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Service Tax - Case Laws
Showing 41 to 60 of 323 Records
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2018 (2) TMI 1448
Applicability of decision in the case Suresh Kumar Bansal and Others [2016 (6) TMI 192 - DELHI HIGH COURT] - claim of Revenue is that impugned order is not legal and proper, inasmuch as the said judgment was not “in rem”, rather it was “in-personnem” - Construction services - Held that: - the ld. Commissioner (Appeals) has taken the correct stand in deciding the appeals of the appellants - From the operative part of the impugned order, it transpires that there was no need for the Revenue to file any appeal against the impugned order, for the reason that the appeals of the appellant in context with the refund application were rejected by the ld. Commissioner (Appeals), especially in view of admittance of appeal by the Hon’ble Supreme Court - appeal dismissed - decided against Revenue.
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2018 (2) TMI 1447
Refund of service tax - rejection on the ground of time limitation - Section 11 B of the Central Excise Act, 1944 - Held that: - The statutory provisions contained in Section 11 B ibid provides the time limit of one year for filing the refund application - In this case, as per the explanation (B) (f) appended to Section 11 B, the relevant date should be reckoned from the date of payment of the Service Tax. Since, the refund application was filed by the appellant beyond one year from such relevant date, as per the mandates of Section 11 B, the refund application is clearly barred by limitation of time - The Hon’ble Supreme Court in the case of Doaba Co-operative Sugar Mills [1988 (8) TMI 103 - SUPREME COURT OF INDIA], held that if proceedings have been taken under the statue by the Department, the provision of limitation, prescribed under that statute will alone prevail with regard to applicability of the time limit for filing the refund claim.
The amount, now claimed as refund, has been deposited to Government account as service tax. Return of such amount is prayed for with the service tax Department under the provisions of Finance Act, 1994 read with Section 11 B of Central Excise Act, 1944. The authority examining the said claim is bound by the legal provisions of these Acts in discharging his duties.
Appeal dismissed - decided against appellant.
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2018 (2) TMI 1446
Refund of service tax paid - input services - gardening services - Held that: - in the permission granted by the Pollution control Board to appellant, there is no clause which requires the appellant to maintain a green belt of approximately 33% of the area for which they have sought permission for construction of Research and Development facility - refund allowed.
Fencing of the land leased out by the appellant - Held that: - the lower authorities were correct in coming to a conclusion that these services which were rendered by the service providers could not be correlated with the export of services of the appellant - Before the Tribunal also they are unable to correlate the said services rendered with export services from the appellant's premises - refund cannot be allowed.
Appeal allowed in part.
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2018 (2) TMI 1445
Validity of subsequent SCN - Intellectual Property Right Service - it was the contention of appellant that the Revenue having raised their earlier SCN was debarred from raising a subsequent SCN by invoking the larger period of limitation in respect of the said facts and circumstances - Held that: - There is no dispute about the fact that in respect of the same set of proceedings, an earlier SCN was issued under a different category of services. However, subsequently, with the introduction of Intellectual Property Service, being a taxable service, fresh proceedings were initiated by invoking the larger period of limitation.
The Hon’ble Supreme Court in the case of Nizam Sugar Factory Vs. Collector of Central Excise, A.P. [2006 (4) TMI 127 - SUPREME COURT OF INDIA] has categorically held that when the first show cause notice is issued, all the facts come to the knowledge of the Revenue, in which circumstances, subsequent show cause notices cannot be issued alleging suppression of facts on the part of the assessee.
The demand is barred by limitation - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1444
GTA service - Benefit of N/N. 32/2004-ST, dated 03.12.2004 - appellant were discharging service tax liability on 25% of the total freight charges paid by them - Department took the view that notification exemption is not available to appellant as there was no evidence to show that the conditions of the notification were fulfilled - Held that: - circular No.137/154/2008-CDA, dated 21.08.2008, clarifies that it is but evident that even for the past cases before the extension of benefit of 75%, abatement to GTA services unconditionally (by notification No.13/2008, dated 1.3.2008), the benefit of such abatement will be available to the appellant without requirement of any specific endorsement on every consignment note, but merely on general declaration from GTA.
In the instant case, from the facts it is seen that the appellants have obtained such undertaking letters from concerned transporters. This being so, the confirmation of demand is in contradiction to the clarifications of CBEC themselves vide circular dated 21.08.2008 - demand cannot sustain.
Reliance placed in the case of CCE, Allahabad Versus M/s. Sangam Structurals Ltd. [2015 (3) TMI 523 - CESTAT NEW DELHI], where it was held that conditions prescribed by the CBEC circular dated 27.7.2005 seem to go beyond the requirement of the exemption notification. It is settled law that CBEC circulars cannot restrict or expand the amplitude of an exemption notification nor can they add/subtract conditionalities thereto/there from.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1443
GTA service - Benefit of N/N. 32/2004-ST, dated 03.12.2004 - appellant were discharging service tax liability on 25% of the total freight charges paid by them - Department took the view that notification exemption is not available to appellant as there was no evidence to show that the conditions of the notification were fulfilled - Held that: - circular No.137/154/2008-CDA, dated 21.08.2008, clarifies that it is but evident that even for the past cases before the extension of benefit of 75%, abatement to GTA services unconditionally (by notification No.13/2008, dated 1.3.2008), the benefit of such abatement will be available to the appellant without requirement of any specific endorsement on every consignment note, but merely on general declaration from GTA.
In the instant case, from the facts it is seen that the appellants have obtained such undertaking letters from concerned transporters. This being so, the confirmation of demand is in contradiction to the clarifications of CBEC themselves vide circular dated 21.08.2008 - demand cannot sustain.
Reliance placed in the case of CCE, Allahabad Versus M/s. Sangam Structurals Ltd. [2015 (3) TMI 523 - CESTAT NEW DELHI], where it was held that conditions prescribed by the CBEC circular dated 27.7.2005 seem to go beyond the requirement of the exemption notification. It is settled law that CBEC circulars cannot restrict or expand the amplitude of an exemption notification nor can they add/subtract conditionalities thereto/there from.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1416
Refund of unutilized CENVAT credit - denial on the ground of Non-Registration of premises - Whether the decision of CESTAT in allowing refund of Cenvat credit even without registration is correct?
Held that: - Reliance placed in the case of mPortal India Wireless Solutions (P) Ltd. Vs. Commissioner of Service Tax, Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT], where it was held that Registration not compulsory for refund - there was no error, in the order of the tribunal, and accordingly answered the substantial questions of law, against the revenue.
Appeal dismissed - decided against Revenue.
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2018 (2) TMI 1415
Levy of sales tax/VAT or service tax? - Hire Agreement - appellants had entered into Hire Agreement with parties for supply of Diesel Generators - Department took the view that the said services rendered by appellants to their customers i.e. supply of diesel generators are classifiable under the category of "supply of tangible goods" and that appellants are liable for payment of service tax on the consideration received for such services from 16-05-2008 onwards - whether the transaction entered into by the appellants with the hirers of DG sets would be in the nature of a transaction involving transfer of possession and control of goods to the users or is only one that allows the other users to use the goods without giving legal right of possession and effective control?
Held that: - both before and after 01-07-2012, it can be reasonably concluded that supply of tangible goods inter-alia with the right to use then for any purpose and which transaction is deemed as a sale will attract only sales tax levy. However, where such supply does not extend to transfer of possession and effective control of overall goods, such a transaction would not become a deemed sale but a service. This is exactly what CBEC had clarified in their circular No.334/1/2012-TRU, dated 16.03.2012.
The agreements only set out the terms of the hire and in no way put any shackles on the hirer for full enjoyment of the DG set hired by the hirers or for that matter, bring about less than complete transfer of possession and control. It is also noteworthy that the hirer pays "hire charges" and not "service charges". We also find merit in the appellant's contention that the deposit amount is also paid by the hirers, which is the practice only in cases of leasing contracts which are deemed sale transactions and not the cases where only service is provided or received - It is also not the case of the department that the appellants are not discharging sales tax/VAT on the transactions. In fact the impugned order concedes that appellants have already paid VAT under APVAT Act on the entire hiring charges. Further, the adjudicating authority has refrained from imposing penalty under the Finance Act, 1994 on the grounds that appellants were paying VAT under the APVAT Act on the very same transaction.
The impugned transaction involving supply of DG sets on hire basis to various hirers is nothing but supply of tangible goods with transfer of both possession and control of the goods to the users of the goods. These transactions have been ruled as "deemed sale of goods" for the purpose of APVAT Act by the concerned Advance Ruling Authority. Appellants have also been discharging VAT on the hire charges under APVAT Act. Hence, this is the case of supply of tangible goods for use, with legal right of possession and effective control vesting with the hirer, required to be treated as "deemed sale of goods", hence cannot be considered as "supply of tangible goods for use of service" for the purposes of Section 65(105) (zzzz) of the Finance Act, 1994 for the period upto 01-07-2012 or as taxable service for the purpose of Section 65B (44) of the Finance Act, 1994 after 01-07-2012.
Reliance placed in the case of BHARAT SANCHAR NIGAM LTD. (BSNL) Versus UNION OF INDIA [2006 (3) TMI 1 - Supreme court].
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1414
Packaging Service - the appellant received charges for carrying out the activity of blending and packing of tea on behalf of M/s TATA Tea Ltd. - Department were of the opinion that the lease agreement by which the appellant made premises available on lease to M/s TATA Tea Ltd. was nothing but a camouflage for receiving additional consideration for the activity of packing - cum duty benefit.
Cum duty benefit - Held that: - the appellant has carried out the activity of blending and packing tea on behalf of M/s TATA Tea Ltd. It stands admitted by the appellant that the activity carried out was covered within the definition of the service of packaging and hence they have admitted their liability to pay service tax on such activity - reliance placed in the case of COMMR OF C. EX & CUS., PATNA Versus ADVANTAGE MEDIA CONSULTANT [2008 (3) TMI 59 - CESTAT KOLKATA], where it was held that when no tax is collected separately, the gross amount has to be adopted to quantify the tax liability treating it as value of taxable service plus service tax payable - the cum tax benefit allowed.
Penalty - Lease agreement - receipt of consideration towards lease rent - Held that: - the appellant w.e.f. that date has already started discharging the service tax liability under the above service and under the lease agreement. In the result, we are of the view that the service tax liability arises on the consideration received under the lease agreement only w.e.f. 01/06/2007 and the demand prior to this date is set aside - the service tax under rent of immovable property has already been paid alongwith interest prior to issue of SCN - penalty waived.
Appeal allowed in part.
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2018 (2) TMI 1413
Real estate agent service - consideration received by them to change the name of the allottee/owner of a unit in the building and managed by them - Held that: - an identical issue has come up before the Tribunal in the case of M/s MGF Developments Ltd. Vs CCE, Delhi [2018 (2) TMI 1048 - CESTAT NEW DELHI], where it was held that the promoter and manager of such property cannot be taxed as real estate agent for the consideration received to substitute the name of the owner / allottee in their records - appeal dismissed - decided against Revenue.
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2018 (2) TMI 1412
Contractual arrangements with Indian Railways and Catering Tourism Corporation Limited (IRCTC) - Revenue entertained a view that they are not discharging Service Tax on certain activities undertaken/considerations received - Cleaning Services - Held that: - It is clear that cleaning is with reference to objects or premises of commercial or industrial building, factory and premises thereof. The original authority gave a reason that railway coaches are either standing on platform or running on the track and the same are to be considered as object on the premises for Indian railway holding railway coaches and contracts constituents of capital assets and machinery of Indian railway, the original authority held cleaning of such railway coaches will be considered as cleaning of commercial premises - the interpretation of the original authority is far fetched and not sustainable in view of the plain meaning of the statutory definition for tax entry.
Supply of Bed Rolls to Passengers of Railways - Held that: - In M/s Foodworld Railways and Institutional Caterers [2014 (12) TMI 662 - CESTAT NEW DELHI], the Tribunal held that such services cannot be considered as BSS. It is more appropriately classifiable under Business Auxiliary Service as it is essentially a customer care service provided on behalf of the client - demand not sustainable.
Outdoor Catering Service - Held that: - the tax is paid on received amount not on billed amount which included element of VAT - The jurisdictional authority can verify the documents to satisfy the correctness of quantification of tax liability as claimed by the appellant - matter on remand.
Supply of newspaper to passengers in Rajdhani train - Held that: - the original authority upheld the tax liability on the consideration received for supply of newspaper only on the ground that it is part of a composite contract of catering and on board service. We note that the reasoning adopted by the original authority to consider the supply of newspaper as part of their catering service is not sustainable - tax liability do not sustain.
Extended period - penalty - Held that: - The demand for extended period also cannot be sustained in respect of cases where service tax liability was affirmed in connection with service to Railways/IRCTC - the penalties imposed on the appellant are also set-aside.
Appeal allowed in part.
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2018 (2) TMI 1411
Levy of service tax - rent–a-cab services - Held that: - it appears that w.e.f. 16/10/1998, the definition of rent a cab scheme operator means any person engaged in the business operating cab on rent basis - In the instant case, the learned Counsel was unable to show any contract with the user.
Time limitation - Held that: - the appellant had not disclosed the value of remunerated amount that they are not discharging/paying service tax on the remunerated amount to the department despite clear provisions of law on the issue, it is proved beyond any doubt that they had suppressed this fact from the department, with intent to evade payment of service, as providing of taxable service was remain unearthed if searches premises of the appellant was not conducted by the department - extended period rightly invoked.
Penalty u/s 80 - Held that: - full service tax liability with interest has been paid before issue of demand notice - penalty waived by invoking section 80.
Appeal allowed in part.
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2018 (2) TMI 1410
Non-payment of service tax - only point on which the present demand is made is that there is difference between the statutory returns and the annual balance sheet - Held that: - Admittedly, the appellants have more than one business premises through which the taxable service were provided. These were registered with the Department and discharging the service tax. The balance sheet of the appellant as a whole did not distinguish the different service centres. Further, the SCN did not give any reason to allege short levy except the difference between balance sheet and the ST-3 returns.
The burden of explaining the difference amount being not taxable income has been shifted to the appellant. This will be against the very basis of tax levy. It is the Department which alleged short payment and at least basic preliminary supporting evidence of such short payment has to be made so that the appellant can defend their case.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1409
Liability of service tax - consideration received for transferring the said trade mark rights - Held that: - Admittedly, the appellant transferred the right to use the registered brand name to HWL in 1975. This is not disputed. The continuous usage of such right by HWL cannot be construed as continuous rendering of taxable service on the part of the appellant.
Intellectual Property Service means transfer temporarily or permitting the use or enjoyment of any IPR. Admittedly, such transfer happened before the introduction of the tax entry in the present case. The tax entry is not for continuous usage of Intellectual Property but on the event of transfer or permission.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1408
Liability of service tax - Business Auxiliary Service - reverse charge mechanism - expenditure incurred by the appellant in setting up of certain branch offices in foreign countries like Bangladesh, Ukraine etc. - Held that: - similar dispute came before the Tribunal for tax liability under the very same tax entry in Torrent Pharmaceutical Ltd. [2014 (12) TMI 41 - CESTAT AHMEDABAD]. The issue of the expenditure incurred by the appellant with reference to the branch office located abroad, which was involved in activities, which may fall under business auxiliary service was considered by the Tribunal - the legal fiction of considering a branch of an assessee as a separate establishment is not to tax a service rendered to its head office. Further, here there is no such service also has been identified with supporting evidence - the tax liability under BAS cannot be sustained.
Liability of service tax - advertising services availed by the appellant in pursuance of contract with various foreign service providers who advertised and promoted the product of the appellant in foreign countries - reverse charge mechanism - Held that: - It is clear that statutorily such services are considered for taxation based on the location of the service recipient. Such being the clear position as per law in the present case the services being utilized by the appellant as a manufacturer of the said goods, which are exported and marketed in the places where the advertisement are held, the tax liability on such services are correctly made against the appellant on reverse charge basis - extended period and penalty cannot be imposed.
Appeal allowed in part.
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2018 (2) TMI 1407
Consultancy engineering service - Certain expenditure shown in the books of the appellant with reference to income and expenditure of projects in India is sought to be taxed as a consideration for consulting engineer service - Revenue entertained a view that expenditure incurred/shown in the accounts of appellant against consultancy fees and technical fees, which was further taken into account by LIL, Canada in the overall income and expenditure is liable to be taxed under the category of engineering consultancy service on reverse charge business - Held that: - the whole of the income shown in the books of accounts of the appellant, though the same is accrued to LIL, Canada has suffered tax under the category of consultancy engineering service. An expenditure, which is part of the same accounting for income, cannot be taxed for the same service, even under reverse charge tax. Secondly, the appellant has no agreement or arrangement with LIL, Canada to receive any consultancy service. No such allegation has been made. LIL, Canada apparently, procured such consultancy service from various consultants, which in turn were used for rendering service to Indian clients. In fact, such services were effectively managed and utilized by LIL, Canada. This is expenditure for LIL, Canada, which is also reflected in the appellant’s accounts as per the requirement. The full income on consultancy service, as already noted, has suffered Service Tax. This is an admitted fact. The expenditure to provide such service cannot be put to Service Tax even under reverse charge basis. There is no basis either on fact or law to sustain such confirmation.
Manpower Supply Service - tax liability under manpower supply in respect of staff deputed by LIL to India to render the services in terms of the agreement with the Indian clients - Held that: - The Hon’ble Allahabad High Court in the case of Computer Science Corporation India Pvt. Ltd. [2014 (11) TMI 125 - ALLAHABAD HIGH COURT] held that in such arrangement, the deputation of employee for executing work cannot be considered as a manpower supply. It was held that the employer cannot be considered as a manpower supply agency - neither the appellant nor LIL, Canada can be considered as a manpower supply agency - tax liability cannot sustain.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1406
Valuation - abatement of value - N/N. 15/2004-ST dated 10.09.2004 and No.1/2006-ST dated 01.03.2006 - Commercial or Industrial services - Held that: - the matter has come up before the Tribunal in the case of Bhayana Builders Pvt. Ltd [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] and it has been held that taxable consideration in the form of gross value in terms of Section 67 cannot include the value of materials supplied free of cost by the recipient of service - demand set aside.
Eligibility of the appellant to pay tax on cum-tax value for the period 10.09.2004 to 30.09.2005 - Held that: - the matter is before the original authority for re-computation of taxable value - it is fit and proper that the original authority can examine the other points, if any raised by the appellant before re-determining the tax liability in terms of the remand directions in the impugned order.
Appeal allowed in part and part matter on remand.
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2018 (2) TMI 1405
Rectification of mistake - power to review - Held that: - The error attempted to be pointed out by the Revenue has been taken note of by the Tribunal while passing the impugned Final Order. In such circumstances, to consider the application of such exemption, would amount to review of the Final Order. The Tribunal has no power to review its order.
The power of rectification is restricted to mistakes apparent from the record, calling for amendment of the order. The mistake must be obvious and patent one. In the application submitted by the Revenue there is no error apparent on the face of record, which requires rectification.
ROM application being devoid of merits is set aside.
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2018 (2) TMI 1399
CENVAT credit - credit of full service tax paid on partial reverse charge on input services - Alleging that as per N/N. 30/2012-ST dated 20.06.2012, the appellant was required to pay 75% of the Service tax amount as service recipient whereas, the service provider was required to pay 25% of the service tax liability, instead, since the service provider had paid the entire service tax amount(100%), therefore, the appellant are not eligible to avail credit of the service tax paid by the service provider.
Held that: - the appellant though required to pay 75% of the service tax liability, on receiving the man-power supply service from the service provider, however, initially the entire amount of service tax was paid by the service provider and later recovered from the appellant by indicating the same in the invoice - appellant eligible for credit.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1325
Valuation of taxable service - works Contract - inclusion of FOC material - Section 67 of Finance Act - Commercial or Industrial Construction Service - lot of materials/goods are also used in the construction of building or civil structure - includibility of material/goods element - N/N. 15/2004-ST dated September 10, 2004 - whether the value of goods/materials supplied or provided free of cost by a service recipient and used for providing the taxable service of construction or industrial complex, is to be included in computation of gross amount charged by the service provider, for valuation of taxable service?
Held that: - For valuation of taxable service, provision is made in Section 67 of the Act which enumerates that it would be ‘the gross amount charged by the service provider for such service provided or to be provided by him’. Whether the value of materials/goods supplied free of cost by the service recipient to the service provider/assessee is to be included to arrive at the ‘gross amount’, or not is the poser. On this aspect, there is no difference in amended Section 67 from unamended Section 67 of the Act and the parties were at ad idem to this extent.
Explanation 3 to subsection (1) of Section 67 removes any doubt by clarifying that the gross amount charged for the taxable service shall include the amount received towards the taxable service before, during or after provision of such service, implying thereby that where no amount is charged that has not to be included in respect of such materials/goods which are supplied by the service recipient, naturally, no amount is received by the service provider/assessee. Though, sub-section (4) of Section 67 states that the value shall be determined in such manner as may be prescribed, however, it is subject to the provisions of sub-sections (1), (2) and (3). Moreover, no such manner is prescribed which includes the value of free goods/material supplied by the service recipient for determination of the gross value.
The service tax is to be levied in respect of ‘taxable services’ and for the purpose of arriving at 33% of the gross amount charged, unless value of some goods/materials is specifically included by the Legislature, that cannot be added - exemption under Section 93 can only be granted in respect of those activities which the Parliament is competent to levy service tax and covered by sub-clause (zzq) of clause (105) and sub-clause (zzzh) of clause (105) of Section 65 of Chapter V of the Act under which such notifications were issued.
The value of the goods/materials cannot be added for the purpose of aforesaid notification dated September 10, 2004, as amended by notification dated March 01, 2005 - appeal dismissed - decided against Revenue.
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