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Service Tax - Case Laws
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2018 (2) TMI 2051
CENVAT Credit - input services - Insurance Premium relating to employees/workers - period May 2012 to Jan. 2013 - HELD THAT:- The issue is covered by decision of this Tribunal in M/S CHECKMATE INDUSTRIAL GUARDS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL GOODS & SERVICE TAX, NOIDA [2020 (2) TMI 607 - CESTAT ALLAHABAD] in as much as the ‘Insurance Premium’ paid in relation to employees/workers in the factory in compliance with Sec. 38 of the Employees State Insurance Act, 1948.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 2026
Levy of penalty - Section 73 of the Finance Act of 1994 - service of Practicing Chartered Accountant provided - appellant had paid the arrears of tax and interest prior to the issuance of show cause notice - suppression of facts or not - Whether the proceedings under Section 73(3) of the Finance Act, 1994 in this matter could be said to be justified by any of the reasons stated in sub-section(4) of Section 73 of the Act?
HELD THAT:- It is true that in various cases like COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT] , that the levy of penalty imposed on the ground of delayed payment of Service Tax was set aside as the tax was paid prior to issuance of show cause notice. However, the present case has a distinguishable feature.
In the present case, the undisputed fact reveals as reflected from the Order of the Assessing Officer that the assessee came up with a plea before the Assessing Officer that he has rendered services to Karnataka State Financial Corporation (KSFC) and it is the KSFC which has not cleared the bills of the assessee and in those circumstances, the assesee was not able to pay service tax - it is also established that non-payment of Service Tax was not due to delay but on the contrary it was willful non payment of service tax with an intention to evade payment of Service tax. Thus, the assessee suppressed the facts and made willful mis-statement before the Assessing Officer and in those circumstances, the benefit of Section 74, 78 was not extended to him.
In the light of the categorical finding of fact arrived at by the Assessing Officer keeping in view Section 73(4) of the Finance Act of 1994, merely because tax was paid before the issuance of show cause notice, it can never be said that the penalty cannot be imposed upon the appellant - appeal dismissed.
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2018 (2) TMI 2000
Second claim for Refund of service tax paid - service of Foreign Exchange Sales services provided by broker - rejection on the ground of time limitation - HELD THAT:- The Revenue had not disputed the submission of the first Refund claim which is within the period of limitation. The appellant modified the refund claim and filed on 27/01/2009 for ₹ 4,20,403/- which is in continuation of the earlier refund claim.
The Tribunal in various decisions held that re-submitted claim was in continuation to earlier claim and not hit by limitation and followed the decision of the Hon’ble Gujarat High Court in the case of UNITED PHOSPHORUS LTD. VERSUS UNION OF INDIA [2003 (5) TMI 76 - HIGH COURT OF GUJARAT AT AHMEDABAD]. Hence, there is no reason to interfere in the order of the Commissioner (Appeal).
Appeal dismissed - decided against Revenue.
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2018 (2) TMI 1932
Maintainability of petition - the matter has been listed on the Judicial Side at Delhi - HELD THAT:- The question whether or not the appeal should be heard at Delhi or any other location, would be decided on the Judicial Side.
Petition disposed off.
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2018 (2) TMI 1922
Benefit in respect of sale or purchase of agriculture produce - N/N. 13/2003 ST dated 20.06.2003 - appellant used the services of overseas agents for procurement of orders and paid commission to such agents - demand of service tax - HELD THAT:- The N/N. 13/2003 as amended by Notification No. 8/2004 dated 09.07.2004 has extended the benefit to commission agents in relation to sale or purchase of agriculture produce.
The nuts are to be treated as “Agriculture Produce”. The activity of the appellant is to remove the shell and recover the cashew kernels - this is very much covered under the definition of “Agriculture Produce” and hence the benefit of the Notification will be allowable to the appellant. Also the applicability of the Notification was clarified by the CBEC through clarification No. 143/12/2011-ST dated 26.05.2011 in which it has been specifically explained that the benefit is extendable to cashew nuts.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1897
Classification of services - Business Auxiliary Service or not - activity of body building on the chassis - Job-work - Department has issued the SCN alleging that the appellants are job workers and that they are liable to pay tax on the activity of buses body building on chassis. The appellants have consistently submitted that they are not job workers and are engaged in manufacture of body for motor vehicles - HELD THAT:- It is clear that the activity is a manufacturing activity. The said activity cannot be treated under activity of service merely because the excisable goods manufactured are exempted from excise duty. The department has issued the show cause notice on erroneous understanding of both Central Excise law as well as Finance Act, 1994.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1896
Taxability - hire charges collected by the appellant for hiring cranes to its customer - C.B.E. & C. Circular No. 334/1/2008-TRU, dated 29-2-2008 - HELD THAT:- TRU clarification, dated 29-2-2008 makes it clear that service tax will be liable to be paid only in those cases where the legal right of possession and effective control is not transferred - In the present case, we note that such legal right of possession and effective control is transferred. Consequently, the service does not fall within the category of SOTG service.
An identical issue has come up before Tribunal in the case of KINETIC COMMUNICATIONS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2016 (2) TMI 1044 - CESTAT MUMBAI] in which the Tribunal has set aside the demand for service tax under above category.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1889
Construction of Complex Services - Separate consideration for land - Department was of the view that the amount recovered as land value should also form part of the total consideration received for payment of service tax - HELD THAT:- The agreements entered into by the appellant with the buyer clearly indicate that the consideration recovered is partly for the sale of undivided rights of the land on which the complex has been constructed and rest is for the construction charges. The two amounts are indicated separately in the agreements entered into with the buyers as well as recorded separately in the Books of Accounts of the appellant.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1888
Refund claim - principles of unjust enrichment - service tax paid on transportation of goods to the premises of M/s. Ispat Industries Ltd. - HELD THAT:- In this case, there is no scope of taking any cenvat credit on the basis of challan of the appellant inasmuch as, in the challan, the name of the recipient M/s. Ispat Industries has not been mentioned. Since the name of the consignee i.e. Ispat Industries is not finding place in the challan of the appellant, it can be construed that such recipient of service has not availed any cenvat benefit in respect of the service tax paid by the appellant.
There is no question of passing of any service tax incidence to the service receiver and accordingly, the doctrine of unjust enrichment will have no application in this case, for denial of the refund benefit.
There are no merits in the impugned order, in dismissing the appeal of the appellant on the ground of unjust enrichment - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1887
Liability of service tax - Consulting Engineering Service - part service provided outside India - HELD THAT:- Major part of the service was provided outside India and since there is no provision for making proportionate recovery on the basis of number of days in India. So, no Service Tax is liable to be paid.
Appeal dismissed - decided against Revenue.
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2018 (2) TMI 1868
Services rendered to the Developer or Units situated within the SEZ - N/N. 17/2002-S.T., dated 21-11-2002 as well as the N/N. 4/2004-S.T., dated 31-3-2004 - Held that:- Initially N/N. 17/2002 was issued. Even though there was a requirement of an authorization to be given by a Committee headed by Chief Commissioner, it has been submitted that such Committee was never set up and hence, there was no opportunity for obtaining such a certificate - the appellant has rendered the CHA service to units within the Special Economic Zone and hence; the services may be considered as having been utilized within the zone.
There is no dispute on the fact that such services have been rendered by the appellant to the developer or units which are situated within SEZ and hence denial of the benefit of the two exemption notifications for minor procedural violation is not justified.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1866
Reverse Charge Mechanism - respondent entered into a contract with M/s. Agrinergy Ltd. UK for assistance in implementing clean development mechanism as per Article 12 as Kyoto Protocol - management or business consultant service or not - Held that:- The respondent did not receive any statutory service from UK Company and the transaction is purely commercial in nature. The terms of the agreement and the manner of consideration to be paid clearly make it that the services received by the respondent are covered under the category of management or business consultant service.
It is clear that in the present case the respondent did receive consultancy or technical assistance in relation to respondent. The CDM project implemented in such power plant resulted in generation of carbon credits (CERs), which were further transferred on consideration to others by the respondent. As per the agreement 7=% of the total consideration is retained by UK Company, who facilitated by way of consultancy and other related activities in the creation of CDM project. We note that the impugned order misdirected itself while examining the matter of transaction as well as the scope of tax entry for such transaction.
The tax liability of the respondent on reverse charge basis is sustainable - appeal allowed - decided in favor of Revenue.
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2018 (2) TMI 1862
Classification of service - Rent-a-cab service or not - scope of person to be considered as rent a cab operator - penalty - Held that:- The evidence from the records indicates that the appellant did provide the motor vehicles to their sister concern and received considered based on usage. As such, we find no reason to vary the impugned order - however, the case of waiver of penalty under Section 80 can be considered favourably. Admittedly, the appellants are mainly engaged in goods transport service and incidentally they have provided three passenger motor vehicle to the sister concern for transport of officers and staff. It would appear that appellant had reasonable cause to consider themselves as not rent a cab operator.
While upholding the tax liability, it is proper that Section 80 have been invoked for setting aside the penalty under Section 78 - appeal allowed in part.
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2018 (2) TMI 1853
Classification of services - tour operator services or not - respondents are providing boarding and lodging to the tourists on direct booking or on the request of the tour operators - Held that:- In the instant case, the respondents are providing the accommodation on the request of the tour operators or sometime on direct reservations. They are not providing transportation nor providing the contract carriage. They are not holding the stage carriage permits. Their activities are confined to the boat in the water. The boat operators have not control over the schedule of the guests. They are not providing any guidance or planning for the stay in Kerala. The boat can be considered as a hotel in the water.
Certainly, the "House Boat Owner" cannot be considered as a tour operator for the reasons that they are not carrying the guests/ tourists from one place to another in the State - appeal dismissed - decided against Revenue.
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2018 (2) TMI 1845
Short-payment of service tax - additional liability towards Service Tax in excess of ₹ 3 lac - part amount was admitted and was paid alongwith cess and interest thereon - admission of the applications for settlement - adjustment of total amount of duty and interest from the amount already deposited - grant of immunity from payment of penalty as well as immunity from prosecution under Section 32K of the Act - applicant only disputed ₹ 37,391 and paid ₹ 2,997/-. Thus, the total disputed amount was ₹ 37,391/- - abatement at 75% or 30%? - N/N. 2/2013-S.T., dated 1-3-2013.
Held that:- From 1-3-2013 any unit would qualify for taxable amount of 25% if either the carpet area is less than 2000 sq. ft. or consideration is less than 1 crore; in other words, 30% taxable value would only be applicable when the carpet area is more than 2000 sq. ft. and consideration is more than 1 crore - In the present case, as is undisputed by the Department, the consideration is less than 1 crore on all the units on which the applicant was claiming the exemption and therefore, for the period from 1-3-2013 to 7-5-2013, they are duly eligible for claiming the exemption of 75% of the value and taxable amount would be 25%.
Since during the period from 1-3-2013 to 7-5-2013, the exemption of 75% was given to residential units having carpet area less than 2000 sq. ft. or where even consideration is less than one crore and since the consideration received was less than one crore in the case of the applicant during the period from 1-3-2013 to 7-5-2013, the exemption notification is applicable to them and they have to pay tax on 25% of the amount charged. Accordingly, ₹ 37,391 demanded by the Department does not sustain.
Penalty - Held that:- The applicant has completely co-operated with the Department during the period of audit and accepted the non-paid amount which was apparently a result of non-comprehension of technicalities relating to reverse charge mechanism. The applicant has also co-operated with the Commission while pleading his case and the Commission is of the view that the applicant has made a full disclosure of his taxable amount and paid the tax immediately on detection without any delay. (The audit was conducted from 8-2-2014 to 11-2-2014 and non-payment was detected and the payment was made on 26-2-2014 i.e. barely within 15 days). Thus, the Commission is convinced that the applicant had no intention to evade tax and decides not to impose any penalty on the applicant.
Prosecution - Held that:- The Bench considers it a fit case for grant of immunity from prosecution to the applicant.
Application disposed off.
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2018 (2) TMI 1844
Jurisdiction - power to rectify the mistake under Section 74 of the Finance Act, 1994 - Rebate of service tax - rejection on the ground that she did not have power to amend/modify her own order - Held that:- It is noticed by the Government at the outset that the revision application has been filed after the gap of 10 months from the receipt of the OIA by the applicant in this case. Whereas as per Section 35EE(2) of the Central Excise Act, 1944, made applicable to the service tax matters by virtue of Section 83 of the Finance Act, 1994, the revision application was required to be filed within 3 months from the date of the order of the Commissioner (Appeals). This enormous delay is sought to be condoned on the ground that they had filed appeal wrongly against the order of the Commissioner (Appeals) before CESTAT on 28-10-2015 and it has been dismissed by the CESTAT as non-maintainable vide this order dated 3-5-2016 only and they have filed the revision application soon after that on 30-5-2016.
Whereas as per sub-section (3) of Section 35EE of Central Excise Act, 1944, a revision application is to be accompanied by a fee of ₹ 1,000/- when the amount of duty, etc., levied by any Central Excise Officer is more than ₹ 1.00 lakh. This requirement of payment of fee before or at the time of filing the application is mandatory and no relaxation in this regard is provided under the aforesaid provision or any other Section. Thus if any application is not accompanied by the specified fee, such application cannot be accepted as properly filed and cannot be considered by the Government by virtue of the above-mentioned provision.
The Government does not agree with this averment as Section 74 is meant for correcting a mistake apparent on the face of the order and does not authorize any one for issuing a fresh order to modify or nullify the previous order. Whereas it is manifest that the second order passed by the Deputy Commissioner on 30-9-2014 is not for correcting any apparent mistake in the earlier order dated 21-5-2013 but is a fresh order with a clear intention to override/modify the earlier order for which the Deputy Commissioner was not empowered under Section 74 of the Finance Act. Therefore, the Government is in agreement with the Commissioner (Appeals)’s view that the Deputy Commissioner did not have power to review her earlier order or readjudicate the case which had already been decided by her.
The revision application is not found maintainable on the ground of time limitation as well as merit.
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2018 (2) TMI 1843
Rebate claim - export of services - Rules 5 of Export of Services Rules, 2005 read with Notification No. 11/2005-S.T., dated 19-4-2005 - rebate rejected for the reason that for no foreign exchange against export of services is received in this case and in addition out of the rebate claim of ₹ 1,09,72,290/- claim of ₹ 52,57,641/- is also time-barred as per Section 11B of Central Excise Act, 1944 - Held that:- The Government agrees with the views of the Assistant Commissioner and the Commissioner (Appeals) who have reached the conclusion that the Rule 3(2)(b) of Export of Services Rules, 2005 has not been satisfied in this case. Consequently it cannot be accepted that the applicant has exported service in this case as per Rule 3(2)(b) of the Export of Services Rules and accordingly the rebate of Service Tax is not admissible to the applicant under Notification No. 11/2005-S.T., dated 19-4-2005. The case laws relied upon by the applicant as mentioned in Para 2(c) are not found relevant in the present proceeding as in none of these decisions it has been held that receipt of payment in foreign currency in a bank situated in a foreign country can be considered as payment in foreign currency in India.
Time Limitation - Held that:- The applicant has conveniently overlooked the vital fact that Section 11B has been specially borrowed under Section 83 of the Finance Act and as a result time limitation of one year as stipulated under Section 11B of the Central Excise Act is applicable for the maintainability of the rebate of Service Tax under the Finance Act. Therefore, the lower authorities have rightly held rebate claim of ₹ 52,57,641/- as time-barred.
The Government does not find any fault in the order of the Commissioner (Appeals) - the Revision Application is rejected.
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2018 (2) TMI 1841
Maintainability of revision application - rejection on the ground of time bar - communication/service of order - change in address - Jurisdiction - revisionary power under Section 86 of the Finance Act, 1994 - Held that:- As per Section 83 of Finance Act, 1994, read with Section 35EE of the Central Excise Act, 1944, a Revision Application is to be accompanied by a fee of ₹ 1,000/- where the amount of Service Tax levied by any officer is more than ₹ 1.00 lakh. This requirement of payment of fee before or at the time of filing the application is mandatory and no relaxation in this regard is provided under the aforesaid provision or any other Section - Thus if any application is not accompanied by the specified fee, such application cannot be considered as proper Revision Application by virtue of the above-mentioned provision.
Since in this case the fee of ₹ 1,000/- has been paid only on 21-4-2014, the proper Revision Application in this case can be considered to have been filed only on 21-4-2014 by which this application is time-barred as the Revision Application can be filed only within 3 months from the date of communication of the Commissioner (Appeals) order as per sub-section (2) of Section 35EE of Central Excise Act, 1944 which was received in this case on 5-9-2013.
Jurisdiction - Held that:- It is also evident from the Revision Application and orders of lower authorities that the issue involved in the present case is regarding refund of accumulated Cenvat credit under Rule 5 of Cenvat Credit Rules, 2005, read with Notification No. 12/2005, dated 19-4-2005, for which the Government does not have revisionary power under Section 86 of the Finance Act, 1994, read with Section 35EE of Central Excise Act - the Revision Application has been filed wrongly before the Government.
Revision Application is rejected as time-barred and not maintainable before the Government.
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2018 (2) TMI 1832
Validity of SCN issued in the name of Firm after the death of proprietor - Whether the show cause notice is validly issued in the name of 'Bhootpurva Sainik Security & Detective Service' (after death of proprietor)? - whether the legal heir of late Mr. U.N. Pandey, Mr. Sashi Bhusan Pandey is liable for the dues, if any of the said Bhootpurva Sanik Security & Detective Service? - Held that:- Mr. Shashi Bhushan Pandey is whether the legal heir of late Mr. U.N. Pandey is not liable for any dues of Bhootpurva Sainik Security & Detective Service, as admittedly show cause notice was issued after the death of his father. So far the dues of the said firm are concerned the Revenue is directed to locate the erstwhile remaining partners of the said firm and enforce recovery from them.
Further from going through the show cause notice it is not evident whether the same is directed to proprietorship or the partnership concerned? Thus, under these circumstances held no proper service accordingly service that there is no proper authority with the Court below to pass the impugned order. Accordingly, the impugned orders are set aside - appeal allowed.
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2018 (2) TMI 1819
Business Auxiliary Service - service of Commission Agent for export of cashew - exemption under N/N. 13/2003 ST dated 20.06.2003 as amended - scope of ‘agriculture produce’ - Held that:- The definition of ‘agriculture produce’ finding place in the Notification - further, the CBEC clarification No. 143/12/2011-ST dated 26.05.2011 which has explained that the benefit of Notification will be applicable to cashew nut - he benefit of the Notification is extendable to the activity carried out by the appellant - appeal allowed - decided in favor of appellant.
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