Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 2228 - CESTAT NEW DELHI

2015 (10) TMI 2228 - CESTAT NEW DELHI - 2016 (42) S.T.R. 748 (Tri. - Del.) - Disallowance of CENVAT credit on medical insurance services and demand of interest alleging delay in payment of service tax on transactions with Associated Enterprises prior to 10.5.2008 Manpower Recruitment Appellant contends that it had to obtain insurance cover for employees who are provided temporarily to customers and they qualify as input services and they have rightly availed credit and has paid interest upon .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tutory provision for demanding service tax in respect of transactions between associated enterprises, immediately upon amendment, has been introduced only w.e.f. 10.5.08. Prior to 10.5.08, neither the Finance Act, 1994 not the Service Tax Rules, 1994 contain any provision enabling demand of service tax prior to the realization of taxable services, in any circumstances. This being so, it is not legally permissible to give retrospective effect to the Explanation inserted in Rule 6 of the Service T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a Beevi C.S., Member ( Judicial ) For the Appellant : Shri Harish Bindumadhavan, Advocate For the Respondent : Shri M.R. Sharma, AR ORDER Per Sulekha Beevi C.S. 1. The above appeal raises two issues for consideration (i) disallowance of Cenvat credit on medical insurance services (ii) demand of interest alleging delay in payment of service tax on transaction s with Associated Enterprises prior to 10.5.2008. 2. The appellant is engaged in providing services of manpower recruitment and are registe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncial Year 2006-2007 and 2007-08, the appellant received services from it s overseas affiliate and made entries in the books of account. Service tax pertaining to these book entries was paid by appellant in January 2009. Department entertained the view that as per amendment brought forth by the Explanation to gross amount charged w.e.f. 10.5.2008, the appellant is liable to pay service tax on the due date reckoned as per date of making the book adjustments and that when service tax was paid by a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

terest on delayed payment was also confirmed and also imposed penalty of ₹ 1000/- under Section 77 of the Finance Act, 1994. In appeal, the same was upheld by the Commissioner (Appeals). Aggrieved, the appellant is before the tribunal. 3. The disputed period with regard to the denial of Cenvat credit on medical insurance services is prior to 1.4.2011 when the definition of input services included activities relating to business. The appellant received insurance services for providing insur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ailed the credit. To fortify his arguments the learned Counsel relied upon the judgment in Commissioner of Service Tax, Bangalore Vs. M/s Team Lease Services (P) Ltd. 2014-TIOL-510-HC-KAR-ST. 4. The credit is seen denied in the impugned order observing that medical insurance service has no direct nexus with the output services. In a catena of decisions it has been held that, the definition of input service, as it stood during the relevant period (prior to 1.4.2011) covered every conceivable serv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ellant received services from overseas associate. They made book entries showing as amount payable for the consideration yet to be paid for these services. The actual payment for services received was made by appellant in 2011. The service tax for these services were paid in January 2009. According to the department the amendment brought forth w.e.f. 10.5.2008 clarified that gross value charged included book adjustments made and that therefore appellants are liable to pay service tax after due d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d, deduction from amount and any form of payment by issue of credit notes or debit notes and book adjustment, and any amount credited or debited, as the case may be, to any account, whether called suspense account or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise. Explanation inserted in Rule 6(1) of Service Tax Rules is as below: Explanation For the removal or doubts, it is hereby decla .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t. The appellant disputes the claim of interest prior to 10.5.2008 only. According to the appellant, they have deposited ₹ 2,94,277/- as interest applicable for the book adjustments which actually is excess payment, as the actual liability of interest for the admitted period would be only 266,695/-. The department is claiming payment of interest of ₹ 3,25,360/- for delayed payment. As per the Order-in-Original the book entries of the Financial Year 2006-07 and 2007-08 are considered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y as the assessee has been asked to pay the service tax on 05.06.2008 only which is perfectly in accordance with the provisions contained in Rule 6(1) of the Rules ibid. The department has not proposed to demand service tax from various dated in 2006-07 to 2007-08 itself when the book entries were made in the books of accounts of the assessee. I find that since the provisions have been clarified on 10.05.2008, the department has treated the entries made by them in 2006-07 to 2007-08 as having be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arises as soon as service is rendered although the service tax is required to be paid at the time of receipt /making of payment of consideration or as advances, before rendering of services. Section 68 of the Finance Act read with Rule 6 of the Service Tax Rules provide for the manner of payment. The gross value has to be determined in terms of Section 67 of the Finance Act, 1994. The appellant received the taxable services in 2006-07 to 2007-08 and made book entries in their account then. But .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g the stand taken by the department, the learned Counsel for the appellant laid thrust on the judgment of CESTAT in Sify Technologies Ltd. Vs. CCE reported in 2011-TIOL-123-CESTAT-Mad. While deciding similar issue, the Tribunal held as follows: The statutory provision for demanding service tax in respect of transactions between associated enterprises, immediately upon amendment, has been introduced only w.e.f. 10.5.08. Prior to 10.5.08, neither the Finance Act, 1994 not the Service Tax Rules, 19 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nts is to introduce a new provision and not to remove any doubts in the existing provision. It is not, nor can it be, anybody s case, that Explanation shall always take effect retrospectively. In the case of Commissioner of Customs Vs. Skycell Communications Ltd. (2008-TIOL-1898-CESTAT-MAD-LB), [2008 (232) ELT 434], the Larger Bench of the Tribunal has held that Explanation placing restrictions prejudicial to the assessee will not be retrospective In the instant case also, Notification No. 19/08 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version