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Service Tax - Case Laws
Showing 61 to 80 of 166 Records
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2014 (9) TMI 674
Restoration of appeal - tribunal dismissed the appeal for non-compliance of order of pre-deposit of 50% amount - Held that:- the condition of pre-deposit of 50% of the Service Tax as directed by the Tribunal stands complied with though belatedly. Keeping in view the totality of facts and circumstances, the delay in deposit of the amount is condoned. - Appeal restored before tribunal.
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2014 (9) TMI 673
Cenvat Credit - GTA - input services - tribunal allowed the credit on outward transportation - Held that:- The Tribunal also relied on observations of the Supreme Court in All India Federation of Tax Practitioners v. Union of India - [2007 (8) TMI 1 - Supreme Court]. The Supreme Court observed that Service Tax and Excise duty are consumption taxes to be borne by the consumer and therefore if credit is denied on transportation service the levy of service tax on transportation will become a tax on business rather than being a consumption tax. The Tribunal observed that the submission of the Revenue that the CENVAT credit cannot be allowed for service if the value thereof does not form part of the value subjected to excise duty runs counter to the fundamental concept of Service Tax laid down in All India Federation of Tax Practitioners’ case. We concur with this analysis. - Credit allowed - Decided against the revenue.
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2014 (9) TMI 672
Classification - billing and accounting work executed by the assessee - Business Auxiliary Services (BAS) or Support Service of Business or Commerce (SSBC) - Held that:- Section 65(104c) of the Finance Act, 1994 defines “Support Service of business or commerce” to mean services provided in relation to business or commerce including inter alia accounting and processing of transactions, infrastructural support services and other transaction processing. In view of the definition of the expression ‘Support Service of business or commerce’ under Section 65(104c) of the Act, we are satisfied that the interpretation of the provision and application of the said provision to the transactions of the respondent-assessee is a fair view of the provision and calls for no interference.
Section 65(104c) of the Act has been brought within the Service Tax net as “Support Service of business or commerce”, by the Finance Act, 2006 with effect from 1-5-2006. The transaction in question relates to the period 1-7-2003 to 30-9-2006. In the circumstances the Tribunal has rightly held that these transactions of the respondent-assessee, since they fall within support service of business or commerce are not liable to the charge of Service Tax for the period anterior to the incorporation of clause (104c) in Section 65 of the Finance Act, 1994 i.e., prior to 1-5-2006. - Decided in favor of assessee.
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2014 (9) TMI 671
Supreme Court has dismissed the appeal against the order of High Court [2011 (1) TMI 790 - KARNATAKA HIGH COURT] wherein, it was held that, the liability to pay service tax by the recipient of service is only from 18-4-2006 - In view of the Circular/Instruction F. No. 275/7/2010-CX8A, dated 30-6-2011, nothing remains in these petitions for our consideration. Dismissed accordingly
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2014 (9) TMI 670
Supreme Court has admitted an appeal against the decision of tribunal [2009 (9) TMI 342 - CESTAT, BANGALORE] wherein it was held that, the decision of the commissioner to collect service tax on the value on which the assessee had already paid State Vat was contrary to the principal of fiscal federalism adopted in the constitution. Thus the demand is not sustainable.
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2014 (9) TMI 649
Levy of penalty for late deposit of service tax - simultaneous penalty u/s 76 and 78 - service tax was recovered from the customers - amount was deposited after initiation of inquiry proceedings - Held that:- Section 68 makes persons providing taxable services to pay Service Tax at the rates specified under section 66. However section 73A is the relevant section to recover Service Tax in the instant case, and not section 68, Section (73A) stipulates that any amount collected as Service Tax is to be paid to the Government forthwith. This has not been done in this case. Surprisingly, Commissioner (Appeals) confirmed payment of interest but set aside imposition of penalties though for both impositions, same principle applied.
A clear reading of sections 76 and 78 reveals that penalty under both the sections is imposable for short payment / non payment of Service Tax. Section 76 is applicable to ‘Any person, liable to pay service tax in accordance with the provisions of section 68 or the rules made under this Chapter, who fails to pay such tax’ similarly Section 78 is applicable for non payment / short payment of service tax for any ‘contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax’. The Chapter mentioned in these provisions is Chapter V of the Finance Act, 1994 which also contains Section 73A. Further Service Tax Rules, 1994 framed under section 94 of the Act regarding collection and payment of the Service Tax are also applicable in the matter as these rules also framed under the same Chapter V of the Finance Act, 1994.
Regarding simultaneous penalty - Held that:- The period involved in the matter is March 2008. It is noted that Section 78 was amended w.e.f. 10.5.2008 to the effect that ‘if penalty is payable under this section, the provisions of section 76 shall not apply’. Therefore, after 10.5.08 only, one of these penalties can be imposed at a time. For the period prior to this amendment, it is noted that the matter was rather debatable and different High Courts have interpreted the issue differently. - Respondent is situated in Punjab and therefore judgement pronounced by Punjab and Haryana High Court which is jurisdictional High Court, has to be followed. Accordingly I hold that both these penalties are not imposable simultaneously even prior to amendment on 10.5.2008 in the jurisdiction of Punjab & Haryana High Court.
Penalty under section 78 which is equivalent to the amount of Service Tax evaded, is imposable from the Respondent along with interest recoverable under section 75 of the Act.
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2014 (9) TMI 648
Business support services (BSS) - customers used their business center in the hotel - Held that:- It is not known for what purpose the business center was used. In the absence of any knowledge as to what are the purposes for which the service was used, how one can reach a conclusion that the service received by the customers of the appellant could be one of the various services listed under support service of business or commerce is difficult to imagine. Basically the responsibility to show that that a taxable event has occurred and service is leviable to tax is required to be proved by the Revenue. In this case obviously it is an assumption on the part of the Revenue that taking print out, photocopying and use of computer fall under the category of BSS. - demand set aside - decided in favor of assessee.
Lapse of cenvat credit - Held that:- In the month of March 2004, a part of the liability was paid by PLA and another part by utilization of credit. In other words, the total tax paid from December 2003 to March 2004 by utilizing the credit comes to ₹ 4,94,494.00. This is actually equal to 35% of their liability from May 2003 to March 2004. There is no rule which says that the credit accumulated during the month should be used in the same month. In fact no time frame has been fixed in the rules. In these circumstances, the utilization of credit to the extent of ₹ 4,94,494/- during December 2003, January 2004, February 2004 and March 2004 is in order and in consonance with Rule 3(5) of the Cenvat Credit Rules, 2002. - demand set aside - decided in favor of assessee.
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2014 (9) TMI 647
CENVAT Credit - inputs and input services - availment of Cenvat Credit on parts of Towers, BTS Cabins etc. - output services being Passive Telecom Infrastructure - demand of interest on reversal of cenvat credit - Held that:- As per Rule 2 (k) (ii) of the Cenvat Credit Rules, 2004 all goods are entitled for Cenvat Credit which are used for providing any output service. In this case nowhere it is disputed by any of the parties that the tower/BTS cabins were not used by the appellant for providing service namely 'Business Auxiliary Service'. Therefore, the Cenvat Credit cannot be denied.
Adjudicating authority has heavily relied upon the decision of Bharti Airtel Ltd. [2012 (4) TMI 362 - CESTAT, MUMBAI]; in the said case the facts are totally different to the facts of the case in hand. In fact in that case appellant was engaged in providing cellular telephone service and as per Board Circular No. 137/315/2007 CX-4 dt. 26.2.2008, it is clarified that no Cenvat Credit on towers and BTS cabin is permissible for Cellular Phone Service Provider. - In the instant case, the towers and the cabins are used by the appellant as Passive Telecom Infrastructure for providing output service namely 'Business Auxiliary Service' as declared by the appellant to the department in 2005 and agreed to by the department in their reply dt. 20.9.2005.
Appellant are entitled for input service credit on towers and cabin, which have been used by the appellant for providing output service under the category of 'Business Auxiliary Service' in the facts of the case. - Decided in favor of assessee.
Levy of Interest on reversal of unutilized cenvat credit - Held that:- The case in hand although the appellant has taken the Cenvat Credit, the same has been reversed on pointing out therefore the facts of this case are similar to the case of Bill Forge Pvt. Ltd. [2011 (4) TMI 969 - KARNATAKA HIGH COURT] and distinguishable from the facts of the case of Ind-Swift Laboratories Ltd. (supra), as in the case of Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - Supreme Court], the Cenvat Credit was taken by the assessee on the strength of fake invoice and credit was not reversed by them but it was recovered by way of demanding duty. Therefore, the said facts are not applicable to the facts in hand. In these terms, we hold that the appellants are not liable to pay interest for wrongful availment of Cenvat Credit which has been reversed before utilization by the appellant - Decided in favor of assessee.
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2014 (9) TMI 646
Referring a matter to larger bench - Rectification of mistake - guidelines laid-down by the Constitution Bench of Supreme Court in Pradip Chandra Parija and Others vs. Pramod Chandra Patnaik and Others [2001 (12) TMI 71 - SUPREME Court] and various other decisions - Held that:- The misc. order dated 09.09.2013 had not per se referred the noticed conflict for resolution by a Larger Bench of five Members. It merely recorded an opinion that there was an extant conflict between three Member Bench decisions and such conflict requires resolution by a five Members Bench. This order directed that the papers be placed before the President, CESTAT, for appropriate orders; after clearly recording the issue on which conflict of opinion existed. It is clear that the 09.09.2013 order expressly and clearly identified the specific issue presenting the conflict and had referred the matter to the President, CESTAT, after recommending that an appropriate case is made out for reference to a Larger Bench.
Misc. order dated 05.05.2014 reframed the issues to be considered the larger bench of five Members. The core issue to be considered for resolution by the five Members Larger Bench was already identified and specified in Misc. order dated 09.09.2013. The order dated 05.05.2014 merely annotated integers of the issue referred for resolution by the Larger Bench while indicating the probable date for consideration of the Larger Bench i.e. around 09.06.2014; and directed that notices be put up on notice boards of advocates associations at all Regional Benches, so as to afford opportunity to other Members of the Bar, to assist the Larger Bench in answering the identified conflict.
The basis for the present applications (seeking review of the misc. applications dated 09.09.2013 and 05.05.2014) is ex-facie misconceived and proceeds on a basic incomprehension of these orders. The CST, New Delhi erroneously assumes that the order dated 09.09.2013 disagreed with the ratio of the Larger Bench in BSBK Pvt. Limited. Clearly, that is not the position.
The issues referred to the larger Bench (of five members) essentially involve critical analyses of several precedents, deep principles of constitutional law, elucidation of allocation of legislative powers in our federal context, interpretation of statutes and unraveling of the meaning of evolving statutory prescriptions in an acutely dynamic legislation - The Finance Act, 1994. In our considered view, such issues are better handled by professional counsel, than AR’s. The CBEC/ Finance Ministry may consider this aspect, as well. - Misc. application dismissed - Decided against the revenue.
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2014 (9) TMI 645
Benefit of credit of service tax - outdoor catering services - Held that:- admittedly outdoor catering services stand excluded from the definition of input services w.e.f. 01/04/11. The appellant had stopped availing the credit when such services were being provided to their regular employees. However, they have taken the credit in respect of the service tax paid on the outdoor catering services being provided by them to the contract labour.
Appellant would become entitled to the service tax paid on the outdoor catering services even in respect of their regular employees in as much as it is also their statutory duty to provide outdoor catering services to their regular employees. However, we find that the dispute only relates to the such services being provided to the contract employees. We further find that there is no such differentiation made in the said exclusion clause in respect of the regular employees or the contract employees - appellant have also not pleaded any financial hardship - Partial stay granted.
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2014 (9) TMI 644
Revision applicable before the Government of India - Levy of penalty u/s 77 for delayed submission of ST-3 return in violation of Section 70 - Held that:- Government observes that the issue involved in impugned case is of delayed submission of ST-3 return in violation of Section 70 of the Finance Act, 1994. Government finds that this issue does not fall in the category of cases mentioned in proviso to Section 35B(1) of the Central Excise Act, 1944 and hence revision application is filed beyond jurisdiction and not maintainable under Section 35EE of the Central Excise Act, 1944. The applicant is required to file appeal before Hon’ble CESTAT. - application rejected.
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2014 (9) TMI 643
Restoration of appeal before CESTAT - tribunal directed to deposit entire tax demanded - At the stage of entertaining this appeal this Court had directed the appellant to deposit 50% of the demand without interest or penalty. It is not in dispute that the order of this Court dated 9-10-2013 have been complied with and the amount concerned has been deposited. - Tribunal to hear appeal on merit.
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2014 (9) TMI 642
High Court has admitted the appeal on the substantial question of law (i) Whether the expenses incurred after sales service is an input service as defined in Rule 2(l) of the CENVAT Credit Rules, 2004? (ii) Whether the CESTAT was right in holding that if after sales service expenses are included in the assessable value, the assessee is entitled for input service credit on the expenses incurred on after sales charges?
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2014 (9) TMI 641
Supreme Court admitted the appeal against the decision of tribunal [2012 (12) TMI 425 - CESTAT, AHMEDABAD] and [2014 (2) TMI 618 - CESTAT AHMEDABAD] involving the issues of Classification of taxable services u/s 65A - Supply of Tangible Goods service u/s Section 65(105)(zzzzj) - Mining of Mineral, Oil or Gas service' u/s Section 65(105)(zzzy) - Survey and Exploration of Mineral, Oil and Gas service
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2014 (9) TMI 640
Supreme Court has admitted an appeal against the decision of Tribunal [2006 (3) TMI 37 - CESTAT MUMBAI] - Tribunal had observed that Construction contract cannot be subject to service tax as consulting engineering service – Work contact cannot be vivisected and part of it subjected to service tax
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2014 (9) TMI 599
Valuation - Goods Transport Agency - inclusion of amount received towards hamaii charges and handling charges - Held that:- We are surprised and pained to note that the appellant in this case though claims that he filed an application for condonation of delay, we find no such application has been enclosed in the typed set of papers or there is no reference in the order of the Commissioner (Appeals) that there was an application for condonation of delay. Even assuming that it is within the condonable period, in the absence of any such application seeking condonation of delay, we fail to see how the Commissioner (appeals) could entertain the appeal. In fact, there was no application even before the Tribunal for the condonation of delay. Hence, we do not find any reason to entertain this appeal. - Decided against the assessee.
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2014 (9) TMI 598
Import of services - programme producer's service - non-residents, were required to produce audio-visual coverage of the cricket matches conducted by BCCI and the digitalized images of the coverage were uploaded for broadcasting for the viewers of the cricket match all over the world. - Held that:- The services received by the appellant, BCCI from the non-resident service providers, namely, M/s. Taj TV Ltd., Dubai/Mauritius, M/s. TWI-U.K.Ltd. London, Nimbus Sports International Pte. Ltd., Singapore, M/s. Hawkeye Innovations Ltd., U.K. and IMG Media, London merit classification under 'programme producer's services as defined in sections 65 (86a), 65 (86b) read with 65 (105) (zzu) of the Finance Act, 1994 and the appellant is liable to pay service tax along with interest thereon on the consideration paid for the services received under the provisions of section 66A of the said Finance Act. However, the services of hotel booking and transportation received from IMG, South Africa do not fall within the scope of the said service and hence demand of service tax on this service under the category of programme producer's service is not sustainable in law. - Decided partly in favor of assessee.
Extended period of limitation and levy of penalty - Held that:- There has been no undue delay on the part of the department either in completing the investigation or in issue of the show cause notices. Further, we observe that though the appellant has claimed bonafide belief, no material has been placed before us, either by way of expert opinion or otherwise, as to the basis for entertaining such belief. - A belief can be said to be bona fide only when it is formed after all reasonable considerations are taken into account as held by this Tribunal in the case of Interscape Vs. Commissioner of Central Excise, Mumbai- I [2005 (9) TMI 192 - CESTAT, MUMBAI] - Appellant has suppressed material facts from the department and hence, extended period of time has rightly been invoked for confirmation of service tax demand. - levy of penalty confirmed - Decided against the assessee.
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2014 (9) TMI 597
Refund claim - issue of taxability - period of limitation - service tax was paid as builder/developer - appellants contended that service was not taxable before 01.07.2010 and therefore they are eligible for the refund. - Held that:- prior to 01.07.2010 the service in dispute in these cases was not taxable - transactions before us where individuals have entered into agreements for purchase of flats/residences with the builder/developers, in our opinion, is not covered by the definition.
Period of limitation of one year where levy is unauthorized and illegal - When the levy is unauthorized or illegal, the refund has to be sanctioned under Limitation Act according to the appellants. - Held that:- It is not a case of payment during investigation and collected as arrears from buyers or customers. It is an assessment made by the service provider in accordance with law, collected by him in accordance with law and deposited with the government in accordance with law. The character of such deposit of the duty or tax does not change just because subsequently it is found that tax was not payable. It remains a tax collected in accordance with law and can be refunded under the provisions of the relevant law. - provisions of section 11B are applicable. - Decided against the assessee.
Claim of refund by the service recipient (buyers) - revenue contended that refund can be made only when the claimant shows that the tax has been paid to the Government. - Held that:- Nowhere we find the word 'government' in relation to the refund claim made by a buyer under the section and Section does not provide that only when there is evidence to show that tax has been paid to the Government refund would be admissible to the buyer of the goods/services. - it is sufficient if the buyer shows that he has paid the service tax to the registered service/goods suppliers/providers and there is evidence to the effect that the service tax has been collected from him by the registered service provider. - Decided against the revenue.
Determination of relevant date for claiming refund - whether the service tax which was assessed by an assessee and paid to the Government can be considered as covered under the provisions of Section 73A at all. - Held that:- the provisions for refund in section 73A of 1994 Act cannot be applicable to the situation where a service tax is collected in a legal manner in accordance with law and paid to the Government in accordance with law under a wrong assumption that service tax was liable to be paid. Therefore the remedy is in Section 11B of the Act and not under Section 73A of 1994 Act. - Decided against the assessee.
Unjust enrichment - Held that:- buyer who is claiming the refund should produce (a) a copy of the Sale Deed to show that he had purchased the property after the agreement ended. (b) Further, he should also show proof that service tax was charged and he had paid the same. (c) Further, at the time of filing the refund claim it should be shown that he had not parted with the property and had not sold it. (d) For this purpose, an Encumbrance Certificate (EC) obtained from the Registrar, which will show that the buyer was in possession at the time of making refund claim would be one of the documents, in our opinion, would be sufficient for the purpose. (e) An undertaking may also be given by the claimants stating that they have not passed on the liability of service tax to any other person and the entire amount of service tax has been paid and borne by them.
Matter remanded back to the original adjudicating authority who shall proceed to decide the matter afresh after giving opportunity to the appellants to present their case in line with the observations made hereinabove. - Decided partly in favor of assessee.
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2014 (9) TMI 596
Classification of service - incidental activity - scope of the contents of agreement - Storage and Warehousing services or not - MIPL is running a container freight station (CFS) - providing space in the warehouses by MIPL - The department was of the view that the provision of space in the warehouses by MIPL came under the category of “storage and warehousing services” and liable to service tax - The appellant contested the demand and submitted that the reservation of space was in the context of cargo-handling of export cargo which was specifically excluded from the scope of “cargo handling service” and hence the demand is not sustainable.
Held that:- It is a settled position in law that the substance of an agreement has to be considered and not the wording used in the agreement as held by the hon'ble apex court in the case of Bhopal Sugar [1977 (4) TMI 151 - SUPREME COURT OF INDIA]. Therefore, we reject the contention of the appellant that the storage and warehousing services rendered by the appellant to specific customers on specific terms and conditions are activities incidental to cargo handling in respect of export cargo and hence not liable to service tax.
From the scope of the levy, as clarified by the Board, which is the apex agency of the Government implementing service tax levy, it is clear that such service rendered by a Container Freight Station is also covered within the scope of the levy. - from the contract, entered into by the appellant, it is seen that the appellant has been undertaking all these activities and therefore squarely come within the definition of storage and warehousing services. Though the clarification issued by the Board is not binding on this Tribunal, it has a persuasive value and should be given due weight. - contention of the appellant rejected - Decided against the assessee.
Storage facility in port is a requirement of law as per section 42 of the Major Port Trusts Act, 1963 and therefore, it forms an integral part of the “port services”, This is not the position obtaining in the case before us. The appellant has not produced any evidence before us that storage and warehousing is a statutory requirement under any law governing container freight stations. The very fact that the appellant is providing the said service only to selected customers on collection of separate charges itself would show that this is not a statutory requirement. - Decided against the assessee.
Extended period of limitation - Held that:- The various charges for handling of cargo was substantially increased as detailed in paragraph 4 (iii) above. This manipulation is very evident. Therefore, the ld. Adjudicating authority rightly observed that the appellant suppressed collection of service charges by manipulation for the period 1-2-2005 onwards and confirmed the service tax demand. The appellant is operating under the self-assessment regime and therefore, it is his responsibility to correctly assess and discharge the tax liability and reflect the transaction in the ST3 returns filed. - Decided against the assessee.
Levy of penalty - Held that:- the penalty imposed under section 76 of the Finance At, 1994 is fully justified in the facts of the present case. However, with respect to the penalty imposed under section 78, in our considered view, the same is not warranted as the issue related to a classification dispute and it is well settled that in classification matters, imposition of penalty is not required. Accordingly we set aside the penalty imposed under section 78.
Demand of service tax with interest and penalty u/s 76 confirmed - penalty u/s 78 waived - Decided partly in favor of assessee.
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2014 (9) TMI 595
Commercial or Industrial Construction Service - tribunal observed that construction of civil structure and reservoir for supply of water to industrial units are covered under ‘Commercial or Industrial Construction Service’ [2013 (9) TMI 517 - CESTAT NEW DELHI] - tribunal have confirmed the demand and penalty invoking the extended period of limitation - SC dismissed the appeal of the assessee - Decided against the assessee.
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