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Service Tax - Case Laws
Showing 61 to 80 of 151 Records
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2015 (2) TMI 661 - CESTAT MUMBAI
Intellectual Property service - Demand of service tax - Agreement for marketing country liqour - Held that:- For the packing material and essence supplied by M/s Talreja Trade to respondent, proper sale invoices have been issued charging Sales Tax/VAT as applicable. Respondents have also directly purchased packing material and essence from others. - For sale of 'country of liquor' by respondent, proper sale invoices have been issued. In the said sale invoices the name of M/s Talreja Trade (HUF)' is shown as 'selling agent'. - The sale of 'country liquor' have been declared in the returns filed with the Sales Tax Department by the respondent.
On appreciation of the clauses of agreement with the evidence on record, it is evident that no 'Intellectual Property Service' have been given by the respondent. The arrangement/agreement between the respondent and M/s Talreja Trade are for ensuring maximum production and sale of C.L. so as to maximise profits for both the parties. The minimum guarantee of profit per month given or assured by the agent to the respondent have been misunderstood as 'Royalty' which is not the fact. The ground of limitation is also upheld in favour of the respondent. - Decided against Revenue.
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2015 (2) TMI 660 - CESTAT NEW DELHI
Security Agency Services - Manpower Recruitment or Supply Agency - Interest u/s 75 - Penalty u/s 76, 77 & 78 - Appellant are Cooperative Society registered under Rajasthan Societies Act for welfare of ex-servicemen by providing employment to them - during the period of dispute they were providing the services of security agency taxable under Section 65 (105) (w) readwith Section 65 (94) of the Finance Act, 1994 and the service of manpower or recruitment of supply service under Section 65 (105) (k) readwith Section 65 (68) of the Finance Act, 1994 - appellant's contention is that various Cooperative Societies registered under the Cooperative Societies Act of the respective States for welfare of ex-servicemen by providing employment to them are not commercial concern and hence during period prior to 01/05/06 their activity would not attract service tax - Held that:- During the entire period of dispute including the period prior to 01/05/06, the activity of the appellant was taxable under Section 65 (105) (k) readwith Section 65 (68) and Section 65 (105) (w) readwith Section 65 (94) of the Finance Act, 1994. - Following decision of Punjab Ex-Service Corporation vs. Union of India [2010 (9) TMI 871 - PUNJAB & HARYANA HIGH COURT]
Since there was no malafide or intention to evade on the part of the appellant, it has to be held that non-payment of service tax was due to bonafide reason and, hence, invoking Section 80 of the Finance Act, 1994 penalty under Section 76, 77 and 78 have to be waived. - Decided partly in favour of assessee
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2015 (2) TMI 659 - CESTAT MUMBAI
CENVAT Credit - Garden Maintenance service - Nexus with manufacturing activity - Held that:- As credit has been allowed to the appellant in their own case [2012 (4) TMI 499 - CESTAT, MUMBAI], [2011 (11) TMI 56 - CESTAT, MUMBAI] and [2009 (12) TMI 196 - CESTAT, MUMBAI] for earlier period by different Benches of this Tribunal, as a matter of judicial discipline. I have no hesitation in allowing the credit. Accordingly, the impugned order is set aside - Decided in favour of assessee.
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2015 (2) TMI 658 - CESTAT AHMEDABAD
Rejection of refund claim - Bar of limitation - filing of refund application within one year from the end of the quarter in which export was made - Held that:- First appellate authority has dismissed the appeals of the appellant on the grounds of time bar only. Appellant has now brought out CBEC Circular dated 06.7.2009 to argue that one year period will start form the quarter ending as per exemption notification. These aspects were not raised before the first appellate authority. As the arguments taken by the appellant during hearing and as per their written submission received on 24.7.2014 were not argued before the first appellate authority, therefore, the case is required to be remanded back to the first appellate authority. Appellant should raise all the issues before the first appellate authority and Commissioner (Appeals) should dispose of the appeals considering all the issues raised by the appellant during the course of the hearing. Needless to say that first appellate authority will extend an opportunity of personal hearing to the appellant before deciding the matter in remand proceedings. - Decided in favour of assessee.
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2015 (2) TMI 657 - CESTAT NEW DELHI
Payment of commission to overseas agents - Wether covered under Business Auxiliary service - reverse charge mechanism - Held that:- Commission paid to overseas commission agents for promoting sale of their goods is clearly covered under the Business Auxiliary Service and so the appellants are liable to pay service tax under the reverse charge mechanism with effect from 18.4.2006 in terms of Section 66A of the Finance Act, 1994. There are no pleadings to contest this aspect and therefore no further elaborate discussion on this point is required. As regards the plea that only one penalty either under Sections 76 or under Section 78 should be imposed, we notice that, as has been conceded by the ld. AR, the adjudicating authority has imposed only one penalty under Sections 78 and 76 together. Thus in effect, there is only one penalty which is equal to the adjudicated service tax liability which therefore is to be treated to have been imposed under Section 78 ibid. As regards the contention of the appellants that the benefit of reduced (25% of the mandatory equal penalty) under Section 78 ibid should be extended to them as the same has not been extended by the lower authorities. Following decision of Ratnamani Metal Tubes Ltd. [2013 (12) TMI 1397 - GUJARAT HIGH COURT] - penalty under Section 78 will be reduced to 25% of the adjudicated service tax liability provided the adjudicated service tax liability (along with interest) and the reduced penalty (i.e. 25% of the mandatory equal penalty) are paid within 30 days of the receipt of this order. - Decided partly in favour of assessee.
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2015 (2) TMI 615 - CESTAT MUMBAI
Classification of service - providing maintenance and repairs on behalf of M/s. Modi Xerox to the customers - Assessee contends that service would fall under Business Auxiliary service - Held that:- On perusal of the records it transpires that the appellant's contract with M/s. Modi Xerox is termed as a service agreement and it lays down the obligations to be provided by the appellant which includes necessary service of the products assigned by M/s. Modi Xerox. It is also on record that the appellant is billing M/s. Modi Xerox for the services rendered by him in the territory to which he has been assigned. We find that the appellant's contention that they are not covered under the 'repair and maintenance service' is having strong force inasmuch as the certificate issued by M/s. Modi Xerox indicates that they have directly billed the customers, for the repairs and maintenance which has been attended to by the appellant herein. - From a plain reading of the definition of Business Auxiliary Service, we find that there is no clause for taxing the services or providing the services on behalf of the client.
Appellant is providing services on behalf of M/s. Modi Xerox who are his client. This would indicate that the appellant is liable to service tax under 'business auxiliary service' w.e.f. 10.09.2004 to which we were informed by the Chartered Accountant that they are doing so. - impugned order upholding the demands, interest and penalty is unsustainable and liable to be set aside - Decided in favour of assessee.
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2015 (2) TMI 614 - CESTAT MUMBAI
Denial of refund claim - Notification No. 9/2009-ST dt. 3.3.2009 - Since the services were wholly consumed within the SEZ, the department has ordered recovery of the refund sanctioned by the adjudicating authority - Held that:- SEZ Act 2005, under Section 26(i) (e), provides that all services imported into the SEZ to carry on authorized operations in SEZ shall be exempted. Further Section 51 of this Act gives overriding effect over other Acts. This being the legal position, the condition of Notification No. 15/2009 that refund is only admissible to services which are not wholly consumed within the SEZ cannot nullify the overriding provisions of Section 51 of the SEZ Act. The law makes made different schemes, one for granting refund of tax paid on services exported into SEZ and, the other for granting outright exemption to services which are provided to be wholly consumed within the SEZ unit, the recipient is bound to get refund unless assessment at the end of service provider was re-opened and refund was given to the service providers.
Notification no. 9/2009 exempts taxable service provided to SEZ units. Once refund is provided for under this Notification, the provisions of statute under Section 11(B) of the Central Excise Act as made applicable to the Finance Act, 1994 comes into play. Therefore, refund cannot be denied under the Act for procedural infraction of having paid the Service Tax which ought not to have been paid by the service provider. The matter already stands decided in the case of Intas Pharma Ltd. vs. Commissioner of Service Tax, Ahmedabad - [2013 (7) TMI 703 - CESTAT AHMEDABAD] - Decided in favour of assessee.
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2015 (2) TMI 613 - CESTAT MUMBAI
Levy of service tax - Reverse Charge Mechanism - Penalty u/s 76 & 78 - notification no.36/2004 dated 31.12.2004 - Held that:- In view of the notification published in the Gazette of the Central Government on 31.12.2004 and made effective from 1.1.2005, no tax can be demanded from the appellant assessee on reverse charge basis prior to 1.1.2005. We further observe that such payment made by appellant as receiver of service to its agent like gift, foreign trip as well as cash prizes, which are in nature of incentive, shall not form part of gross value of the taxable service. - Decided in favour of assessee.
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2015 (2) TMI 612 - CESTAT MUMBAI
Denial of refund claim - Unjust enrichment - Export of services - Bar of limitation - Held that:- Commissioner (Appeals) that the appellant would be unjustly enriched is not clear to me. - Clearly, the invoices show that the incidence of tax has not been passed on to the customers abroad. Once appellant have discharged the proof of not passing on the incidence of tax, the onus lies on the department to prove that duty incidence was passed. The invoices prove to be contrary and the department has not been able to establish that the duty incidence has been passed on to the customers abroad. In any case, it is a settled matter that the unjust enrichment does not arise in the case of export of services.
On the issue of limitation, the Commissioner (Appeals)'s reliance on Eaton Industries (2010 (12) TMI 71 - CESTAT, MUMBAI) is clearly misplaced. -The provisions of Central Excise Act including Section 11B have been made applicable to Service Tax under Section 83 of the Finance Act, 1994. Therefore, the provisions of Section 11B will apply. - amount for which refund has been claimed was paid in cash on 5.2.2011 and the refund application was filed on 28.7.2011. Therefore, the refund was filed on 28.7.2011. - refund allowed on merit as well as period of limitation - Decided in favour of assessee.
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2015 (2) TMI 611 - CESTAT MUMBAI
Penalty u/s 76, 77 & 78 - Discrepancy was noticed between the turnover reflected in the balance sheet and the turnover in the ST-3 returns - Held that:- From the appeal papers as well as the Commissioner (Appeal)'s order, I find that the appellant claimed before the Commissioner (Appeals) that the discrepancy which resulted in the alleged non-payment of duty is only because of the accounting system. While the balance sheet was prepared on mercantile basis, the payment of Service Tax is reflected in the ST-3 returns is on receipt basis. I note that the correct legal position during the relevant time was that Service Tax was required to be paid only on receipt basis as per Section 77 of the Finance Act, 1994. The learned Counsel pleaded that so called short payment is only about 4% of the total Service Tax paid during the four years in question. In these circumstances, neither was there short payment nor was there any intention to avoid payment of duty. I also find that Hon'ble High Court of Karnataka held in the case of Master Kleen (2011 (9) TMI 788 - KARNATAKA HIGH COURT) that the show-cause notice should not have been issued especially when the appellant paid the Service Tax within a week of being pointed out. The learned Counsel is not contesting the duty demand because he fairly concedes that even though amounts were received later they would have had to pay Service Tax in later years. In view of the facts and circumstances of the case and the Hon'ble High Court judgment in the case of Master Kleen (2011 (9) TMI 788 - KARNATAKA HIGH COURT), I find that no case for imposition of penalty is made out. - Decided in favour of assessee.
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2015 (2) TMI 593 - SC ORDER
Inclusion of amount of Re-imbursement of expenses in the value of taxable services for the purposes of levy of service tax - Company providing consulting engineering services - Petitioner receives payments not only for its service but is also reimbursed expenses incurred by it such as air travel, hotel stay, etc - Supreme Court granted the leave in the appeal filed by the Revenue against the decision of High Court [2012 (12) TMI 150 - DELHI HIGH COURT] - Wherein High Court held that Rule 5 (1) which provides for inclusion of the expenditure or costs incurred by the service provider in the course of providing the taxable service in the value for the purpose of charging service tax is ultra vires Section 66 and 67 and travels much beyond the scope of those sections. To that extent it has to be struck down as bad in law.
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2015 (2) TMI 569 - CESTAT NEW DELHI
Waiver of pre deposit - Valuation of taxable services - inclusion of supply of diesel - Held that:- As per the contract the appellants are required to keep the mobile towers in perfectly operational and ready condition (uptime 99.95%). Ensuring readiness for functionality is different from actual functioning. Readiness for functionality (i.e. uptime) only requires that the systems including generating set are found to be ready to function whenever required. Thus diesel consumption is not required for providing such service but diesel consumption is required for generating electricity. We find that electricity is "goods" and "diesel" is clearly an input for producing electricity by generating sets. Also we find that as per the contract the appellants were required to procure diesel from designated outlets and of specified quality and they were to raise periodical and separate bills for the reimbursement of the cost of diesel which was filled. Thus in a sense it was arguably a case of diesel being supplied by the service recipient. As regards the contention of the ld. AR, with reference to the judgment of Supreme Court in the case of Idea Mobile Communications (2011 (8) TMI 3 - SUPREME COURT OF INDIA) it is seen that the judgement was predicated on the value of SIM cards being insignificant and sales tax department having given up their claim to charge sale tax thereon.
Property in goods (diesel) was transferred to the service recipient before it was consumed for producing electricity and therefore, on that count also, its value was not liable to service tax. We find that in the case of Xerox Modicorp Ltd. vs. State of Karnataka - Manu/SC/0505/ 2005 Hon'ble Supreme Court held that in case of operation of Xerox machines transfer of property in the form of tones/developer take place as the property passes the moment the goods are put in the machine because at that stage they are not consumed but are tangible goods which can pass; they are consumed only after they are put in the machines. - value of diesel is not includible in the assessable value of the impugned service. Accordingly we waive the pre-deposit and stay recovery of the impugned liability during pendency of the appeal - Stay granted.
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2015 (2) TMI 568 - CESTAT BANGALORE
Modification of order - modification of this order on the ground that the appellant has a strong case and further nobody else is paying tax on tours organized for Hajj purpose. It was also submitted by the learned counsel that on 24.2.2014, it was the 7th death anniversary of counsels mother and because of this reason an adjournment application was faxed to the Tribunal. It was also submitted that the case was not figuring in the website of CESTAT and they presumed that there was no sitting on 24.2.2014. On these grounds the modification of the stay order is sought. - Held that:- It is settled law that this Tribunal has no power of review. Modification can be made only if there is an apparent error on the face of the order. In this case, no such error on the part of the Tribunal has been pointed out. Under the circumstances, the miscellaneous applications for modification of the order cannot be considered favourably and accordingly, the miscellaneous applications are rejected. - Modification denied.
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2015 (2) TMI 567 - CESTAT NEW DELHI
Denial of refund claim - Benefit of CENVAT Credit - Held that:- Ground taken by Commissioner (Appeals) in denying the benefit to the appellant is not based on consideration of totality of facts and verification of the Assistant Commissioner of records. It is noted that the company is contributing service tax amounting to ₹ 4 Crore duty and Central Excise Duty amounting to ₹ 70 Crore. No mens rea could be imputed. Further no intention to evade is manifested. It is only a technical error for which substantial right could not be disallowed. Appellant has made a case for refund subject to legal proceedings. - Decided in favour of assessee.
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2015 (2) TMI 566 - CESTAT BANGALORE
GTA Service - Benefit of Abatement - Held that:- Assessee submits that if the abatement benefit is extended, there is no liability on the appellant at all and he also agrees to deposit the interest payable within 12 weeks if the matter is remanded to the original adjudicating authority for fresh consideration of all the issues based on the evidences / documents / records that may be produced by them. We consider that this is to be a fair request. Accordingly, the appellant is directed to deposit an amount of ₹ 10 lakhs within twelve weeks and report compliance before the Commissioner. The Commissioner is requested to adjudicate the matter afresh after noting compliance with the above requirement and after giving reasonable opportunity to the appellant to present their case. - Decided in favour of assessee.
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2015 (2) TMI 565 - CESTAT MUMBAI
Reverse charge liability under GTA Service - Penalty u/s 77 & 78 - Held that:- The judgments cited by the Ld. Consultant are not applicable to the facts of this case. The first judgement of Prince Thermal India Pvt. Ltd. (2010 (7) TMI 248 - CESTAT, MUMBAI) concerned a small tax payer. Judgements in the case of Ruhit Shukla & Associated (2007 (3) TMI 164 - CESTAT, KOLKATA) and Singh Industries Ltd. (2009 (7) TMI 513 - CESTAT, AHMEDABAD) related to initial periods when the levy had just been introduced. Therefore, in these cases a lenient view was taken. However, I do agree with the Ld. Consultant that because cenvat credit of duty paid, in any case have been available to them, their mala fide intention is not established. In this view of the matter the appeal is allowed to the extent that penalty under Section 78 is waived. However, penalty under Section 77 is payable - Appeal disposed of.
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2015 (2) TMI 525 - CESTAT CHENNAI
Levy of tax on interest income - Hypothecation - banking and financial services - No provision under Finance Act, 1994 to tax interest income - Held that:- The financial leasing services and hire purchase of vehicles/machineries squarely falls under the explanation of financial leasing services as defined under Section 65(12) of the Finance Act, 1994. But from the reading of the aforesaid provisions of law and judgment of the Apex Court, it can held that the service tax is the tax on an activity carried out and consideration received for carrying out such activity is only taxable by the Act. Interest being a consideration for the liquidity forgone by the Bank due to lending of the fund, that is not brought within the purview of the Finance Act, 1994 for taxation in absence of any consolidated service charges included in such interest receipt and discernable. No evidence in this regard came to record. - Decided in favour of assessee.
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2015 (2) TMI 524 - CESTAT MUMBAI
Goods Transport Operators - Interest and penalties under Sections 76, 77 & 78 - Held that:- Following decision of Precot Mills vs. UOI [2009 (11) TMI 627 - KERALA HIGH COURT] and CCE vs. Eimco Elecon Ltd. [2010 (7) TMI 477 - GUJARAT HIGH COURT] - demand raised vide show-cause notice dated 09.11.2004 is not maintainable. - Decided in favour of assessee.
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2015 (2) TMI 523 - CESTAT CHENNAI
Waiver of predeposit of CENVAT credit - Capital goods - adjudicating authority has confirmed the demand on ineligible credit on capital goods as well as on input services utilized in various activities and for construction of rest room in the railway yard - Held that:- applicants have used rails, dust separation system, tyre cleaning system etc. in the railway yard. The applicants have also availed input service credit on the construction service for the construction of railway rest room at railway yard. - all the capital goods are installed and used in the railway yard for handling and transportation of coal from the railway yard to the captive power plant. The Hon'ble High Court of Rajasthan in the case of Aditya Cements (2007 (3) TMI 190 - HIGH COURT RAJASTHAN) held that use of materials in the railway track are essential for transporting fuel for manufacture of final product in the plant. As regards the input service, I find that the applicants have availed input service tax of construction service used in the construction of rest rooms in the railway yard which has no nexus to the manufacture of excisable goods. The case law relied by the applicants are not applicable to the present case. Prima facie, the applicants have not made out a prima facie case for waiver of predeposit of entire dues in respect of demand on input service credit. - Partial stay granted.
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2015 (2) TMI 522 - CESTAT BANGALORE
Demand of service tax - Works contract service - Held that:- Nevertheless the adjudication order came to be passed against the appellant since the appellant did not reply to show-cause notice at all and did not attend the personal hearing also. After hearing the appellant and taking note of the fact that appellant is an individual and from the submissions made, it was felt that appellant has got into trouble because of ignorance of law and also peculiar circumstances which were explained in detail. We consider that appellant deserves another chance to defend himself and to make his detailed submissions. Accordingly, the impugned order is set aside and the matter is remanded to the original adjudicating authority to pass an order on merits after following principles of natural justice. - Decided in favour of assessee.
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