Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 903 - CESTAT NEW DELHILevy of service tax - declared service or not - Debit notes raised to offset the excess credit in the ledger account - Notice pay recovery - Cheque return penalty - Liquidated damages - HELD THAT:- A service conceived in an agreement where one person, for a consideration, agrees to an obligation to refrain from an act, would be a 'declared service' under section 66E(e) read with section 65B(44) and would be taxable under section 68 at the rate specified in section 66B. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in Section 66E(e). Debit notes - HELD THAT:- The debit notes are mere book adjustments to balance the ledger. The appellant has merely followed the price reduction method with the suppliers. In terms of the agreement price is agreed upon on the commitment by the supplier to supply the goods. However, upon delivery, the price of the delivered goods is reduced if it falls short in quantity or quality. Such price reduction is effected through debit notes issued by the appellant to the suppliers. It is apparent that no consideration is paid. The Tribunal in M/S FUTURA POLYESTER LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE. CHENNAI-I [2013 (1) TMI 658 - CESTAT CHENNAI] also held that no tax can be levied merely because of the entries made in the books of account. In the present case, there is no separate agreement and the provisions of section 66E(e) have been applied in terms of the purchase order, as is clear from paragraph 3 of the show cause notice. Notice pay recovery - HELD THAT:- The Madras High Court in GE T & D INDIA LIMITED (FORMERLY ALSTOM T & D INDIA LIMITED) VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE [2020 (1) TMI 1096 - MADRAS HIGH COURT] in no uncertain terms, also held that notice pay recovery is not subject to service tax. Cheque bounce penalty - HELD THAT:- Circular No. 178/10/2022-GST dated-3-8-2022 has clarified that cheque bounce penalty is not subject to Goods and Service Tax and the reasoning would also be applicable to service tax - The Tribunal in M/S. ROHAN MOTORS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, DEHRADUN [2020 (12) TMI 1014 - CESTAT NEW DELHI] also held that cheque dishonour amount is deterrent in nature and not towards consideration for any service. Liquidated damages - HELD THAT:- Though the department had filed Civil Appeal No. 2372 of 2021 before the Supreme Court in COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS SOUTH EASTERN COALFIELDS LTD [2023 (8) TMI 606 - SC ORDER] to assail the decision of the Tribunal rendered in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] but in view of the Circular dated 28.02.2023 issued by the CBIC, the Civil Appeal was dismissed as withdrawn on 11.07.2023. Thus, as none of the four demands can be sustained, the order dated 08.03.2018 passed by the Commissioner is set aside - appeal allowed.
|