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Service Tax - Case Laws
Showing 61 to 80 of 204 Records
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2017 (12) TMI 1202 - CESTAT MUMBAI
Penalty - non-payment of service tax - case of appellant is that since the levy of service tax was not clear and the issue has been subject matter of disputes in many cases, therefore the Appellant could not pay service tax - Held that: - the intention of the assessee towards non payment of service tax is whether due to dispute about levy or confusion has to be looked into by observing the facts of the each case - The demands of the extended period can be invoked only when there is ingredients of fraud, suppression or malafide intention on the part of the assessee for non-payment of tax. On the other hand the penalty can be waived only by taking recourse to section 80 of the Act.
It is proper to remand the case to the adjudicating authority - appeal allowed by way of remand.
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2017 (12) TMI 1200 - CESTAT MUMBAI
Penalty u/s 76, 77 and 78 - non-payment of service tax and non-declaration of the same - Held that: - appellant were neither paying service tax correctly nor even declaring in the ST-3 returns - It is observed that if at all appellant had any bonafide intention, though they had not paid service tax in time, they could have very well declared taxable value in their ST-3 returns, they failed to do so, this clearly shows that appellant had pre-determined mind not to pay service tax hence suppressed of facts from the department. Only after detection of the department, appellant have come forward and paid service tax. Therefore intention to evade payment of service tax established.
There is suppression of facts regarding non-payment of service tax with the department, therefore ingredient required for imposing penalties u/s 76, 77 and 78 indeed exist - penalty upheld - appeal dismissed - decided against appellant.
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2017 (12) TMI 1197 - CESTAT MUMBAI
Nature of transaction - Sale or service - Franchise service - case of appellant is that they are not covered under the said service as they have not granted any representational rights to their client. They argued that they are involved in supply of beverage vending machine bearing name ‘BEVERAGE EXPRESS’ to various clients - time limitation - interpretation of the term 'Franchise'.
Held that: - In the instant case the appellant are giving machine containing their company logo, which may be illuminated, affixed on the said machine. The said machine in terms of agreement is required to be placed in such manner that the logo/illuminated logo is clearly visible - significant importance has been given to the display of logo/advertisement and other indication/mark affixed on the machine. There are clauses that prohibit appellant from the obstructing/defacing or removing the same from the said machine. The agreement also prohibits adding any other logo, mark (other than agreed and approved by the appellant. Agreement also prohibits the appellant’s clients from moving or removing machine from its original place of installation without prior approval of the appellant. Clause in agreement show that clients are required to keep illuminated sings on the machine, if any, illuminated all the times. The article 6 of the said agreement prescribed that franchisee shall not have any right, title or interest in the appellant’s trade mark/trade name/logo. Aforesaid agreement also prohibits franchisee from selling any other beverages from the vending machines in terms of clause (b) of Article 3 of agreement. In fact as per clause (e) of Article 3, the appellant or its nominee only have right to refill, reload the raw material in the vending machine. In terms of above condition of the agreement itself apparent that the appellant have granted representational right to the franchisee. To any person wishing to have beverages, it would appear that he is buying beverages from the appellant and not from the franchisee as it is the appellant’s name that appears on the machine and same is prominently displayed on the machine. The raw material used also appearing the brand name of the appellant. To a person purchasing the beverage from the said vending machine it would appear that he has buying the same from the appellant through franchisee. In this circumstances, it cannot be denied representational rights have been granted to the franchise by the appellant - demand upheld under franchise service.
The next issue raised by the appellant related to fact that they are paying sales tax/VAT on the said transaction under the category of transfer of rights to use as deemed sale and therefore no service tax can be demanded on the said transaction - Held that: - It is not for this Tribunal to decided if the liability under sales tax arises or not. This tribunal can only adjudicate if the liability under service tax arises or not. In this regard appellant argument that they have paid sales tax is of no avail.
Time limitation - appellant claim is that that they have paid sales tax on the same transaction therefore there was no intention to evade duty - Held that: - mere fact of payment of sales tax is not sufficient to hold that they are not liable to service tax - extended period to be invoked.
Penalty - appellant claims that there was no intention to evade payment of duty therefore penalty should not have been imposed - Held that: - it is apparent that when the agreement was drafted appellant themselves believed that they are granting franchisee rights. In this circumstances failure to take responsibility and pay duty can only be attracted intention to evade - penalty upheld.
Simultaneous penalty u/s 76 and 78 - Held that: - It is seen that entire period of dispute is prior to 16-5-2008, when Section 78 was amended - matter placed for de novo examination.
Valuation - Held that: - cum tax benefit needs to be extended to the appellant.
Appeal is dismissed except on the ground of granting cum duty benefit. Matter is remanded to the Adjudicating authority to calculate cum duty benefit and rework the penalties accordingly - part matter on remand.
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2017 (12) TMI 1194 - CESTAT MUMBAI
Works Contract Service - transmission and/ or distribution of electricity - benefit of N/N. 45/2010-ST dt. 20.7.2010 - CBEC Circular No. 123/5/2010-TRU dt. 24.5.2010 - Held that: - N/N. 45/2010-ST dt. 20.7.2010 issued under Section 11C of the Central Excise Act, 1944 exempts for the period upto 26th day of February 2010 for all taxable services relating to distribution of electricity. Vide N/N. 11/2010-ST dt. 27.2.2010 the taxable services provided for transmission of electricity have been exempted - From the above, it is apparent that any services provided for transmission of electricity are exempted for the entire period. The services provided relating to distribution of electricity are exempted upto 21st day of June 2010 and all services relating to transmission of electricity are exempted upto 26th day of February 2010 in terms of N/N. 45/2010 read with N/N. 11/2010-ST. - The order in so far as it relates to the service provided in respect of transmission and distribution of electricity is set aside and the matter is remanded to the Commissioner for fresh adjudication after examining all the contracts individually for this purpose.
Benefit of N/N. 1/06 - appellants failure to provide the necessary documentary evidence in support of the claim that fulfill the condition of the notification - Held that: - The appellant has contended that both these conditions can be verified and returns filed by them and by the invoices issued by the appellant itself apparent that these conditions can easily be verified and the Commissioner has not examined the issue in proper perspective and has simply dismissed the defense without application of mind - matter is remanded to the Commissioner.
Abatement in respect of GTA service - N/N. 32/04-ST - denial on account of appellant failure to submit the necessary documents - Held that: - The Revenue has prescribed procedure in this regard wherein GTA service recipient can make necessary declaration and on that basis abatement under N/N. 32/04-ST is allowed. The appellant has not followed the said procedure which has been prescribed vide F. No. 166/13/2006 CX.4 dt. 12.3.2007, wherein CBEC has clarified that if the service provider makes a declaration on the consignment notes then the said declaration would be accepted. It is seen that the appellant have neither followed that procedure nor made any attempt to satisfy the said notification. In these circumstances appeal filed by the appellant cannot be entertained - appeal dismissed.
Appeal is partly allowed by way of remand and partly dismissed.
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2017 (12) TMI 1193 - CESTAT MUMBAI
Franchise service - representational rights - Held that: - the preliminary purpose of the agreement would clearly be the grant of rights to use the premises and/or equipment. The said agreement according to Revenue in Clause (10) contains certain conditions which have been relied by Revenue to assert that they turn into the transaction of supply of Franchise Service - After the said clauses, we are unable to find any merit in the argument of the Revenue. The said clause nowhere grants representational rights to the dealers. In fact, the said agreements in various clauses set out the terms for the petroleum products of equipment and premises and there is practically nothing in the agreement which can be termed as grant of representational rights.
Revenue has relied solely on Clause(10) of the said agreement which in our opinion does not grant in representational rights - Appeal dismissed - decided against Revenue.
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2017 (12) TMI 1191 - CESTAT MUMBAI
Non-payment of service tax - receipt of advance from their customer which were later adjusted against the bills received on completion of stages of the contract - liability of interest - Held that: - In case of Advance receipt from the customers, the amount was received by the assessee as security/ guarantee amount. It is obvious that for big contract which spread over years, the service provider needs to have specific performance guarantee from their customer. The assessee in turn of such security amount has issued Bank Guarantee amount to their customer. We find from the contract with Chettinand Cement Corporation Ltd.,produced by the Appellant that it provides for Advance cum security and in turn the assessee is liable for equal amount of Performance security bank Guarantee. Thus the amount is guarantee from both the sides. Such amount cannot be considered as advance receipt since it is normal feature of contracts.
There is no doubt to our mind that the advance cum security bank guarantee to the assessee by the contract awarding party is in the form of earnest money. Thus the same is not liable to tax. It is also found from the certificate issued by the Chartered Accountant that the aseessee has discharged service tax liability on the entire amount of such advances. We thus find no reason to hold that the said amount is liable to be taxed at the time of receipt.
Demand on retention money - Engineers sent abroad - export of service - Held that: - it is not in dispute that the services were rendered abroad. It is also not in dispute that the main contractor of the assessee received the consideration in foreign currency who in turn made payment to the assessee. In such case we find that the services rendered by the assessee falls under the Export of service which is eligible for exemption from service tax - assessee is not liable for payment of service tax on services rendered abroad.
Appeal dismissed - decided against Revenue.
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2017 (12) TMI 1190 - CESTAT MUMBAI
Sale of Packaged Software - demand on the ground that during impugned period 01.04.2006 to 15.05.2008 and 27.02.2010 to 31.03.2011 their services were not taxable and hence the amount recovered from customers representing service tax is liable to be paid in terms of Section 73A (2) - Appellant had claimed that they have discharged the service tax liability from their cenvat credit account which accrued to them as a result of service tax charged by their suppliers and nothing remains to be paid - Held that: - the claim of the Appellant regarding eligibility to claim cenvat credit and actual availability of cenvat credit to them remains to be verified against their service tax liability which has not been verified by the revenue. In such case if the Appellant is able to show that they had received cenvat credit charged from their suppliers which utilized for payment of their service tax liability in that case there cannot be any demand against the Appellant - case remanded to the original authority for denovo consideration - appeal allowed by way of remand.
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2017 (12) TMI 1189 - CESTAT MUMBAI
Authorised Service station - activity of servicing/ repairing of vehicles undertaken by the Appellant for customers - whether in the given facts the Appellant can be taxed under the category of Authorised Service station? - Held that: - only for the reason that the Appellant was using job cards bearing brand name of M/s Tata the Appellant does not become authorized service station of M/s Tata.
The adjudicating authority has reached to conclusion that the Appellant are deemed authorized service station by quoting the clause of agreement between M/s Tata and M/s Pandit Automotive. We however find that none of these clause implicate Appellant as service provider to M/s Tata or that M/s Tata has approved the Appellant as jobber of M/s Pandit Automotive. Only for the reason that the stationary or software of M/s Tata or that M/s Tata were not concerned with Appellant working for M/s Pandit Automotive would not lead to situation that the Appellant has stepped into the shoes of M/s Pandit Automotive. Clearly in case of servicing and repairing of vehicles for which the Appellant billed the vehicle owners could not have been under the banner of M/s Tata which was not concerned with such activity.
The Appellant is neither the agent of M/s Tata nor they have acted on behalf of M/s Tata. In such case the Agency by Estoppel cannot be applied in the present case.
It is fit to remand the matter back to the adjudicating authority for Denovo consideration who would decide the case on merits as well as time bar aspect - appeal allowed by way of remand.
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2017 (12) TMI 1188 - CESTAT MUMBAI
Classification of service - site formation, clearance, excavation and earth moving service or Cargo Handling Service? - benefit of N/N. 17/2005-ST dated 7-6-2005 - Held that: - we find that loading, unloading and transportation is ancillary, there are various other activities where main service such as quarrying, excavating, sizing, stockpiling, over burden removal, dozing etc., therefore it cannot be said that service provided by the respondent is mainly transportation, loading, unloading therefore this being ancillary service to the various other main services, overall services cannot be classified as Cargo Handling Service - once the departments proposal of classification fails entire show cause notice is liable to be quashed.
Services involved is correctly classifiable under Site Formation and clearances, excavation and earth moving and demolish service provided for construction of road of National Highway, the same is exempted under N/N. 17/2005-ST dated 7-6-2005.
Appeal dismissed - decided against appellant.
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2017 (12) TMI 1184 - CESTAT MUMBAI
Refund claim - services consumed in SEZ unit - N/N. 17/2011-ST dated 1.3.2011 - denial of refund on the ground that there were no nexus between the services and the operation carried out in the SEZ - Held that: - In absence of proper enquiry being conducted to bring out that the service was not utilized or the evidence adduced was insufficient nor there was any evidence, it is not possible to be appreciated that the appellant was disentitled to the benefit of refund.
The flimsy plea of Revenue is also that the invoices were in the name of head office and tours were not verifiable as well as certain invoices were not relatable do not base on any enquiry result for which allegation of Revenue without discharging its burden of proof fails to stand. Further, stand of Revenue does not seem to be substantiated without any cogent or credible evidence brought to record. We may make it clear that we have not read the show cause notice hypertechnically but minutely.
Taking note of method of approach of learned adjudicating authority to law, failing to examine relevant evidence, without causing enquiry wherever needed as well as improper evaluation of evidence and having suspicion on the appellant, his order is set aside - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1173 - CESTAT CHENNAI
Abatement - maintenance and repair service - Case of Revenue is that as no sale of materials have taken place, the respondents are not eligible for abatement as per N/N. 12/2003-ST dated 20.6.2003 - Held that: - It is not disputed that the respondents have discharged the sales tax on the works contract under section 7C of TNGST Act, 1959. So also they have informed the department vide letter dated 19.3.2005 addressed to the Assistant Commissioner of Service Tax, Chennai that they have proper inventory system to arrive the value of material sold to each customer - respondents having discharged the sales tax on 70% of the contracted value, they are eligible for abatement as per the notification - appeal dismissed - decided against Revenue.
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2017 (12) TMI 1166 - CESTAT NEW DELHI
Refund of service tax paid - duty paid under protest - construction of complex services - the appellant claimed that no Service Tax liability can be fixed on the appellant again as they have not provided any construction services - Held that: - If the construction activity is in effect carried out by the contractors in terms of an agreement with the appellants, it will be the contractors who will be considered as service providers. The appellant will be service recipient. The appellants monitor the construction and managed the allotment and sale of these constructed houses. In our opinion, this by itself does not make the appellant as a provider of construction service. This aspect has not been examined by the lower authorities - matter placed on remand for re-examination.
Unjust enrichment - Held that: - if the appellant collected the cash and kept with them, the bar of unjust enrichment will apply - As stipulated in the legal provisions of section 11B of the Central Excise Act 1944 made applicable to Service Tax, the question of unjust enrichment may also be examined afresh by the original authority.
Appeal allowed by way of remand.
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2017 (12) TMI 1158 - CESTAT MUMBAI
Constitutional validity of levy of service tax - construction of residential complex - Held that: - Honble Mumbai High Court in case of Maharshtra Chamber of Housing Industry [2012 (1) TMI 98 - BOMBAY HIGH COURT] held the levy to be constitutional. Thus following the judgment of Honble High Court, the Appellant is liable to pay service tax alongwith interest.
In the instant case the service tax demand alongwith interest is payable by the Appellant and the same stands paid before issue of SCN - penalty set aside - appeal allowed in part.
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2017 (12) TMI 1152 - CESTAT MUMBAI
Classification of service - contract with Corporation City of Panaji for Beautification and Landscaping of Panaji Municipal Garden - whether the activity would fall under the head Management, Maintenance and Repair Service or construction service? - Held that: - From the contract, it is found that the appellant undertook construction and extension of Garden of Panaji City of Caranzalem, which involved land Development and construction of drainage, construction of compound wall, developing symmetrical garden, pathways, promenade, function lawn, etc. These activities predominate civil construction work and also comprise of activity akin to clearing and excavation and site formation. However, the majority of work relate to civil work in the nature of either fresh construction of a civil structure within the park like drainage system, pipes/conduits or renovation of civil structure (where old structure are reinforced and retained). The essential character of this composite work is reflected as that of construction service - instead of "Management, Maintenance or Repair Service, this service is appropriately classifiable under 'Commercial or Industrial Construction Services'.
Further, since this service is being provided to Corporation of the City of Panaji, which is a local government body, it cannot be said that the construction work is of commercial nature. It is a settled law that construction service provided to government and government bodies are outside the purview of the 'Commercial or Industrial Construction Services'.
Demand set aside - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1147 - CESTAT NEW DELHI
Refund claim - taxable service used/utilised for export of the goods - denial on the ground of time limitation - Held that: - It is apparent from the records that the refund claim applications were not filed within the prescribed time limit of one year provided under the N/N. 41/2012 dated 29.6.2012. Since, the said notification is conditional and the benefit contained therein are available, subject to fulfilment of the conditions itemised therein, the assessee has to strictly comply with the requirement contained therein for availing the benefit of refund of service tax. Thus, the time limit prescribed in the notification cannot be considered as procedural in nature - appeal dismissed - decided against appellant.
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2017 (12) TMI 1146 - CESTAT MUMBAI
Taxability - deputation of staff to group companies - appellant claimed that service by deputing staff to their group companies does not amount to provision of service, therefore it is not taxable - Doctrine of Mutuality - Held that: - the fact whether the so called group companies are related companies or otherwise need to be ascertained. It is necessary to ascertain the constitution of each so called group company on the basis of share holding pattern. It is observed that the adjudicating authority has not verified such facts - we remand the matter related to the above issue to the adjudicating authority to pass a fresh order.
Health and fitness centre service - Held that: - appellant have been paying service tax under the category of club or association since 2005. It is the submission of the appellant that since this service was considered under the club or association, the same cannot be taxed under different category for the period prior to 16-6-2005, when services of club and association was brought under the tax net - adjudicating authority also directed to reconsider this issue on submission made by the appellant in this regard.
Appeal allowed by way of remand.
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2017 (12) TMI 1144 - CESTAT MUMBAI
Calculation of Refund of accumulated CENVAT credit - N/N/. 5/2006-CE(NT) dated 14/03/2006 - Held that: - the adjudicating authority wrongly calculated the refund amount taking the Cenvat Credit amount after deduction of the utilized Cenvat Credit, which is not in conformation of the formula provided under N/N. 05/2006 - the appellant’s claim of the refund of ₹ 10,01,451/- appears to be correct.
The adjudicating authority directed to reprocess the balance refund - appeal allowed.
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2017 (12) TMI 1143 - CESTAT MUMBAI
Manpower Recruitment and Supply Agency service - employees on deputation - the personnel on the pay roll of Schaeffler Group company located abroad have been put on assignments with the appellants. On these assignments, the personnel were expected to work under overall supervision of the appellant - Held that: - The employees deputed to appellant continues to be an employee of the foreign associated company, though suspended for this duration - It is also seen that the duration of such deputation is decided in consultation with the foreign associated company and the employee is not free to decide on his own.
It can be seen that there are regulations in the foreign assignment guideline for the Schaeffler Group of companies and they apply to such assignments. It is apparent that the said foreign associated companies are engaged in the regular practice of supplying manpower and have also evolved guidelines to regulate such foreign assignments in the shape of version 4/2008.
The foreign associated company has totally involved in all aspects of the deputation of its own ‘suspended’ employee - service tax is rightly levied.
Extended period of limitation - revenue neutrality - Held that: - If the situation is revenue neutral, in the sense the tax paid by appellant themselves, in full, on reverse charge basis then the intention to evade cannot be alleged. The fact regarding the revenue neutrality needs verification.
Appeal dismissed on the point of merits - the matter is remanded to original adjudicating authority to give findings on the issue of revenue neutrality and it’s impact on limitation and penalties.
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2017 (12) TMI 1142 - CESTAT MUMBAI
Condonation of delay in filing appeal - applicant claim that provisions of Section 14 of the Limitation Act, would apply to the facts of the present case and hence the period during which the writ/appeal pending before Hon’ble Bombay High Court should be excluded for calculating the period of limitation for filing the appeal of the cross-objection - Section 35B (3), (4) & (5) of CEA.
Held that: - Tribunal has been granted the power to condone the delay if it is satisfied that there was sufficient cause for not presenting the appeal within the period prescribed under Sub-Section 3 of Section 35B of Central Excise Act. It is also seen that no upper limit has been prescribed for condoning the delay in filing the appeal provided sufficient cause is shown for not presenting the appeal within the prescribed period.
Hon’ble Apex Court in the case of Ketan V. Parekh Versus Special Director, Directorate of Enforcement and another. [2011 (11) TMI 62 - SUPREME COURT OF INDIA], has interpreted Section 29(2) of the Limitation Act, by observing that wherever the law prescribed a complete code prescribing time limit as well as power of condonation like an upper limit for condonation of delay or grounds of condonation, the law of limitation cannot be invoked to by-pass the same.
In the instant case, laws of limitation cannot be invoked as we are dealing with a complete code prescribed under Central Excise Act, where not only the period of limitation is prescribed but also the grounds on which condonation can be granted are prescribed. However it is seen that, as against the provisions examined in para 4 above, there is no upper limit for period of condonation in the instant case. Thus there is no necessity to invoke the provisions of the Limitation Act, so long as the reasons of delay are covered by the provisions of law.
Whether there was reasonable cause for delay? - Held that: - when various High Courts had taken a clear stand on the issue the appellants approach to Hon’ble High Court on the same issue of pre-deposit was not with clean hands. Even after the decision of Hon’ble High Court was received the appellants delayed the filing of appeal for a long time. This shows the callous approach.
Application for COD dismissed.
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2017 (12) TMI 1135 - CESTAT ALLAHABAD
Valuation - inclusion of reimbursement of expenses - Clearing and forwarding agency service - Circular F. No. B. 43/7/1997-TRU dated 11/07/1997 - Held that: - the issue covered by the decision in the case of M/s BALMER LAWRIE & CO LTD Versus CCE, RAIGAD [2013 (11) TMI 712 - CESTAT MUMBAI], where it was held that In case where the Cargo Handling Service and transportation services are rendered, and if in the bills raised for the services rendered, transportation is shown separately (on actual basis, verifiable by documentary evidence), the tax would be leviable only on the Cargo Handling Charges - the appellant have rightly discharged the service tax and we take notice of the fact that on the GTA service, the recipient or the principal of the appellant have discharged service tax on reverse charge basis.
Demand of service tax, again on the same transaction from the appellant is bad in spite of the Department accepting the service tax paid by the recipient of service on reverse charge basis.
Appeal allowed - decided in favor of appellant.
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