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Service Tax - Case Laws
Showing 301 to 320 of 323 Records
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2018 (2) TMI 144 - CESTAT CHENNAI
Valuation - includibility - reimbursable expenses - Banking and Other Financial Services - Held that: - the issue has been decided by the Hon'ble High Court of Delhi in the case of Intercontinental Consultants & Technocrats Pvt. Ltd Vs UOI as well as CST Chennai Vs Sangamitra Services Agency [2012 (12) TMI 150 - DELHI HIGH COURT], where it was held that the reimbursable expenses not includible in the assessable value - impugned order does not call for any interference - appeal dismissed - decided against appellant-Revenue.
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2018 (2) TMI 143 - CESTAT CHENNAI
CENVAT credit - input services - rent-a-cab service - tour operator service - renting of immovable property - general insurance service (medi claim) - event management service - denial on the ground of nexus - Held that: - the definition of input services prior to 1.4.2011 included the words “activities relating to business” and therefore had a wide ambit covering almost all services - There are plethora of decisions which covers both the services which are impugned in the present appeal - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 142 - CESTAT CHENNAI
Liability of service tax - reimbursement expenses incurred towards catalogue printing charges, cost of tender document, crane charges, legal opinion charges, freight charges, vendor registration charges etc. - Held that: - the amounts received are actual reimbursements of specified expenditure, no service tax can be charged on the same. As such, the amount is only being reimbursed to them, hence the judgment of the Hon’ble Madras High Court in the case of Commissioner of Service Tax Vs. Sangamitra Services Agency [2013 (7) TMI 862 - MADRAS HIGH COURT] would be squarely covered in favor of them, where it was held that if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration / Commission - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 141 - CESTAT NEW DELHI
Classification of services - Cargo Handling Activity or otherwise? - mis-interpretation of provisions of Section 2 (f) of the Central Excise Act, 1944 - Held that: - the activity of loading, unloading, packing and unpacking etc. done by the respondent were within the factory premises and since those goods were not meant for loading into any vehicle for outward movement, the same should not fall under the purview of Cargo Handling Service - impugned order upheld - appeal dismissed - decided against Revenue.
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2018 (2) TMI 86 - MADRAS HIGH COURT
Validity of show cause notice - Liability of service tax - activity of generating electricity - negative list - opportunity of being heard - principles of natural justice - Held that: - The petitioner conceded to the request made by the respondent for furnishing copies of invoices which were furnished on 22.09.2015 and 23.09.2015. Immediately thereafter, the Miscellaneous Petition has been filed on 09.10.2015 for modification. One more reason which will work against the writ petitioner is that though the Court stipulated a time frame for the second respondent to pass orders, the petitioner did not approach the Court complaining of any violation of the time frame fixed - petitioner was not prejudiced in any manner on account of no action being taken by the Revenue between 16.09.2014 and 02.09.2015.
Whether the petition for modification is maintainable? - Held that: - There can be no dispute to the legal position that a review petition is not an appeal in disguise. The grounds of review are clearly circumscribed under Order 47 Rule 1 CPC. However, it has to be borne in mind that the present proceedings is a writ proceedings arising under a taxation statute. The prayer sought for in M.P.No.1 of 2015, in my considered opinion, cannot be construed as a prayer to review the order passed in the writ petition.
On a reading of the proceedings dated 28.03.2014, it is clear that it is only an intimation. This is on account of the fact that the petitioner stopped paying service tax from 01.01.2014. Therefore, the second respondent requested the petitioner to pay service tax, failing which stated that action for recovery will be initiated. Thus, the communication/intimation dated 28.03.2014 cannot be treated as a show cause notice nor can be treated as a demand but only as an intimation - the petition for modification cannot be construed as a review petition but only to modify the earlier order by permitting issuance of a show cause notice instead of treating the communication dated 28.03.2014 as a show cause notice, which is not feasible as it is not in accordance with Section 73(1) of the Act.
The petitioner had pressed for hearing of the modification petition. However, on 04.02.2016, the writ petition in W.P.No.36494 of 2015 alone was listed and M.P.No.1 of 2015 in W.P.No.9496 of 2014 was not listed, and the writ petition was disposed of. The revenue cannot be prejudiced on account of non-listing of M.P.No.1 of 2015. In the factual background could the respondent Department be faulted for issuing the impugned show cause notice, is the conduct of the Department in violation of the order in W.P.No.9496 of 2014 or contumacious. The answers to all the above queries should lean and be answered in favour of the Revenue - there is no violation of the order in W.P.No.9496 of 2014 much less willful violation in issuing the impugned show cause notice. Thus the impugned show cause notice can be adjudicated as according to law, giving liberty to the petitioner to canvass all points.
The petitioners are granted thirty days time from the date of receipt of a copy of this order to submit their reply to the show cause notice which shall be adjudicated in accordance with law after affording an opportunity of personal hearing to the authorized representative of the petitioner.
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2018 (2) TMI 85 - RAJASTHAN HIGH COURT
Whether dismissal of appeal by rejecting the application seeking condonation of delay in filing of appeal in the facts and circumstances of the case and in law could not be countenanced and appeal needs to be restored to the file of the CESTAT for decision afresh affording opportunity of hearing to the appellant to secure the ends of justice?
Held that: - Taking into account that the appellant is a local authority and the liability which is fastened on the local authority is required to be considered on merits, without entering into merits of the case, remit back in the Tribunal to proceed in the matter on merit after condoning delay in view of the fact that appellant is local authority and face a hazardous procedure and being a service tax at the relevant time was a new subject and every officer was not acquainted with the law in view of special case, we condone the delay on application before Tribunal - appeal disposed off.
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2018 (2) TMI 84 - CESTAT NEW DELHI
Cargo Handling Services - sub-contract - the appellant did not discharge the Service Tax on the consideration received by them on the ground that the entire value is already included by the main contractor, M/s DARCL, for payment of service tax by them - Held that: - once the main contractor is paying service tax, the sub-contractor, whose entire value of service is sub-sumed in the value on which the Service Tax is paid by the main contractor, is not required to pay service tax separately - the service rendered is covered by the definition of ‘Cargo Handling Services’ and consequently, the liability for payment of Service Tax has arisen on the part of the appellant - The services provided by the sub-contract and used by the main service provider is liable for payment of Service Tax in the hands of sub-contractor.
Extended period of limitation - Held that: - the department is not justified in invoking the extended time limit to demand service tax from the appellant. Moreover, the entire details of amount has already been recorded in the books of account of the appellant and the same has been noticed only during the period of audit by the department - extended period not invocable.
For quantifying the demand, as above, the matter is remanded to the adjudicating authority - issue of penalty also to be redetermined - appeal allowed in part by way of remand.
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2018 (2) TMI 83 - CESTAT NEW DELHI
Liability of service tax - amounts recovered by book adjustments from the subsidiary prior to the amendment - the department was of the view that the appellant was liable to pay Service Tax on the amount which was outstanding from the subsidiary company as on 16.05.2008 - Held that: - the explanation inserted in the statute through which the taxing net has been widened, cannot be held to be retrospective in operation. Through the amendments carried out in Section 67 of the Act as well as Rule 6(1) of the Service Tax Rules, effectively the liability to pay Service Tax has been imposed in respect of transactions with the subsidiary or associate enterprises. Such an amendment is definitely having the effect of widening the tax net. In the light of the Apex Court’s decision, we are of the view that the demand raised cannot be sustained, except for the adjustments made on or after 10.05.2008. The Service Tax liable for the period on or after 10.05.2008 has been paid by the appellant along with the interest and is not being challenged - demand with penalty set aside.
Liability of service tax - certain services received from foreign service providers - appellant discharged service tax by utilising CENVAT credit - Held that: - Once such Service Tax is paid in cash, the appellant will be entitled to take Cenvat credit of the same. In the present case, instead of making the payment in cash, the liability was discharged by making use of the Cenvat credit - The statute specifically provides that Service Tax payable on reverse charge basis in terms of Section 66(A) of the Act is required to be discharged by making payments in cash. Once such Service Tax is paid in cash, Cenvat Credit Rules allow credit of the same. This cannot be interpreted to mean that it is a revenue neutral situation.
Extended period of limitation - Held that: - the Revenue is justified in invoking the extended period of limitation in the present case to raise the demand of ₹ 1,93,74,146/-. However, the appellant will have the option to avail the Cenvat credit of this amount after payment of the same in cash.
Penalty u/s 78 - Held that: - the demand for the period prior to 10.05.2008 has been set aside by us as above. The balance amount of ₹ 12,66,876/- already stands paid by the appellant. Consequently, we find that the appeal filed by the Revenue is without merit and is dismissed.
Appeal allowed in part.
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2018 (2) TMI 82 - CESTAT MUMBAI
Classification of services - Business Auxiliary Services or air travel agent service?- appellant is engaged in rendering of services as air travel agent and registered under the category of air travel agent services - Held that: - the services rendered by the appellant it booking of passes for travel by air which is squarely covered by the definition of air travel agency service as defined under Section 65(105) - In view of the statutory definition, any activity in relation to booking of passes by air travel agent would be covered under air travel agency services . Whether the ticket is bought directly from the airline or through the GSA the same would not make any difference.
Also, the issue squarely covered by the decision in the case of Commissioner of Central Excise, Goa v. Zuari Travel Corporation [2013 (7) TMI 911 - CESTAT MUMBAI], where it was held that The activity undertaken by respondent herein, who is a sub-agent of the IATA agent comes under Air Travel Agents Services or Business Auxiliary Services.
The impugned order classifying the service under business auxiliary service is not sustainable in law - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 81 - CESTAT CHENNAI
Penalty u/s 78 - renting of immovable property service - conflicting decisions on the issue - Held that: - the appellant had not paid the amount of ₹ 71,207/- only because they believed that since the building was used by educational institution, they need not discharge the service tax liability with regard to the rent received from such building - there were much confusion whether the services were subject to levy of service tax since there were conflicting decisions on the said issue - penalty set aside - appeal allowed.
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2018 (2) TMI 80 - CESTAT CHENNAI
Commercial or Industrial Construction Service - completion and finishing services - period June 2005 to March 2008 - Held that: - Hon'ble Supreme Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] held that the appellants will not be liable to pay service tax prior to 1.6.2007 - For the period from 31.6.2007 to 31.3.2008, considering the services as works contract service, they would be eligible for composition scheme.
The tax liability, after application of composition scheme, has already been discharged by the appellant. Hence there is no further liability that is required to be paid by the appellant. For this reason, there shall be no further tax liability beyond the amount already paid by the appellant - there is no cause for imposition for penalty for which reason the penalty imposed under section 78 is set aside.
Appeal allowed in part.
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2018 (2) TMI 79 - CESTAT CHENNAI
Liability of service tax - commission/amounts paid to foreign agent - reverse charge mechanism - Held that: - the period involved is prior to 18.4.2006 on which date Section 66A came to be introduced in the Finance Act, 1994 - The issue whether the assesse is liable to pay service tax under reverse charge mechanism on commission/amounts paid to foreign agent stands settled in favour of the assessees in the judgment of Indian National Shipowners Association [2008 (12) TMI 41 - BOMBAY HIGH COURT], where it was held that Before insertion of section 66A with effect from 18-4-2006, there was no authority to levy service tax on Import of service.
Appeal dismissed - decided against Revenue.
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2018 (2) TMI 78 - CESTAT CHENNAI
Penalty - GTA services availed by the appellant for transportation of mined iron ores within and outside the mining area - Held that: - in the present case, the adverse factors like suppression of facts, mis-statement or fraud or collusion are not present. Therefore, even though the extended period has been invoked in the proceedings, absence of these factors would mean that the appellant should not be penalised with an amount equal to the duty determined as envisaged under Section 78 of the Finance Act, 1994 - there does exist reasonable and justifiable cause in the failure of the appellants to have discharged tax liability when they should have. However, on being pointed out by the Department, they have paid up the differential tax liability along with interest thereon - penalty u/s 78 do not sustain - appeal allowed in part.
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2018 (2) TMI 77 - CESTAT CHENNAI
Penalties - Business Auxiliary Services - services as a Commission Agent - department was of view that the commission paid to foreign agent is liable to levy of service tax under reverse charge mechanism - Held that: - issue whether assesse is liable to pay service tax under reverse charge mechanism on the commission paid to foreign agents was under much dispute during the relevant period. Section 66A was introduced with effect from 18.04.2006 and the Hon'ble Bombay High Court in the case of Union of India Vs. Indian National Ship Owners Association [2010 (12) TMI 12 - Supreme Court of India] observed that assesse is not liable to pay service tax prior to introduction of Section 66A.
During the relevant period there was much confusion as to the levy of service tax on commission paid to foreign agent. Being an interpretational issue, the penalties imposed, except that of Section 77 are unwarranted, and requires to be set aside - appeal allowed in part.
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2018 (2) TMI 76 - CESTAT CHENNAI
Classification of services - Export of service or not - The commercial services to be rendered by the GSA are specified in the agreement. The agreement portion under the caption 'Commission to GSA' contains various commissions applicable to GSA. The Ethiopian Airlines shall pay GSA normal and Overriding Commission for Air transportation over the service of Ethiopian Airlines sold only in the allowed territory by the GSA or sub-agents on Ethiopian Airlines traffic documents/ticket stock - whether the service would be classified under Business Auxiliary service or Air Travel Agent Service? - Held that: - the matter has already been analysed, considered and decided by this very Bench in the case of M/s. Arafaath Travels Pvt Ltd. [2017 (8) TMI 554 - CESTAT CHENNAI], where it was held that Evidently, the commercial services provided by the appellant, inter alia, soliciting, promoting and selling passenger air transportation and cargo and mail transportation for Saudia is very much a Business Auxiliary Service, ordered by Saudi Arabian Airlines, Jeddah, to benefit all such service flowing to Saudias business - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 24 - MADRAS HIGH COURT
Principles of Natural Justice - condonation of delay in filing appeal - delay in filing appeal due to sickness of petitioner - Held that: - it appears that there is a mistake, which had occurred even at the stage of issuance of the SCN. However, had the petitioner been vigilant, he could have placed necessary material to show that he is not liable to pay the service tax as demanded by the first respondent. Nevertheless, due his ailment and since he is bedridden, probably he was unable to take effective steps. Thus, taking note of the communication given by the second respondent dated 06.8.2014, this Court is inclined to grant one more indulgence to the petitioner to place the facts before the first respondent - appeal allowed by way of remand.
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2018 (2) TMI 23 - DELHI HIGH COURT
Extended period of limitation - Penalty for non-compliance with the provisions of FA, 1994 - whether the Appellate Tribunal fell into error in holding that invocation of the extended period under proviso to Section 73(1) of the Act in respect of two services, i.e. management, maintenance and repair services and mandap keeper services is justified in the facts and circumstances of the case?
Held that: - it is evident that failure to pay tax is not a justification for imposition of penalty. Also, the word „suppression’ in the proviso to Section 11A(1) of the Excise Act has to be read in the context of other words in the proviso, i.e. “fraud, collusion, wilful misstatement” - there must be deliberate suppression of information for the purpose of evading of payment of duty. It connotes a positive act of the assessee to avoid paying excise duty. The terms „mis-statement’ and „suppression of facts’ are preceded by the expression „wilful’. The meaning which has to be ascribed is, deliberate action (or omission) and the presence of an intention. Thus, invocation of the extended limitation period under the proviso to Section 73(1) does not refer to a scenario where there is a mere omission or mere failure to pay duty or take out a license without the presence of such intention.
In the present case, the revenue argues that appellant wilfully suppressed the value of taxable services and thus did not discharge its liability of paying the service tax on same. The contention of the appellant is that the appellant was under a bona fide belief that the appellant was not liable for payment of Service Tax for the Mandap Keeping and Management, Maintenance and Repair Services.
The Revenue has not been able to prove an intention on the part of the appellant to evade tax by suppression of material facts. In fact, it is clear that the appellant did not have any such intention and was acting under bona fide beliefs. For these reasons, it is held that the revenue cannot invoke the proviso to Section 73(1) of the Finance Act to extend the limitation period for issuing of SCN. The SCN was issued on 24.10.2008. The undischarged liability for payment of service tax with respect to Mandap Keeper Service and Management, Maintenance and repair services alleged in the SCN is for the period 2004-06 and 2005-08 respectively. Since the proviso to Section 73(1) cannot be invoked the SCN had to be served within one year from the relevant date. Therefore, the SCN with respect to short-payment of service tax for Mandap Keeper Service for the years 2004-2006 is barred by limitation. The SCN with respect to short- payment of service tax for Management, Maintenance and Repair Services for the years 2005-2007 is also barred by limitation.
The SCN for the year 2007-2008 is, however, not barred by the limitation period of one year and the assessee is liable to pay service tax on the same.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 22 - CESTAT CHENNAI
Liability of service tax - expenses incurred by the appellants which is claimed as reimbursable expenditure from their principal during the course of providing C&F Agents Service - Held that: - actual reimbursable expenditure incurred by the C&F Agents on behalf of the principal under a contractual arrangement is not to be included in the taxable value at the hands of C&F Agents. The condition for such exclusion is that the expenditure should be on behalf of the principal and it should be as per a pre-arrangement and payment should be on actual basis only, as submitted by the department - In the present case, the appellants are pleading for fulfillment of these conditions. As such, there is no justification to include such actual reimbursable expenditure in the taxable value at the hands of the appellants.
Liability of service tax - GTA Service for goods transported by the principal to the premises managed by the appellant - Held that: - the freight is paid by PEIL through their agent (i.e., appellants) for transportation of such goods. In such a situation, it is PEIL, who is liable to pay the freight, is apparently liable to pay service tax. The appellants cannot be considered as a ‘Consignor' or ‘Consignee' of the goods as they are acting only as an agent in the transaction of PEIL, who are manufacturing and selling the goods. In such a situation, provisions of section 2(1)(d)(v) will not apply to the appellants in the present case.
Delayed payment of service tax - short-payment of service tax with intention for evasion - Held that: - There is no misrepresentation or suppression by the appellants as they have not filed any statutory return covering this period, as the same is due only in Apr.'08. Delay in payment of service tax beyond the period as mentioned in Service Tax Rules, 1994 will attract interest. In the absence of any intentional violation, penalty under section 78 on such delay alone will not be justified. If at all, a penalty under section 76 my have application, which, in any case, has not been imposed in the present case.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 21 - CESTAT CHENNAI
Abatement - Commercial or Industrial Construction Service - Works Contract Service - N/N. 1/2006-ST - Held that: - It is not in dispute that the services were rendered prior to 01.06.2007. The show-cause notices pertaining to later periods have been issued, only because the receipts for the said services already completed by the appellants, were received after 01.06.2007 and the appellants reflected the receipts of the payments in their ST-3 returns - The issue whether "Works Contract Services"/ "Construction of Commercial or Industrial Construction Services" are subject to levy of service tax prior to 01.06.2007 - demand set aside - appeal allowed.
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2018 (2) TMI 20 - CESTAT CHENNAI
Levy of service tax - Consulting Engineering Services - sub-contract - Held that: - the Trade Notice / CBEC circular did clarify that the services when provided to a prime consultant would not attract service tax during the material time - identical situation was analyzed by the Tribunal in the case of OIKOS Versus COMMISSIONER OF C. EX., BANGALORE-III [2006 (10) TMI 379 - CESTAT BANGALORE] wherein it was unequivocally held that appellant therein being a sub-contractor, levy of service tax was not justified - appeal allowed - decided in favor of appellant.
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