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Service Tax - Case Laws
Showing 21 to 40 of 205 Records
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2017 (4) TMI 1228
Maintenance and repair service - appellant did not discharge service tax liability attributable to such taxable service - time limitation - Held that: - the appellant had no intention to evade the payment of service tax. Proviso to Section 73 (1) cannot be invoked in such a case. The impugned order confirms that the elements of Section 73 (1) is absent in invoking extended period. Therefore, impugned order confirming the service tax demand beyond the normal limitation period is not sustainable - demand beyond normal period set aside - appeal allowed - decided partly in favor of appellant.
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2017 (4) TMI 1227
Club or association services - appellant received some donation from the members towards the building fund but did not discharge the service tax on such donation amount - case of appellant is that the amount received against “building fund” has no nexus with any service provided by the appellant as a club towards its members since payment of donation is not compulsory - Held that: - Since the donation amount does not present any additional facilities or relating to the membership in the club, the same has no nexus with the taxable service provided by the appellant - the service tax demand on the donation amount cannot be sustained - appeal allowed - decided in favor of appellant.
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2017 (4) TMI 1226
GTA services - reverse charge mechanism - failure to pay tax during the period 01.01.2005 to 31.03.2008 - Held that: - the goods transport service availed by the appellant is not conforming to the definition of GTA service for the purpose of payment of service tax by the appellant under reverse charge mechanism - in an identical situation this Tribunal in the case of Nanganj Sihori Sugar Co. Ltd. [2014 (5) TMI 138 - CESTAT NEW DELHI] has held that service tax demand cannot be confirmed under GTA service - appeal allowed - decided in favor of appellant.
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2017 (4) TMI 1225
Renting of immovable property service - non-payment of service tax by appellant - demand of duty with interest and penalty - Held that: - the services provided as per the contract fall under the taxable category of “renting of immovable property”, on which service tax is leviable - in view of the fact that there were divergent views with regard to the leviability of the service tax on renting of immovable property, the benefit of Section 80 ibid can be extended in this case for non-imposition of penalty u/s 76, 77 and 78 of the FA - penalty set aside - appeal allowed - decided partly in favor of appellant.
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2017 (4) TMI 1220
CENVAT credit - input service distributor (ISD) - overriding commission/sales commission - Bangalore Unit had availed credit for combined sales turnover of Bangalore and Hubli plant without obtaining the registration as Input Service Distributor - Held that: - this Tribunal vide its Final Order dated 10.7.2015 in the appellants own case [2016 (2) TMI 590 - CESTAT BANGALORE] has allowed the appeal on merit. It was held in the case that both the units at Bangalore as well as at Hubli are the units of the same appellant and the credit availed by one unit could have been distributed to the other unit even though the services were not actually availed at that unit. This leads to the conclusion that either of the two units could have availed the entire credit. As such, it is of the view that denial of credit to the Bangalore unit is not justified - credit allowed - decided in favor of assessee.
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2017 (4) TMI 1213
Cenvat Credit - Input service - construction services for construction of factory building - Held that: - the issue is no more res integra and is squarely covered by the judgment of Hon’ble Punjab & Haryana High Court in the case of CCE, Delhi-III Vs. Bellsonica Auto Components India P. Ltd. [2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT], where it was held that prior to the amendment the setting up of a factory premises of a provider for output service relating to such a factory fell within the definition of ‘input service’.
Input service credit - construction of boundary wall - Held that: - issue is covered in the favour of the assessee in the case of Nirma Ltd. Vs. CCE & ST, Vadodara-I [2013 (7) TMI 46 - CESTAT AHMEDABAD], where it was held that construction services utilized for establishing the factory were eligible for cenvat credit.
Appeal dismissed - decided against Revenue.
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2017 (4) TMI 1181
Construction of civil structures as the Park Villa - classified under the head Works Contract Service or Industrial Commercial Construction - Held that: - the nature of the activities carried out by appellant was civil construction. As work contract was not liable to tax prior to 1.6.2007, there shall not be taxability on this aspect of the adjudication - once there is no liability on works contract, therefore there shall be no penalty.
Repair and Maintenance activity - Held that: - for no agitation against that by appellant, there shall be demand of service tax on that count.
Penalty on repair and maintenance service - Held that: - there is contract between the appellant and the residents that soon after residents association is formed, the deposits shall be transferred to the association, If realization of above has gone to the association, appellant shall not be liable to penalty - On the aforesaid limited issue, appeal is remanded to the Adjudicating Authority.
Appeal disposed off - part matter allowed and part matter on remand.
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2017 (4) TMI 1180
Presence of mens rea - imposition of penalty u/s 78 of FA - Investigation was initiated against the petitioner on the basis of intelligence report that the petitioner is engaged in supply of tangible goods on hire basis without obtaining service tax registration - case of petitioner is that they did not obtain service tax registration under bona fide impression that since the petitioner is a goods transport agency under Section 65 (50b) of the FA, 1994, which is exempted from service tax liability under Section 66D of the FA - Held that: - It is settled law that an order imposing a penalty for failure to carry out a statutory obligation is the result of quasi-criminal proceedings and penalty will not ordinarily be imposed unless the party obliged has either acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct, or acted in conscious disregard of its obligation. A penalty will not also be imposed merely because it is lawful to do so - presence of mens rea is absolutely necessary ingredient for imposing penalty under Section 78 of the FA, 1994.
It is true that agreement between the petitioner and respondent No.3 clearly provides that the petitioner would produce the service tax registration certificate and likewise, reimbursement of service tax was limited to the production of demand regarding payment of service tax. But, it is not in dispute that the petitioner did not produce the service tax registration certificate to respondent No.3, however, immediately after initiation of investigation and upon service of notice of investigation by respondents No.1 and 2, the petitioner had already discharged its tax liability before issuance of show cause notice and paid the service tax liability on 25-7-2014 and discharged interest liability on 26-8-2014.
There is no willful suppression of facts to evade tax on the part of the petitioner and it was bona fide on the part of the petitioner, it was not deliberate and in absence of finding relating to mens rea recorded by the Settlement Commission, the penalty imposed upon the petitioner under Section 78 of the FA, 1994 deserves to be quashed.
Petition allowed - decided in favor of petitioner.
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2017 (4) TMI 1179
Wrong availment of Cenvat Credit twice - duty paying invoices - demand of duty with interest and penalty - appellant immediately reversed the Cenvat Credit availed twice - Held that: - when the appellant is having sufficient balance in their Cenvat Credit account therefore, it cannot be alleged that there was a mala-fide intention to take inadmissible Cenvat Credit on invoice twice. It is the inverdent mistake - the charge of mala-fide intention is not sustainable.
Period of interest - Held that: - the SCN were issued by invoking extended period of limitation and charge of mala-fide intention is not there, therefore, SCN were issued to the appellant are the barred by limitation.
The appellant has not disputing the payment of Cenvat Credit taken twice, therefore, same is confirmed but they will not be the demand of interest and penalty on the appellant are also set aside - appeal allowed - decided partly in favor of appellant.
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2017 (4) TMI 1178
Refund claim - unutilised CENVAT credit - export of output services without payment of service tax - Held that: - as the services provided by the respondents fall under Export of service, the services provided by the respondent are not liable to be taxed - the respondents are entitled for refund claims - appeal dismissed - decided against Revenue.
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2017 (4) TMI 1177
Composite works contract - The appellant carried out construction of external/internal works for electrical sub-stations and also laying overhead cables along with various other connected activities - Revenue entertained a view that the activities carried out by the appellant are liable to be taxed under the category of “Erection, Commissioning or Installation” services in terms of Section 65(39a) of FA, 1994 - Held that: - it is clear that these contracts are of composite nature involving both supply of materials as well as provisions of service. In such situation, these activities cannot be categorized as simple service contract to be subjected to service tax prior to 1.6.2007 - there is no liability for the appellant to pay service tax on these composite works contract prior to 1.6.2007.
Extended period of limitation - Held that: - there is ground for the appellant to have bonafide belief regarding non-liability as to service tax - there is no ground for invoking demand for extended period - the penalties imposed on the appellant are to be held as non-sustainable.
Jurisdiction - Held that: - The appellants are having registered office at Bhopal and they are registered with the Service Tax Department at Bhopal. They do have a branch office at Jhansi but were not registered in Jhansi. The contracts were executed in the name of registered office and work executed by the appellant. The Jhansi office dealt with the billing or other connected activities does not have impact of shifting of jurisdiction regarding the appellant’s liability as a party to the contract of service.
The liability of the appellant to service tax shall be restricted to the normal period under Works Contract Service. The same shall be worked out by the jurisdictional officers based on the documents and the bills submitted by the appellant - appeal allowed by way of remand.
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2017 (4) TMI 1176
Liability to tax - supply of tangible goods - appellants got manufactured 60 Railway Wagons and supplied the same to the Railways - Held that: - the appellant supplied wagons in terms of agreement dated March, 1996. The agreement and the supply of wagon were much prior to the tax entry introduced in 2008. The tax entry talks about supply of tangible goods. When such supply has occurred when there was no tax liability, there is no question of service tax payment on the same - the right of position and effective control is with the Railways and as such, the tax entry has no application for the present transaction - appeal allowed - decided in favor of appellant.
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2017 (4) TMI 1175
Refund claim - input services used in connection with providing the output services to foreign clients - rejection mainly due to non-submission of certain documents and inability of Revenue to identify the taxable nature of the service rendered by the appellant - Held that: - the rejection of claims is not substantially on any legal issue. It is mainly on account of non-submission of certain documents or lack of correlation in realization of export proceeds - on the very same set of facts, the Revenue allowed the refund claims for the previous period - the original authority are directed to examine the issues afresh, especially referring to the documents submitted by the appellant with reference to their refund claims - appeal allowed by way of remand.
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2017 (4) TMI 1174
Reversal of CENVAT credit - Rule 6(3A)b(iii) - credit availed on common input services used for taxable services as well as trading activities which are exempted services - Held that: - prior to 01.04.2011 the formula given in Rule 6(3A)b(iii) cannot be applied to trading activities for the reason that these are not exempted services. Since a computing method has been introduced w.e.f. 01.04.2011 the same can be adopted to arrive at the proportionate credit that has to be reversed when common input services are used for taxable services and trading activities prior to 01.04.2011 also - applying the judgment in the case of M/s TFL Quinn India Pvt. Ltd.[2016 (6) TMI 230 - CESTAT HYDERABAD], the appellant is liable to pay/reverse the amount of credit arrived at by applying the formula brought forth by the amendment w.e.f. 01.04.2011 - the demand raised beyond the normal period is time barred and requires to be set aside - Taking into consideration that the period is transitional period and also because the appellant has reversed the amount, no penalty is to be imposed - appeal allowed - decided partly in favor of appellant.
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2017 (4) TMI 1171
Rejection of VCES-1 declaration - the case of the Revenue that the declaration was liable to be rejected under the provisions of Section 111 of the FA, 2013 as an enquiry was initiated against the respondent–assessee by the DGCEI - Held that: - The Board Circular, dated 25.11.2013 clarifies that in cases where the documents like the balance sheets, profit and loss account etc. are called for, by the Department in the enquiries of roving nature, while quoting the authority of Section 14 of the Central Excise Act in a routine manner, the Commissioner concerned would be entitled to take a view on merit, taking into account the facts and circumstances of each case, as to whether the enquiry is of roving nature or whether the provisions of Section 106 (2) of the Act are attracted to such cases - The appellant cannot rely on the SCN, dated 17.10.2014 to substantiate the case of the appellant as the said sSCN was served on the respondent assessee after the assessee had tendered the declaration on 31.12.2013 - appeal dismissed - decided against Revenue.
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2017 (4) TMI 1168
Pre-deposit - a sum in excess of ₹ 2,00,000/- has already been paid by the appellant/ Assessee; a fact, which also finds mention in the SCN - the appellant says that the order is erroneous in law, as none of the parameters, which had to be applied, while passing an order on an application seeking waiver of pre-deposit were brought into play by the Tribunal - Held that: - The Tribunal, was in fact required to examine in terms of Section 35 F of the Central Excise Act, 1944, (in short "the Act") as to whether or not, in its opinion, deposit of the tax demanded or penalty levied, would cause undue hardship to the appellant, and thus, based on the result of enquiry to determine to what extent waiver of demand, if at all, had to be directed - the Tribunal failed to examine whether or not the Assessee had a prima facie case to seek abatement of tax to the extent of ₹ 61 lakhs or, whether the Assessee could be called upon to pay service tax, vis-a-vis, services rendered on behalf of the main contractor, who had, as indicated above, deposited the tax - appeal allowed - decided in favor of assessee.
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2017 (4) TMI 1136
Renting of immovable property services - consideration in the form of percentage of gross income PLUS gross operational profit or minimum guaranteed profit - The appellants claimed exclusion under the category of buildings used for the purpose of accommodation including hotels - Held that: - it is not the case of the renting out empty land to be later developed with construction of hotel - Admittedly, the building and the land as appurtenant thereto are used for the purpose of running the hotel. The term “hotel” is not defined in the Finance Act, 1994. As generally understood, a hotel is for temporary accommodation of people paying for their rooms and meal. Many hotels will have various other incidental facilities relating to entertainment, personal care, etc. The presence of these facilities does not exclude the building from the category of “hotel” - similar issue came up for decision before the Tribunal in Jai Mahal Hotel Pvt. Ltd [2014 (7) TMI 540 - CESTAT NEW DELHI], where it was held that buildings used for or as hotels do not amount to immovable property. The legislative provision in question i.e. the exclusionary clause (d), to the extent relevant and material, excludes from the purview of immovable property, buildings used for the purposes of accommodation including for hotels - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (4) TMI 1135
Valuation of taxable services - The Revenue contend that the appellant/assessee is collecting “other charges” and did not pay service tax on such charges - The claim made by the appellant/assessee is that these other charges are nothing but transaction charges paid to stock exchange and turnover fee, stamp duty etc. - Held that: - On the excess stamp duty charges collected and retained by the appellant/assessee it was recorded that the amount which is shown as reserve and surplus in the balance sheet cannot be considered as receipt on account of stamp duty and accordingly liable to be added in the gross value for service tax purposes.
Short payment of service tax - banking and other financial services - The main dispute relates to the tax liability of the appellant/ assessee for receipts under “other charges” - Held that: - The contract note itself does not elaborate the nature of such other charges. The appellant/ assessee claims that the other charges covered the turnover charges, VSAT connectivity charges, stamp duty etc. Categorical documentary evidence to that effect is not on record. Further, we note that the claim of the appellant/assessee to have acted as “pure agent” can be considered only on fulfillment of the conditions mentioned in Rule 5 (2) of the Valuation Rules. The main requirement for exclusion of charges when the appellant/assessee is acting as a pure agent is the amount collected from client should be passed on actual basis to third party based on a clear prior understanding. There are various conditions under the said Rule 5 (2). Only on fulfillment of all these conditions any consideration received by appellant can be excluded considering transaction under the concept of “pure agent”. The evidences to that effect are not presently on record.
Matter remanded to the Original Authority for a fresh decision - appeal allowed by way of remand.
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2017 (4) TMI 1134
Forward Contract Service - transaction fee collected by the appellant from their clients and paid to the stock exchange as a custodian - case of Revenue is that the transaction fee has to be included in the gross taxable value and will be subjected to service tax at the hands of the appellant as provider of taxable service to the clients - Held that: - the fact which is to be supported by the documentary evidence is that the said transaction fee collected by the client is paid to the exchange on actual basis without any retention by the appellant. This aspect requires verification - any amount collected in the name of transaction fee is not remitted to the exchange and is retained by the appellant, it is apparent that the same will be an additional consideration accruing to the appellant towards service rendered to the clients. The name of such consideration becomes immaterial as the same does not represent the actual transaction fee - appeal allowed by way of remand.
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2017 (4) TMI 1133
Valuation - composite contract - Revenue entertained a view that the valuation has been made improperly by the appellant and in terms of the N/N. 12/2003-ST, they have not properly taken the actual service value to pay service tax - the appellants pleaded that there is no monetary gain for them in artificially loading more value to materials supplied by paying VAT, as the rate of VAT is higher than the service tax, payable on the service portion - Held that: - We have perused a few work orders, which clearly stipulated that 80% of the value shown to have suffered VAT with reference to supply of materials, which is done in the present case - appeal allowed - decided in favor of appellant.
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