documents showing the conversion of the partnership firm to the Private Ltd. company has not been produced at any stage of this proceeding below the lower authorities - Commissioner (Appeals) has passed orders giving certain reliefs in quantum of tax to be paid. However no specific order for corresponding reduction of penalty imposed under Section 78 is passed. So we direct that the adjudicating authority may determine differential tax liability as per directions of Commissioner (Appeals) and also re-determine the penalty under Section 78 in accordance with law - Decided against assessee.
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2014 (7) TMI 1046
Waiver of pre deposit - service provided to associated enterprises - amendment to section 67 is prospective or retrospective in nature - man-power recruitment and supply services and engineering consultancy services - Held that:- in view of insertion of Explanation (c) in section 67 of the Finance Act, 1994 on May 10, 2008, where the transaction is with any associated enterprises, the service tax on taxable service is liable to be paid as soon as the transaction is entered in the books of account - the transaction of the taxable service with the associated enterprises was entered in the books of account prior to May 14, 2008 and waiting for actual remittances.
Amount in question was not realised till date and was shown in the balance sheet - they have also realised part amount and against which they have already paid an amount of ₹ 1,13,642. Prima facie, the Tribunal had given a detailed finding on the issue of applicability of the Explanation prospectively - applicant has made out a prima facie case for waiver of pre-deposit of the entire amount of tax and penalty - Following decision of Sify Technologies Ltd. [2012 (5) TMI 376 - CESTAT, CHENNAI] and [2010 (11) TMI 232 - CESTAT, CHENNAI] - Decided in favour of assessee.
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2014 (7) TMI 1045
Cargo handling service - Revenue contends that Commissioner travelled beyond SCN - Commissioner while deciding the case relied upon on the work orders which were not covered in the show-cause notice - Held that:- Commissioner has proceeded on the premise that the period and amount in the bills raised tally with the contracts considered by him. He has considered the work orders shown in para 6 of his order despite attempting the fact that he himself agreed there is mismatch of this contract number vis-a-vis the contract number mentioned in the show-cause notice. Moreover, there is no whisper of the contract number mentioned in show-cause notice, by the respondent in their written submission dated October 7, 2009. Therefore, we find that the learned Commissioner has traversed beyond the scope of show-cause notice and this work requires to be examined. Therefore, after setting aside the learned Commissioner's order we remand the matter to learned Commissioner to decide the case afresh - Decided in favour of revenue.
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2014 (7) TMI 1044
Valuation - Franchisee service - Non inclusion of amount of royalty - Held that:- Prima facie, the appellant is liable to include the so-called royalty as part of the taxable value of “Franchise Service”. It has been claimed by the learned counsel that the royalty was collected by the franchisor from the franchisee as part of a profit sharing arrangement, which argument does not appeal to us inasmuch as the royalty is the only consideration specifically mentioned in the relevant agreement as consideration to be paid by the franchisee to the franchisor - royalty referred to in the agreement and actually collected by the appellant from the franchisee ought to have been made part of the taxable value of the ‘Franchise Service’ for the period of dispute - Prima facie case not in favour of assessee - stay granted partly.
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2014 (7) TMI 1020
Classification of service - Works Contract service or erection, commissioning or installation service - nature of contract is pure labor contract or not - Held that:- The appellants have from their records show that almost 31% of the contract value is represented by material value. - The assumption appears to be that in the said Service contract entered into by appellants with Power Grid Corporation of India Ltd., there is no transfer of property in goods. This assumption is based on incorrect appreciation of facts. The records shown by appellants indicate that a significant percentage of the total contract work under the ‘Service Contract' involves material component. Therefore we hold that there is transfer of property in goods involved in the execution of the Service Contract. - Decided in favor of assessee.
The appellants pay Sales Tax/Vat on the transfer of property in the goods involved in execution of the Service contract. Copies of VAT returns have also been placed on record. Therefore, the second aspect that goods in the Service Contract are leviable to tax as sale of goods, is also fulfilled.
Benefit of composition scheme - Held that:- it is quite clear that from 7.7.2009, the Composition Scheme was restricted to such Works Contracts where the value of goods used whether supplied under any other contract, is to be included. The change in Rules is not a mere clarification of the earlier Rules. There has been a clear amendment in law from 7.7.2009. The period of dispute in the case of appellant is from April 2008 to March 2012, and Revenue does not dispute that the contract had commenced before 7.7.2009. Therefore, the amended Rules would not apply in the case of appellant in accordance with the proviso to the Explanation in the amended Rules - appellants have correctly availed the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. - Decided in favor of assessee.
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2014 (7) TMI 1019
Management, Maintenance and Repair Services - Consulting Engineer service - activity of supply of spares, refurbishing and upgradation of air craft and other defence equipments for defence purposes - Held that:- In the case of Management, Maintenance and Repair Services, there are 5 agreements considered. Even in the reproduction of the findings of the Commissioner, it is mentioned that the agreement No. 4 is for upgradation of navigation and weapon system Maintenance Simulator and carrying out the related services according to suppliers Technical Proposal. Sl. No. 5 in paragraph 75 covers upgradation of Sea Harrier. We are unable to understand how upgradation of particular equipment or an air craft can amount to Management, Maintenance or Repair Service - in agreement No. 1 the details of which are not discussed by the Commissioner was for design, development of software, development of detailed engineering, procurement, fabrication of proto type of air craft, development of new aircrafts, training etc. Prima facie we do not find any basis for the conclusion reached by the Commissioner that this agreement is for Management, Maintenance or Repairs.
Matter needs a more detailed consideration of the agreements, the activities undertaken by the appellants in terms of the agreement and the basis for conclusion to classify any of the services in the taxable category. At this juncture it will not the out of place to mention that when an offence case is registered, the burden to prove that a taxable service has been rendered is on the Revenue and it is not of the assessee and in our opinion this burden has not been discharged in respect of both the services in this case
The scope of the service of consulting engineering service is to render any advice on consultancy or technical assistance in any manner. From the definition it appears that the service has to be related to consultancy or technical assistance whereas from the agreement and from the summary of the agreements as reproduced by the Commissioner himself, the appellants are engaged in design, development of software, development of detailed engineering, procurement, fabrication of proto type of air craft. Prima facie, the activities undertaken by the appellants did not appear to be covered by the Consulting Engineers Service - matter remanded back - Decided in favour of assessee.
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2014 (7) TMI 1018
Waiver of pre deposit - Demand of service tax on reverse charge basis - Payment of pre deposit done from CENVAT Credit account - Whether pre-deposit of service tax by a recipient of service as per provisions of section 66A, utilizing Cenvat credit is legally proper - Held that:- credit and its utilization for payment of subsequent liability was making the entire levy of service tax on goods transport agency meaningless because no collection was accruing to the government. It appears that the amendments made in legal provisions were to plug this loop hole - The effect of amendment made in Rule 2(p) w.e.f 01-03-2008 to exclude service of goods transport agency and the effect of Explanation added w.e.f. 01-07-2012 in Rule 3(4) is the same. However, it appears that there is no decision with reference to Cenvat Credit Rules as amended in Rule 3(4) on 01-07-12 by adding Explanation as stated above. In this case Cenvat credit has been utilized for payment of duty liability arising under section 66A of Finance Act, 1994 on service receiver after a specific Explanation prohibiting such use was introduced in Rule 4(4) with effect from 01-07-2012. Therefore, the pre-deposit made is not proper - However, time period for making pre deposit is extended - applicant allowed to reverse the credit already made in Cenvat account for complying with stay order - Decided partly in favour of assessee.
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2014 (7) TMI 1017
Development of land activity - Construction of complex - Held that:- The development of land for township is not covered by the definition of construction of complex service as given in Section 65 (105) (zzzh) readwith Section 65 (39a) and 65 (91a) or by the definition of Works Contract Service in Section 65 (105) (zzzza) w.e.f. 01/06/2007. It is not even disputed that the construction of residential complexes was undertaken by other contractors and not by the appellant. In view of this, the service tax demand from the appellant firm by treating their activity as taxable under Section 65 (105) (zzzh) as ‘construction of complex service’ upto 30/05/2007 and under Section 65 (105) (zzzza) as Works Contract Service w.e.f. 01/06/2007 is not sustainable - Decided in favour of assessee.
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2014 (7) TMI 1014
Denial of refund claim to SEZ unit - authorized operations - Denial on the ground that the appellant has received the Scientific and Technical Consultancy Services which are not related to the authorized operation of the appellant which is in the list - Held that:- as regards non-inclusion of services of Scientific and Technical Services, in the letter dated 20th May, 2010, office of the Development Commissioner, KASEZ, Ahmedabad, at Entry Nos. 37 and 84, of the list, specifically indicated the Scientific or Technical Consultancy Services and technical testing and analysis as services for authorized operation of appellant. It is un-disputed that these services which are rendered by Cadila was in respect of the products manufactured by the appellants, which need study as regards research and analysis and testing. These activities are must for pharmaceutical industry before marketing and/or exporting the final products - reasons given by the First Appellate Authority as well as the Adjudicating Authority for rejecting the refund claim seems to be misconstrued - Following decision of Cadila Health Care Ltd. [2009 (8) TMI 172 - CESTAT, AHMEDABAD] - Decided in favour of assessee.
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2014 (7) TMI 1013
Denial of CENVAT Credit - GTA Service - Whether in respect of clearances from the factory gate directly to the customers the appellant would be eligible for cenvat credit in respect of GTA services availed for transportation of cement upto the customer’s premises - Held that:- the prima facie the definition of ‘place of removal’ in Section 4 of the Central Excise Act, 1944 can be adopted for the purpose of Cenvat Credit Rules, 2004 only in those cases where the final product is chargeable to duty at an ad valorem rate on the value determined under Section 4 i.e. when the provisions of Section 4 are applicable for determining the duty leviable on the goods and the definition of ‘place of removal’ in Section 4 would not be applicable for the purpose of Cenvat Credit Rules, 2004 when the final product is chargeable to duty at a specific rate or of at ad valorem rate, on the value determined under Section 4A or on tariff value fixed under Section 3(2).
Prima facie when the rate of duty on the final product is specific, the definition of ‘place of removal’, as given in Section 4, which is only for the purpose of this section, cannot be adopted for the purpose of Cenvat Credit Rules and in such cases, the place of removal would be the place on removal from which duty is payable on the goods, which in this case, would be the factory gate. Therefore, the Appellant cannot be said to be having prima facie case in their favour and some conditions have to be imposed for safeguarding the interests of Revenue. - stay granted partly.
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2014 (7) TMI 1012
Waiver of pre-deposit - Cargo handling service - whether by way of loading, unloading or transportation or stacking - within the factory premises of RINL these activities would not fall within the ambit of ‘cargo handling service’ - Held that:- The demand under ‘management, maintenance or repair service’ is to the tune of ₹ 98 lakhs, that under ‘commercial or industrial construction service’ is to the tune of ₹ 38 lakhs and the rest of the demand (a little over ₹ 1 lakh) is under ‘manpower recruitment or supply agency service’ - Prima facie, from the description of works, it appears that the first appellant was handling cargo of RINL. This activity was undertaken by way of loading, unloading, stacking etc. and, of course, incidental transportation of the goods also. We are not impressed with the argument that ‘goods’ are different from ‘cargo’.
Incidental transportation of any goods would not per se take out such activities from the purview of the definition of ‘cargo handling service’ - It is not the case of the appellant that they voluntarily disclosed their activities to the department. The departmental knowledge referred to by the learned counsel might be related to visits by the Range Officer to the factory of RINL. But there is nothing on record to show that there was any positive act or gesture on the appellant’s part to disclose the material facts to the department or to communicate to the department that they had ever maintained a bona fide belief against service tax liability. The plea of financial hardships raised by the learned counsel has also been considered. The first appellant is a public sector undertaking and the balance sheet produced by them indicates some losses for the year ended 31-3-2011 - Appellant has no prima facie case on merits - stay granted partly.
Demand of service tax from Sub-contractor - Held that:- There was a circular of the Board, issued in 1997, which also prompted the second appellant to believe that they would not be liable to pay service tax qua sub-contractor. It was only in 2007 that the Board changed the view and clarified that a sub-contractor would also be liable like the main contractor for payment of service tax in respect of a given work. The period of dispute in this case is October 2002 - March 2007. - Full stay granted in respect of sub-contractor.
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2014 (7) TMI 1008
Valuation - Management, maintenance or repairs - Inclusion of the value of material and consumables for the purpose of discharging the liability under the Service Tax - Notification 12/2003-ST - appellants were clearing the goods under a consolidated invoice and uniformly taking 80% of the value of material and consumables and 20% towards the service. - The appellants' contention is that the material and consumables were sold on payment of appropriate VAT hence the value of material and consumables are not to be taken into consideration for the purpose of service tax - Held that:- as per the provisions of the above Notification, there is a condition that there should be documentary proof specifically indicating the value of goods and material sold - There is no separate invoice regarding the sale of goods and material -
The materials used for repair cannot be considered as spare parts, therefore the ratio of the above decision is not applicable on the facts of the present case. - Decision in the case of Wipro GE Medical System Pvt. Ltd (2008 (8) TMI 207 - CESTAT, BANGALORE) distinguished.
The activity undertaken by the appellants is more akin to the activity under consideration in the case of Safety Retreading Co. (2012 (6) TMI 719 - CESTAT, CHENNAI (THIRD MEMBER)), therefore the ratio of the above decision is fully applicable on the facts of the present case - no merit in the contention of the appellants that the value of material is not to be taken into consideration for purpose of service tax. - Decided against the assessee.
Extended period of limitation - Held that:- demand is for the period July 2003 to March 2008 and the show cause notice was issued on 7.10.2008 alleging suppression with intent to evade payment of tax. - in response to queries raised by the Revenue vide letter dated 25.10.2005, the appellants explained their position regarding payment of service tax. - audit raised an objection on 16.12.2006 - the allegation of suppression with intent to evade payment of tax is not sustainable. - the demand beyond the normal period of limitation is not sustainable and set aside. - penalties also waived - Decided partly in favour of assessee.
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2014 (7) TMI 981
Transport of goods from one airport to another - benefit of Notification No.29/2005-St - transport of export cargo from the airport to airport - Held that:- notification talks about providing of the services in relation to transportation of goods while in the case in hand the issue regarding transportation of goods between two air ports and rendered to another agency i.e. FedEx or as the case may be. Since the issue requires deeper consideration and needs to be appreciated from various documents on record, we find that the appellant has to be put to some condition for hearing and disposing the appeal on merit - appellant has not made out a prima facie strong case for complete waiver of the amounts involved - stay granted partly.
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2014 (7) TMI 980
Cargo Handling Service - Service in respect of amounts collected for Barge operations, collection of Ocean Freight, Air Freight, Transportation charges etc. - Non consideration of submissions of assessee - Held that:- Commissioner has left the analytical work to analyse the case of the department, the ground taken in the show-cause notice, reply submitted by the assessee and basis for the conclusion, to the Tribunal - request made by the learned counsel that the matter be remanded at this stage for fresh decision with a direction to record all the submissions, consider them vis-a-vis facts as emerging from the records, apply precedent decisions, if any, cited by the assessee or available to the Commissioner etc. and pass a well reasoned order whereby it would be possible for the appellate authority to consider whether the basis for reaching a conclusion adopted by the original authority is sound and whether the demand can be confirmed or not - Matter remanded back - Decided in favour of assessee.
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2014 (7) TMI 979
Stay application - Waiver of pre deposit - Held that:- Appellant requested for keeping matter pending till similar petition gets decided - There is no logic for such request - appellant directed for 50% amount as pre deposit - Conditional stay granted.
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2014 (7) TMI 978
Club or association service - Whether the amount recovered from the members who opt for membership (with land) towards cost of land and handed over to M/s. Amrutha Estates (according to appellants) has to be levied to service tax under ‘club or association service’ or not - Held that:- If the actual amount reflected in the sale deed is less than what is shown as transferred to the sister company by the appellant, as submitted by the learned AR, it would amount to collection of membership fee in the name of land which would be inappropriate and incorrect in view of the fact that appellants have no grievance about paying service tax for membership fee during the relevant period. That being the situation, in our opinion, it would be in the interest of justice and fairness to require the appellants to produce the sale deeds.
It would be sufficient if the appellants give all the names of members with land who have been provided membership (with land). The Commissioner can select approximately 10% or below at random and in respect of those members if the appellants produce sale deeds and the relevant extracts of books of accounts so that Commissioner can verify and satisfy himself with the amount shown as collected for sale of land and transferred to the sister company is actually equal to the amount reflected in the sale deed - in case appellant is not able to produce a few sale deeds in respect of selected members, Commissioner may select some other name at random - Matter remanded back.
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2014 (7) TMI 977
Waiver of penalty u/s 80 - penalty u/s 77 - penalty under Section 76 & 78 were waived already - Assessee already paid tax but amount was not appropriated - Held that:- merely because the Commissioner did not appropriate the amount, it cannot be said that the amount has not been realized by the Government or has not gone into consolidated fund of Government of India - if an assessee is able to show that he has paid the amount into Government treasury and produces copies of the challans and in the absence of a finding to the contrary taking a view that challans are forged or bogus or refund has been claimed subsequently and received, in such cases we have to take a view that assessee has paid the amount whether it is appropriated by the adjudicating authority or not - what is required to be shown is that the amount has been paid and just because an appropriation has not been made and an officer fails to do this, we cannot take a view against the assessee especially in the absence of an appeal filed by the Revenue - Decided in favour of assessee.
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2014 (7) TMI 976
Validity of revision order - Violation of provision of Section 84 (4) - Held that:- If an issue is pending in appeal, the revisional jurisdiction under Section 84 could not be exercised. Since the appellant had preferred an appeal against the entirety of the adjudication order dated 22.2.2007 which included imposition of penalties thereunder as well and the issue regarding validity of imposition of penalty was equally the subject matter of appellate proceedings pending before the appellate Commissioner since 25.5.2007, the date on which the appeal preferred to that authority had culminated in the order dated 29.8.2007 dismissing the appeal, the initiation of revisional proceedings is unsustainable. - Following decision of Union of India vs. Inani Carriers [2008 (11) TMI 79 - RAJASTHAN HIGH COURT] and C.C.E. vs. Shiva Builders [2011 (4) TMI 34 - HIGH COURT OF PUNJAB AND HARYANA] - Decided in favour of assessee.
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2014 (7) TMI 975
Cargo handling service - providing manpower services - Assessee contends that lifting, stacking and loading of sugar bags’ were done by the persons who were on the pay roll of the Appellant - Held that:- essentially the present demand is for services use for transporting goods within the factory and also for manpower supplied for manual assistance at various points of loading system using conveyer system though there may be a small part of the service which may be in the nature of manual loading of cargo into railway wagons or trucks which may come within the meaning of ‘Cargo Handling Service.’ In the facts of the case the service’, rendered by Appellants cannot be considered as Cargo Handling service in view of the decisions in the case of S.B. Construction Co. [2006 (8) TMI 28 - HIGH COURT OF JUDICATURE FOR RAJASTHAN (JODHPUR)] and Modi Construction Company - [2008 (6) TMI 22 - CESTAT, KOLKATA ].
There is nothing in the Show Cause Notice to even suggest that there was a positive act on their part to suppress or wilfully misstate any facts to evade service tax. Indeed, as is evident from the various judicial pronouncements, there had been confusion regarding what is cargo handling or even as to what is cargo. In the wake of the appellant’s belief that their activity was not cargo handling, their not taking service tax registration or not filing return is understandable. In these circumstances, it is difficult to sustain the allegation of suppression or wilful mis-statement of facts with intent to evade service tax - Decided in favour of assessee.
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