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Service Tax - Case Laws
Showing 1 to 20 of 203 Records
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2017 (12) TMI 1878
Classification of services - Business Auxiliary Services or not - commission or a discount received, as a consideration from airlines - HELD THAT:- The respondent is engaged in the activity of freight forwarding. They are booking cargo in various airlines and pay freight for the same. The said freight is collected from shippers. The airlines pay to the respondent certain portion of such freight as a commission/discount. This is sought to be taxed in “Business Auxiliary Service.”
Similar dispute before Tribunal are noted on various occasions. One such reference can be made to the Tribunal’s decision in the case of COMMISSIONER OF SERVICE TAX, NEW DELHI VERSUS M/S. KARAM FREIGHT MOVERS [2017 (3) TMI 785 - CESTAT NEW DELHI] wherein it was held that brokerage and commission received from various airlines cannot be considered as a commission earned for acting on behalf of the airlines. This is more akin to a discount or incentive provided by the airlines on the freight charges which is on principal-to-principal basis, with no knowledge of the shipper.
There are no merit in the present appeal by the Revenue - appeal dismissed.
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2017 (12) TMI 1876
Refund of excess service tax paid - Reverse charge mechanism - HELD THAT:- The petitioners states that they had made representation dated 16th June, 2015 receipt of which has been disputed by the respondent nos. 1 to 4. There is no need to record any finding regarding the same as the petitioner can file an application seeking refund and it can make all averments and assertions as were made in the representation dated 16th June, 2015.
Recording the aforesaid statement of the petitioner that it would make an application for refund and directing that the same would be dealt with by the first to fourth respondents, in accordance with law, the writ petition is disposed of, without any order as to costs.
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2017 (12) TMI 1820
CENVAT Credit - input services - Rent-A-Cab Service - Outdoor Catering Service - Hotel Charges - Maintenance & Repair Vehicles service - Insurance Premiums Service for workmen - penalty - HELD THAT:- The issue of admissibility of credit of service tax paid on Outdoor Catering Service, Hotel Service and Insurance Premiums for workmen are covered by the judgement of this Tribunal in the case of Ivy Competech P. Ltd., [2015 (9) TMI 1090 - CESTAT BANGALORE] and Mangalore Refinery Petrochemicals Ltd., [2016 (1) TMI 481 - KARNATAKA HIGH COURT], respectively.
Rent-a-Cab - Maintenance & Repair of vehicles - HELD THAT:- In view of the specific exclusion relating to Rent-a-Cab and Maintenance & Repair of vehicles Services after 1.04.2011, the credit availed on these services is inadmissible.
Penalty - HELD THAT:- Since there was confusion about eligibility of credit on the Rent-a-Cab Service, after the amendment, therefore, penalty is not warranted taking credit on the services.
Appeal allowed in part.
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2017 (12) TMI 1743
Benefit of N/N. 12/2003-ST dated 20.06.2003 - Classification of services - Mandap Keeper Service or not - appellant also provides catering facilities to its customers, who uses the mandap owned by the appellant - inclusion of value of food items into the convention services - HELD THAT:- The appellant had demonstrated the charges separately claimed for the mandap keeper service and for providing the catering service to the customers. Hence, the requirements of N/N.12/2003 have been duly complied with and accordingly, the service tax demand cannot be confirmed by clubbing the value of food items sold during the course of providing “mandap keeper service‟.
The appellant should be entitled for benefit of N/N.12/2003-ST. - Appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1716
Denial of liability to pay service tax under "Mandap Keeper's Services" or under the 'Club or Association Services" by assessee, i.e.Club - The petitioner is giving service to its members but the club is formed on the principle of mutuality - HELD THAT:- The issue involved in these cases has been referred to the Larger Bench in the case of STATE OF WEST BENGAL AND OTHERS VERSUS CALCUTTA CLUB LIMITED [ 2016 (6) TMI 476 - SUPREME COURT ].
Let these appeals be also listed before the larger Bench along with the aforesaid matter after taking orders from Hon’ble the Chief Justice of India.
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2017 (12) TMI 1672
Reduced rate of interest - Non-payment of service tax - Real Estate Agent’s service - allegation based on investigation initiated by the officers of DGCEI, Hyderabad Zonal Unit - Held that:- The applicant in his settlement application admitted the entire service tax liability of ₹ 22,53,449/- and paid the same along with interest amounting to ₹ 13,02,901/- - With regard to payment of interest, the Bench observes that the department has not accepted the applicant’s plea for reduced rate of interest on the ground that out of the 5 years period (2011-12 to 2015-16) covered in the notice, applicant’s taxable turnover exceeded rupees sixty lakhs during the year 2013-14, thus making him ineligible for reduced rate of interest at 3% for determination of interest liability.
The Bench observes that in the Finance Act, 2011, the rate of interest leviable under Section 75 of the Finance Act, 1994 for delayed payment of service tax was increased from 13% to 18%. However vide proviso to Section 75 with effect from 8-4-2011, relief in the form of reduction of 3% interest rate was provided to small service providers whose value of taxable services did not exceed 60 lakh rupees in a financial year - The Bench observes that the wordings “does not exceed sixty lakh rupees during any financial year” clearly conveys the meaning that the taxable turnover of a service provider should not exceed 60 lakh rupees in all the financial years covered in the notice to be eligible for the benefit of reduced interest rate. Hence the Bench is in agreement with the department’s stand on the issue and holds that the applicant is not entitled to the benefit of reduced rate of interest inasmuch as out of the impugned period covered in the notice i.e. 2011-12 to 2015-16, applicant’s turnover had exceeded 60 lakh rupees during the financial year 2013-14.
The actual interest liability on the service tax works out to ₹ 13,02,901/- which was also admitted and paid by the applicant at the time of filing Settlement Application. Hence, the Bench holds that the claim for reduced rate of interest made subsequently vide their letter dated 16-6-2017 is without any merits and therefore rejects the same.
Penalty - Held that:- The Bench notes that the applicant had not taken Service Tax Registration and was also not filing ST3 returns during the relevant period and they filed the statutory returns subsequently along with late fee. Non-registration and non-filing of the ST3 returns by the applicant would lead to the conclusion that they have concealed the liability before the assessing authorities and the Bench holds that the applicant is liable for penalty - The Bench also notes that the applicant has made a true and full disclosure of their liability - considering the co-operation extended during the course of proceedings, the Bench is inclined to grant partial immunity from penalty to the applicant.
Prosecution - Held that:- The Bench considers it a fit case for grant of immunity from prosecution to the applicant.
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2017 (12) TMI 1663
Valuation - construction activities - inclusion of value of free supply materials received from the recipient of service which is used in provision of services in assessable value - N/N. 1/2006, dated 1-3-2006 - Held that:- The Tribunal in the case of Bhayana Builders (P) Ltd. v. Commissioner of Service Tax, Delhi [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] examined an identical situation under N/N. 4/2005-S.T., where it was held that the value of free supplies by the service recipient do not comprise as gross amount charged by the service provider and the Explanation under Notification 15/2004 as introduced by N/N. 4/2005 has no implication for such supplies - Appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1653
Branch of Foreign Company - Management consultancy services - charges recovered in respect of the borrowed services from other Mckinsey entities - According to the case of the revenue, the appellant could not provide satisfactory explanation and supportive documents for OPE of an amount of ₹ 35,68,38,421/out of total sum of ₹ 40,82,55,661/for the period between October 1998 to March 2003 - inclusion of core documents charges, borrowed service charges as well as market research charges in assessable value - disallowance of abatement of traveling, lodging and boarding expenses - tax on miscellaneous expenses incurred on items other than traveling, lodging, boarding and described an infrastructural and establishment expenses - tax for payments received in foreign exchange - service tax on expenses incurred in procuring core document and borrowing other services from Head Office and other McKinsey entities for which no recovery was made from clients - expenses incurred on core documents and borrowed service charges of which recovery was made from the client - section 66 of the Finance Act,1994 - time limitation.
Held that:- As per subsection 4 of section 66, service tax can be levied at the rate of 5% of the value of the taxable services. Sub clause (r) of clause 48 of section 65 provides that the taxable service means any service provided to a client by management consultant in connection with the management of any organization in any manner. Section 67 deals with the valuation of taxable service for charging service taxes. Clause (q) of section 67 provides that in relation to service provided by management consultant to a client, the valuation of taxable service shall be on the basis of the gross amount charged by the such consultant from the client for services rendered in connection with the management of any organization in any manner. Thus, the service tax is required to be charged on the gross amount charged by the management consultant to his client.
The case of the appellant is that to enable the appellant to render service to its client, it was necessary for the client to submit necessary data. As the client did not provide the data, the appellant was required to borrow the said data from other Mckinsey entities and other entities. As a matter of fact, the Appellate Tribunal found that no material has been placed on record to show that the data which is procured from other Mckinsey entities was required to be supplied by the client and that due to inability of the client to supply the said data, the appellant obtained it acting as an agent of the client.
As per clause (q) of section 67 of the Finance Act,1994, service tax is payable on gross amount charged by the consultant. Thus, a finding of fact recorded is that the appellant procured data which its clients were not under an obligation to provide. The said data was acquired by the appellant for the purpose of rendering management consultancy services in India. It was used in India for rendering taxable service. Therefore, the amount charged to the client for core documents and other borrowed services is in fact on account of services rendered by the appellant in India. The said amount cannot be said to be payable on account of services rendered abroad. Therefore, we are unable to accept the submission that the taxable event did not occur in India and that the act of denying abatement amounts to invoking extraordinary territorial jurisdiction which is not in existence.
The other contention which was canvassed was that the appellant has merely arranged services of their foreign entities for and on behalf of their clients and the consideration for making such arrangement is already included in the consultancy fees. This contention based on factual assertions has not been canvassed before the Appellate Tribunal - The contention sought to be raised is that the amount recovered from the customers is in the nature of reimbursement of expenditure and not for providing of service. This factual contention is not agitated before the Tribunal as there is no reference to the such contention raised in the impugned Judgment. Therefore, the same cannot be raised in this appeal.
Appeal is dismissed as no substantial question of law is involved.
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2017 (12) TMI 1646
Scope of SCN - Construction of Residential Complexes - liability of service tax on easement rights - only ground of the Revenue is that the impugned order travelled beyond the SCN and held on the taxability of the construction service itself - Held that:- The concurrent findings of the lower authorities on the issue of easement rights and the tax liability was not specifically contested with any substantial ground by Revenue; rather contest is only on other findings not relevant to the SCN - on the service tax demand with respect to consideration of easement rights, the findings by the lower authorities cannot be interfered with either on factual or legal basis - appeal dismissed - decided against Revenue.
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2017 (12) TMI 1615
Maintenance and Repair Services or not? - reconditioning of old and worn out Sugar Mill Rollers - Held that:- An indentical issue was the subject matter of the said decision of the Tribunal in the case of Jagat Machinery Pvt. Ltd. vs. Commissioner [2012 (12) TMI 478 - CESTAT NEW DELHI], wherein it stands held that the activity of re-conditioning of old and worn out shells of Sugar Mills Rollers, shall be liable to service tax only with effect from 16.06.2005.
Time Limitation - Held that:- The entire facts were being placed by the appellant before their Jurisdictional Central Excise Authorities, in which case no malafide can be attributed to them so as to invoke the longer period of limitation.
Appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1609
Business Auxiliary Service - Commission paid to a foreign agents service procured by the appellants - Held that:- Tribunal in one of the same appellants case being M/s. J.P.P. Mills Pvt. Ltd. Vs. CCe, Salem [2017 (10) TMI 750 - CESTAT CHENNAI], where it was held that in as much as the services in question were related to textile processing, as the appellants had exported yarn, they would be entitled to the benefit of Notification No. 14/2004-ST dated 10.09.2004 - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1603
CENVAT credit - capital goods - duty paying invoices - wrong mention of details - the invoices for the capital goods mentioned BSNL, Puducherry Office, whereas the said capital goods have been despatched and utilized in various exchanges and installations of BSNL, various places at Pondicherry - Held that:- Similar disputes came before the Tribunal in the appellant s own case M/S BHARAT SANCHAR NIGAM LIMITED VERSUS CCE, JAIPUR [2017 (5) TMI 896 - CESTAT NEW DELHI], where it was held that In the absence of any allegation of diversion of capital goods for other than intended purpose or their clearance to third party, the Revenue is not justified in denying credit on such capital goods which are admittedly installed and utilized for providing taxable output service - Credit allowed - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1572
Principles of VIAILATIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT - Held that:- Neither anybody appeared on behalf of the appellant nor any adjournment application is filed - It may be mentioned that as per maxim, VIAILATIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT, law helps those who are vigilant and not those who go to sleep - the appeal is dismissed for default.
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2017 (12) TMI 1567
Confirmation of service tax and penalty on deceased person - abatement of appeal as per Rule 22 of the CESTAT (Procedure) Rules - Held that:- In view of Rule 22 of the CESTAT (Procedure) Rules the present appeal cannot proceed and will abate - the present appeal abates on the death of the appellant - demand also abates.
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2017 (12) TMI 1564
Maintainability of appeal - Monetary amount involved in the appeal - Held that:- As per the Board’s Circular F.No.390/Misc./163/2010-JC dated 17/8/2011 as amended by Circular F. No. 390/Misc./163/2010-JC dated 17.12.2015 on Government’s litigation, the Revenue is not suppose to file appeal before this Tribunal, if the amount of duty or penalty or interest involved is not exceeding ₹ 10 lacs. However, case involving the issue of classification and refund of legal and recurring nature was excluded from the litigation policy.
The present case does not involve any such issues - appeal dismissed being not maintainable.
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2017 (12) TMI 1563
Consignment agent - Whether comes under C&F agent service or not? - demand of service tax - Held that:- The consignment agent cannot be treated as C&F agent - confirmation of service tax demand under C&F agent service not sustainable - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1558
Monetary amount involved in the appeal - maintainability of appeal - Held that: - in Boards Circular F.No. 390/Misc./163/2010-JC dated 17.12.2015, the monetary limit for filing of appeals in the Tribunal has been increased from ₹ 5,00,000/- to ₹ 10,00,000/- - Recently, the CBE&C vide Circular dated 1.1.2016 has clarified that the litigation policy shall be applicable with regard to the pending cases also.
In view the fact that the amount involved is less than ₹ 10,00,000/-, the appeal of Revenue is dismissed.
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2017 (12) TMI 1550
Valuation - Inclusion of value of airport taxes/ passenger service fee - Transportation of Passengers embarking in India for International journey by Air Service - Held that: - it is a settled position of law that passenger service fee and airport taxes should not be included in the taxable value - reliance placed in the case of M/s. American Airlines Versus C.S.T., Delhi [2016 (7) TMI 92 - CESTAT NEW DELHI] - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1537
Club or association services - The case of the department is that the respondents are liable to pay service tax on the subscription amount collected from its members - Held that: - The Hon ble High Court of Jharkhand in the case of Ranchi Club Ltd. [2012 (6) TMI 636 - Jharkhand High Court] had analyzed the issue and held that the club is formed on the principle of mutuality and therefore any transaction of the club with its members is not a transaction between two parties and therefore not subject to levy of service tax - demand set aside - appeal dismissed - decided against Revenue.
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2017 (12) TMI 1506
Release of Bank Guarantee - Petitioners took the stand that they are not to liable to pay the service tax for the period prior to 1st June 2007. It is for that reason that instead of paying service tax under protest they furnished a BG in favour of Respondent No.1 - Held that: - If the AAI (Airports Authority of India), on its own, deposited the service tax with the Central Government, the AAI would be entitled to refund thereof in accordance with law - the Court is of the view that there is no justification for Respondent No.1 to continue retaining the BG issued in its favour. Accordingly Respondent No.1 is directed to forthwith return to the Petitioners BG No. PBG 2007/70029 dated 16th February 2008 issued in its for a sum of ₹ 70 lakhs and, in any event, not later than 30th September 2017 - petition allowed.
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