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Service Tax - Case Laws
Showing 261 to 280 of 323 Records
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2018 (2) TMI 325 - CESTAT BANGALORE
Refund claim - appellant had erroneously paid the service tax on services exported in terms of Rule 3(2) of the Export of Service Rules - denial on the ground of time limitation - Section 11B of CEA 1944 - Held that: - it is an admitted position that the appellant has exported these services on which service tax was not applicable during the material time but the appellant has paid the service tax as an advance as he was under the impression that service tax is payable on the Export of Services rendered by him - in view of the fact that the service tax was not paid as tax but as an advance, therefore the period of limitation as prescribed u/s 11B of the CEA will not be applicable - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 324 - CESTAT ALLAHABAD
Penalty u/s 77 and 78 of FA - Recovery Agent Services - appellant had not taken any registration nor was making any compliance.
Held that: - it is not the case of Revenue that the appellant was a highly educated person understanding and/or having knowledge of the service tax provisions. In the statement recorded the appellant proprietor have stated that he was not aware of the provisions of service tax. He was entirely dependent on the bank which used to calculate the payments/commission payable to him, which was credited to his account, after deducting of income tax TDS at source. Further it is admitted fact on record that the appellant was not preparing any bills on the Bank nor have charged service tax and/or collected any service tax. Thus, there is no conscious attempt on the part of the appellant to evade payment of service tax.
There is no deliberate attempt and/or contumacious conduct on the part of the appellant in compliance with the service tax provisions.
Penalty u/s 78 set aside - penalty u/s 77 reduced - appeal allowed in part.
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2018 (2) TMI 323 - CESTAT ALLAHABAD
Penalty - liability of service tax on the amount of security deposit collected from the prospective flat owners which was subsequently handed over to the newly formed flat owners society - validity of SCN.
Penalty u/s 78 - Held that: - there is no case of suppression or contumacious conduct or any attempt on the part of the appellant to evade payment of service tax. Further it is admitted fact that there was disturbance in the normal carrying out of the business due to freezing of withdrawal in the bank account of the appellant company, which is a reasonable cause for delay in submission of their payment of taxes - penalty u/s 78 set aside.
Penalty u/s 77(2) for taking service tax registration late - Held that: - the appellant had suo motu taken registration with the Department. Further it is not the case of Revenue that the appellants had taxable receipts during the period prior to the date of taking registration - no case of penalty under Section 77(2) is made out and accordingly the said penalty is also set aside.
Penalty/late fee of ₹ 1,03,000/- u/s 70 of the FA read with Rule 7C of STR 1994, towards late filing of the returns - Held that: - there is reasonable cause for furnishing of returns late due to disturbance in the business, being freezing of withdrawal from the Bank account, but as levy of late fee is not discretionary the same is not interfered with.
Levy of service tax on the amount of security deposit - Held that: - the said amount was received by the appellants having character of pure agent and on behalf of the flat owners as their trustee, which amount have been subsequently given to the society formed of the flat owners and this fact is not disputed - demand set aside.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 322 - CESTAT CHENNAI
Manpower recruitment or supply agency services - the appellant had placed services of well qualified engineers and professional to cater to their operational needs of their associated groups like BALCO MALCO, HEZ etc. - Department took the view that such activity would come within the ambit of manpower recruitment or supply agency services - Held that: - the issue has been decided in the case of Spirax Marshall P. Ltd., Forbes Marshall P. Ltd. & J.N. Marshall P. Ltd. Versus Commissioner of Central Excise, Pune I [2015 (11) TMI 978 - CESTAT MUMBAI], where it was held that There is no element of profit or finance benefit. The subsidiary companies cannot be said to be their clients. Deputation of the employees was only for and in the interest of the company. There was no relation of agency and client.
Demand set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 321 - CESTAT CHENNAI
Short payment of service tax - Works Contract Services - demand for the period Oct, 2008 to June, 2012 - Held that: - it is established from the records that the buildings are predominantly used for educational activities. Merely because some incidental activities of renting of space for Scientific or Technical Services or Man-power Recruitment services occurs, it cannot be said that the buildings are not primarily used for educational services - demand set aside.
Penalties - for the period Apr.'13 to Jul.'13 - Held that: - the appellant had discharged the tax liability on being pointed out by the department and much before the issuance of the SCN - the imposition of penalty for the period from Apr,'13 to July, '13 is not justified.
Appeal allowed in part.
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2018 (2) TMI 320 - CESTAT CHENNAI
Business Auxiliary Services - activities of booking domestic and international air cargo for various airlines for rendering the said bookings - Department took the view that the assessee were paying service tax under Business Auxiliary Service only on the commission amount without considering the incentive amount - Held that: - reliance placed in the case of Suraj Forwarders Vs Commissioner of Service Tax, Ahmedabad [2014 (4) TMI 1169 - CESTAT AHMEDABAD], where it was held in favor of the assessee noting that mere sale and purchase of cargo space and earning profit in the process is not a taxable activity and that commission earned by the assessee while acting on behalf of the exporter and mark-up value was of freight charges are not to be considered as commission - demand set aside - appeal allowed - decided in favor of appelalnt.
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2018 (2) TMI 319 - CESTAT CHENNAI
Rectification of mistake - Since the grounds stated in the appeal was not considered by the Tribunal, he pleaded that the final order may be recalled and that those grounds stated in the appeal memorandum may be considered - Held that: - the Tribunal has noted that there is no dispute that Catering Services provided by the appellant, was taxable. It is also seen that the order was dictated and pronounced in open court on the same date of hearing of the appeal. Thus, there is a categorical recording by the Tribunal that the appellant does not dispute the taxability of the services - The present application for rectification of mistake is filed by another counsel Shri S. Murugappan, who has not appeared at the time of hearing of the appeal. Therefore, there is no basis to contend that there was no concession on the part of the counsel for the appellant, that the taxability of the services was not disputed.
In the case of Anshita Chawla and Ramesh Chawla [2015 (8) TMI 1366 - CESTAT NEW DELHI], it was noted by the Tribunal that when no objection was raised by the appellant's counsel with regard to the recordings made at the time of disposing the case finally, the contention raised by the appellant for rectification of mistake thereafter cannot be entertained.
There is no error apparent on the face of record, which requires rectification - ROM application dismissed.
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2018 (2) TMI 318 - CESTAT CHENNAI
Business Auxiliary Services - whether the the impugned activity carried out by the assessee was not BAS but only manufacture? - Held that: - there is no fault with the conclusion of the lower appellate authority that activity undertaken by the assessee amounts to manufacture u/s 2(f) of the CEA, 1994 - demand rightly set aside.
Supply of manpower to job-worker - liability of service tax - Held that: - while allegation has been raised that assessee is supplying man power, however there is no clarity given therein with regard to terms of supply - the assessee has been utilizing his own labour for packing activities. Viewed in this light, we are not able to appreciate how tax can be levied on the assessee for utilizing his own labour - tax liability do not sustain.
Appeal dismissed - decided against Revenue.
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2018 (2) TMI 317 - CESTAT CHENNAI
Business auxiliary services - appellants herein are engaged in providing "Logistic Support Services," such as, Cargo Consolidation, De-consolidation, Documentation, Customs Clearance, Freight Forwarding and other related services - It appeared to the Department that appellants are providing the services on behalf of overseas logistics company appointed by the overseas buyer and hence service tax liability would arise under the heading of Business Auxiliary Services.
Held that: - to qualify as a service provider of Business Auxiliary Service, the services have to be provided which would augment or enhance or supplement the business of the client, which would obviously result in improvement of the business income/profit of the client. In cases, where there is promotion or marketing of services, or provision of service on behalf of the client, there is more often an arrangement by which the service provider takes or is given the responsibility for increasing the scope for the service activity of the client, generally in a specific geographical area.
No portion of the container freight services (CFS) chargers and Cargo Receipt or CR Charges received by the appellants from the Indian exporters of cargo are alleged to have been remitted or transferred to the foreign client to APL WMS HKL - no portion of the amount collected by the appellants from the Indian exporters of Cargo is being transmitted to APL WMS HKL. It is also pertinent to note that APL WMS HKL, do not also pay any commission fees or incentives to the appellants.
Demand set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 290 - CESTAT MUMBAI
Scope of SCN - Business Support Services - change in classification of service suo moto - Held that: - Held that: - at the appellate stage, the Commissioner (Appeals) has changed the classification from business support service to brand promotion service suo motu and unilaterally, which is not permitted under law - this issue has been settled in favor of the assessee in the case of M/s Balaji Contractor Versus Commissioner of Central Excise Jaipur-II [2017 (3) TMI 181 - CESTAT NEW DELHI], where it was held that the tax entry of each type of service has got legal implications with reference to tax liability, classification, quantification, exemption, abatement etc. It is for this reason, the assessee should be put to notice about the correct classification under which the demand was sought to be made, so that defence can be made to reply for such allegation - the impugned order passed by the Commissioner (Appeals) going beyond the SCN is not sustainable in law - appeal allowed - decided in favor of appellant-assessee.
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2018 (2) TMI 289 - CESTAT MUMBAI
Maintenance, Management or Repair Service - appellant carry out maintenance and repair of streets, street lights, water supply, drainage etc. They collect from the lessees of the plots, an annual fee for providing such services, calling it as service charge - whether the service will be taxable under the head Maintenance, Management or Repair Service?
Held that: - the activities performed by sovereign or public authorities under the provisions of law which are in the nature of statutory obligations are covered by clause 2 which provides that the fee collected by such sovereign or public authorities for performing such activities is in the nature of compulsory levy. Only if such authority performs service which is not in the nature of statutory activity and the same is undertaken for a consideration which is not in the nature of statutory fee, service tax would be leviable if the activity undertaken otherwise falls within the ambit of taxable service - service tax not leviable - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 288 - CESTAT CHENNAI
Classification of services - appellants had entered into an agreement with M/s. MALCO to carry out mining services - Business Auxiliary Services or mining services - Held that: - similar issue decided in the case of M/s. Thriveni Earthmovers Pvt. Ltd. Versus Commissioner of Central Excise, Salem [2009 (4) TMI 9 - CESTAT CHENNAI], where it was held that activity of loading and transportation of limestone and rejects from mine head to crushing premises under taken within mining area and covered by Mines Act, 1952 would not be taxable under Business Auxiliary Service - levy of service tax as business auxiliary services cannot then be sustained - appeal allowed.
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2018 (2) TMI 287 - CESTAT CHENNAI
Short payment of service tax - penalty - Held that: - the benefit of section 80 as contended by the appellants, cannot be extended to them - The provisions of section 73 also makes it clear that in case of suppression, fraud, mis-statement etc., with an intent to evade payment of duty would call for imposition of penalty to the extent of 100% of tax evaded - appeal dismissed - decided against appellant.
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2018 (2) TMI 286 - CESTAT CHENNAI
Demand of interest - time limitation - whether the extended period of limitation could be invoked for the demand of interest? - Held that: - limitation would apply to demand of interest also - with effect from 14.05.2015 a new sub section (1B) has been introduced in Section 73 which says that interest payable on self assessed service tax shall be recovered as per Section 87 of the Act ibid, without service of notice. The period in this case is prior to 14.5.2015 - reliance placed in the case of Hindustan Insecticiedes Ltd. Versus Commissioner Central Excise, LTU [2013 (8) TMI 225 - DELHI HIGH COURT].
The demand of interest in hit by limitation - appeal allowed.
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2018 (2) TMI 237 - CESTAT MUMBAI
Rent-a-cab operator service - activity of providing buses on hire/rent on casual contract basis - case of the department is that this activity of the appellant was allegedly covered by the definition of taxable service, namely, Rent-a-Cab Operator Service as defined under Section 65(105)(o) of Finance Act, 1994 - Held that: - it is observed that the appellant M/s MSRTC is not handing over the buses on long time running agreement whereas the ownership of buses is retained by the appellant and they are providing the buses on KM basis for a particular destination as per the choice of the passengers. There is no person involved as a recipient of a Rent-a-Cab service to whom the buses is handed over under a rent agreement. Therefore, in this fact arrangement of providing the buses for a particular journey on KM basis does not fall under the category of Rent-a-Cab Operator Service.
The issue is squarely covered by the decision in the case of Shree Gayatri Tourist Bus Service Vs. Commissioner of Central Excise, Vadodara [2012 (5) TMI 126 - CESTAT, AHMEDABAD [LB]], where it was held that the services rendered by the assessee cannot fall under the category of Rent-a-Cab services, as per the definition enshrined in Section 65(91) of the Finance Act, 1994.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 236 - CESTAT MUMBAI
Intellectual Property Service - transactions of transfer of right to use trade mark or brand name - liability of VAT or service tax?
Held that: - there are no universal tests for testing of levy of Sales Tax or Service Tax and each contract is to be examined with respect to its own terms.
It is apparent from the agreement that, (i) No exclusive right to use the trade mark Swastik has been given to M/s New Sahyadri Industries Ltd. The appellants are free to give this trade mark to other even in the same territory. (ii) M/s New Sahyadri Industries Ltd. are not free to permit use of the trade mark to anybody else i.e. they cannot sub-license. If M/s New Sahyadri Industries Ltd. wish to permit to any other support for use then they have to seek permission of the appellant. The trade mark cannot be assigned to anybody by M/s New Sahyadri Industries Ltd. While the agreement is for a period of 10 years, both parties have option to terminate the agreement by giving the notice of three months - The agreement in the instant case is an agreement of permissive use of the trade mark Swastik and no transfer of right to use of the said trade mark - the said transaction is liable to Service Tax under Finance Act, 1994.
Extended period of limitation - Held that: - It is a fact that in their Service Tax-3 returns for the relevant period, the Appellant had willfully mis-stated that they have received zero amount towards provision of this service - willful mis-statement on the part of the appellant stands established and thus extended period has been correctly invoked.
Penalty - Held that: - the elements for imposing the penalty are identical to those necessary to invoke the extended period of limitation. In these circumstances, no separate specific findings are needed for imposition of penalty under Section 78 of the Finance Act, 1994 - penalty upheld.
Appeal dismissed - decided against appellant.
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2018 (2) TMI 235 - CESTAT CHENNAI
Liability of service tax - sponsorship agreement - consideration received for providing stands / boxes inside the stadium - Held that: - appellants have not granted any right to the sponsors to display their products on the boxes / stands. So also there is no right given in the sponsorship agreement to display any advertisement. The sponsor has only right to display his name on the stand / box. Further, they are also given exclusive priority booking rights. The definition of sponsorship reveals that the activity carried out by the appellant by entering such sponsorship agreements are more akin to sponsorship service which are taxable only with effect from 1.5.2006. Further, these sponsorship services are in relation to sports events and are not taxable services as laid down under section 65(105)(zzzn) of the Finance Act, 1994 - the amount received as per sponsorship agreements for boxes and stands are not leviable to tax under Sale of Space for Advertisement and requires to be set aside.
Penalty - Held that: - the issue was interpretational and there was sufficient cause for not discharging the service tax liability - penalty set aside.
The demand in respect of sponsorship services needs to be verified and segregated from the total demand confirmed by the adjudicating authority - appeal allowed by way of remand.
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2018 (2) TMI 234 - CESTAT CHENNAI
Penalty u/s 78 - cleaning services - grievance of the department is that the Commissioner did not impose penalty (Rs.3,53,35,047/-) equal to that of the service tax demand - Held that: - it is seen that the respondent had raised strong contentions explaining for failure to discharge the service tax within due time. It was submitted by them that they could not make timely payment due to financial hardship as they had to first make payment to their employees. This was not considered by the adjudicating authority as a reasonable cause for invoking Section 80 of the Finance Act, 1994.
From the counter filed by the respondent, it is seen that they had already paid the balance of demand of ₹ 7,25,444/- as well as the penalty imposed under Section 77. It is their case that they have not been given the option of reduced penalty in terms of proviso to Section 78 of the Finance Act, 1994. It is correct that the Commissioner has not given the benefit of reduced penalty (25% of the demand of service tax) to the respondent.
The penalty imposed under Section 78 needs to be reconsidered for which we deem it fit to remand the matter to the Commissioner - appeal allowed by way of remand.
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2018 (2) TMI 233 - CESTAT CHENNAI
Business Auxiliary Service - failure to discharge service tax - charitable concern - Held that: - it is seen prior to 1.5.2006, the services rendered to a client by a commercial concern would only qualify as BAS. The services rendered to any person did not fall within the ambit of 'Business Auxiliary Service'. It is brought out from the records that appellant company is a registered under Section 25 of the Companies Act as a non-profit organization and therefore cannot be considered as commercial concern.
The Tribunal in the case of Raja Charity Trust [2017 (2) TMI 387 - CESTAT CHENNAI] had an occasion to analyze a similar issue and has taken the view that in cases where the assessee is not a commercial concern would not be covered by definition of 'Business Auxiliary Service' during the relevant period.
Demand not sustainable - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 232 - CESTAT CHENNAI
Refund claim of service tax paid - Renting of Immovable Property Services - for residential / accommodation purpose or otherwise - rejection on the ground that building that comprises of a lodging house also has a restaurant, banquet hall etc., and, therefore, would not fall within the meaning of hotel - whether appellants are eligible for the refund of service tax paid under the category of “Renting of Immovable Property Service? - Held that: - On perusal of the Lease Deed, we see that parts of the building have been specifically let out for payment of rent separately - It is seen that the Scheduled Property is rented out for running of Hotel, Lodging House and allied/related activities. The Restaurant, Coffee Shop etc., are facilities attached to the business of renting of Hotel.
The Lease Deed reveals that rent for each part of the building or in other words, the Rent for Restaurant, Coffee Shop, Permit Room, Bar etc., are fixed separately. Only that part of the building which is used for accommodations would fall within the exclusion part of the definition. It is not the case that the restaurant coffee shop, permit room/banquet hall etc., are fully available only for the exclusive use of the lodgers, who stay in the hotel. It is also not the contention that these facilities are not open for use by those who do not stay in the hotel or for that matter that the hotel does not rent out including hall etc., for functions hosted by non-lodgers.
Refund has been rightly rejected - appeal dismissed - decided against appellant.
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