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A] CLASSIFICATION OF SERVICE
ADVERTISING AGENCY
1. The Hon’ble High Court
held that the statutory definition of advertisement was inclusive and wide
enough to cover anything independently referred therein. Making and sale of
advertising materials for customers in the form of banner or hoarding or
film-slide was advertisement. Any commercial concern engaged in providing any
service connected with advertisement was an advertising agency. Carrying out
all activities referred in definition was not necessary for coverage as
advertising agency.
CCE&C vs. Zodiac Advertisers
2009 (13) STR 593 (Ker.)
BEAUTY TREATMENT OR PARLOUR
SERVICE
2. The assessee was curing
physical disorders/deformities and removing facial and body hairs by laser
treatment. The Tribunal after considering CBEC letter no. B11/1/2002-TRU,
dated 1-8-2002 held that, laser treatment was near to cosmetic surgery
treatment and therefore, not liable to service tax under Beauty Treatment
service.
CCEC, Vadodara-I vs. New Look
Cosmetic Laser Centre 2009 (14) STR 27 (Tri-Ahmd.)
BUSINESS AUXILIARY SERVICE
3. The department sought to
tax commission paid to overseas agents for marketing of goods under Business
Auxiliary Services. The Tribunal observed that, the impugned services were
rendered in connection with sale/marketing of goods manufactured in India. The
contract for commission also revealed that, substantial activities had been
performed out of India. Mere fact that agent was required to contact principal
on certain issues did not make service as rendered in India. Therefore, it was
held that offshore services were not liable to service tax prior to 18-4-2006.
Anant Spinning Mills vs. CCE,
Bhopal 2009 (14) STR 184 (Tri-Del.)
4. The appellant was engaged
in sale of SIM cards. The principal had paid sales tax on SIM cards and
recharge coupons. The Tribunal held that, no service tax liability survives
once sales tax was paid on value charged from ultimate consumer. The appellant
being intermediary for transactions relating to same goods was not liable
under Business Auxiliary Services.
JR Communications & Power
Controls vs. CCE, Trichy 2009 (14) STR 379 (Tri-Chennai)
COMMERCIAL TRAINING &
COACHING CENTRE SERVICE
5. The Tribunal held that
just because institution collected fees from students, one could not come to
the conclusion that it imparted commercial training or coaching. Also,
statutory definition of commercial training or coaching is narrow and not
broad enough to cover Institutions imparting higher learning like MBA.
Institutions preparing students for entrance exams to universities were
covered and not Institutions offering degrees recognized by law.
Magnus Society vs. CCCE,
Hyderabad 2009 (13) STR 509 (Tri-Bang.)
6. The appellant was a
non-profit making organisation registered as charitable society. The Tribunal
held that, training imparted incidentally in advanced computing for a
consideration did not make the appellant a coaching or training institute. In
institutions like appellant, the intellectual level of imparting training was
of very high order, even the minimum qualification is either BE or B. Tech,
where the level of intellectual activity was very high. Training or coaching
involved some element of repetition or drill. By no stretch of imagination the
training conducted by the appellant could be called as “commercial training or
coaching”.
Centre for Dev. of Advanced
Computing vs. CCE, Hyderabad. 2009 (14) STR 165 (Tri-Bang.)
7. The Tribunal held that:
a. Memorandum of Association
showed that, the appellant was not a commercial concern. Members were required
to contribute towards liability, but neither share of surplus nor any dividend
was given to members. Objective of the association was professional
development and not to impart skills for particular job or examination.
Programmes conducted by the appellant were not covered under “Commercial
training or coaching service”.
b. Members were not entitled
to any specific service in return. Even institutions can also become members
of the appellant. Since the revenue did not bring in the services or
advantages received by the members on paying fees or other amount, the same
was not liable to service tax under “Club or Association service”.
c. Since the appellant was
non-commercial organisation demand of service tax under Convention service for
the period prior to 1-5-2006 was not sustainable.
Ahmedabad Management
Association vs. CST, Ahmedabad. 2009 (14) STR 171 (Tri-Ahmd.)
8. The Tribunal held that
institutions registered under Societies Registration Act and exempted from
income tax were not to be considered as commercial training or coaching
centre. Profit motive was relevant to determine the service tax liability. Use
of word ‘commercial’ qualifies commercial training or coaching centre.
Appellant conducting programmes in professional manner for persons already in
service was not at par with centres preparing students for entrance
examinations.
Administrative Staff College
of India vs. CC&CE, Hyderabad 2009 (14) STR 341 (Tri- Bang.)
CONSULTING ENGINEERING
SERVICES
9. According to Revenue,
entire project was distributed to members of consortium and assessee’s
activity was clearly covered under Consulting Engineers service. The Tribunal
relying on Commissioner vs. Indian Oil Tanking Ltd. 2008 (10) STR 11 (Tri-LB)
and Commissioner vs. Daelim Industrial Co. 2007 (5)STR 199 (SC) held that,
turnkey project could not be vivisected and part of it could not be subjected
to service tax.
CCE, Vadodara vs.
Ishikawajima Harima Heavy Ind. Co. Ltd. 2009 (13) STR 650 (Tri-Ahmd.)
10. The appellant had
developed technical know how for providing e-governance and rural governance
in India and as they could not implement the project themselves, sold the said
technical know-how to another company. The Tribunal held that agreement had
provided for transfer of technology and not for providing any technical
know-how Service and ownership was transferred to buyer for consideration,
therefore, demand under Consulting Engineers service was not sustainable.
Aksh Optifibers Ltd. vs. CCE,
Jaipur 2009 (14) STR 15 (Tri-Del.)
CUSTOM HOUSE AGENT SERVICE
11. The Tribunal held that
Custom House Agent was concerned only with import and export of goods and
documentation for customs clearance of such goods. Activities in question
other than Custom House Agent services could not be taxed under Custom House
Agent service. It was further held that, mere transportation of goods was not
covered under Cargo handling service. It was also held that, brokerage
received for booking export of cargo was not liable under Business Auxiliary
Service in view of the fact that appellant was secondary service provider to
shipping lines and also in view of Notification No. 13/2003-ST available to
commission agent.
Lee & Muir Head Pvt. Ltd. vs.
CST, Bangalore 2009 (14) STR 348 (Tri- Bang.)
ERECTION, COMMISSIONING
AND INSTALLATION SERVICES
12. The appellant, a
manufacturer, had paid central excise duty on manufacture of medical
equipments. They had treated erection, commissioning and installation of
equipments as part of sale of excisable goods. The Tribunal observed that,
there was no evidence to show charging of separate amounts for erection and
commissioning and held that, no service tax was payable on service activity as
the same was incidental to delivery of pods to customers and charges thereof
has been included in value for payment of excise duty.
Allengers Medical Systems Ltd. vs. CCE, Chandigarh 2009 (14) STR 235
(Tri-Del.)
FRANCHISE SERVICE
13. The Tribunal observed
that agreement for providing service indicated the role of appellant much
beyond the scope of management consultants. The appellant specifies site on
which restaurant was to be build by the client. The appellant undertook
management and supervision by placing managerial personnel in client’s
premises to ensure fulfillment of conditions of agreement. Any violation of
agreement was entailing unilateral revocation by appellant. It was held that,
actual management was not covered under management consultant’s service and
payment of service tax for subsequent period under Franchise service was
appropriate.
Nirulas Corner House Pvt.
Ltd. vs. CST, New Delhi 2009 (14) 5TR 131 (Tri-Del.)
MAINTENANCE & REPAIRS
SERVICES
14. The appellant was doing
retreading of tyres. The Tribunal upheld the order-in-appeal demanding service
tax under maintenance or repair service from 16-6-2005. It was further held
that, cost of material used during repair of tyres was not excludible from the
value of taxable services and service tax was to be paid on gross amount
charged.
Speedways Tyre Services vs.
CCE, Ludhiana 2009 (14) STR 339 (Tri-Del)
MANAGEMENT CONSULTANCY
SERVICES
15. The appellant deputed
manpower to manage the factory/unit taken over by subsidiary company for
management fees of 2% on turnover of company taken over for managerial
services in general, marketing, technical and commercial management. According
to the Tribunal, the services in question were of executive nature and not of
Management consultant’s service but one of management, hence not liable to
service tax under Management Consultants service.
Sterlite Optical Technologies
Ltd. vs. CCE, Vapi 2009 (13) STR 582 (Tri-Ahmd.)
16. The Tribunal held that
appellant was not carrying out activity of management but they are
manufacturer. Incidental help in acquisition of shares was not covered as per
statutory definition. The appellant had not carried out any activity in
connection with management of organisation and merely playing role in
acquiring shares for particular person was not covered under Management
Consultants service. It was further held that the CBEC circular no.
1/1/2001-ST dated 27-6-2001 clarified that the activity of merger and
acquisition transaction was not to be treated as Management Consultants
service but covered under Banking and Other Financial services.
K. R. Alloys Ltd. vs. CCE,
Calicut 2009 .(13) STR 584 (Tri-Bang.)
17. The Tribunal held that
services provided in relation to technical development and upgradation of
customer’s equipment fall under Management Consultants service and not under
Scientific or Technical Consultants service.
Steelcast Ltd. vs. CCE,
Bhavnagar 2009 (14) STR 129 (Tri-Ahmd.)
18. The Tribunal observed
that term ‘Management’ had been understood in earlier days as Board of
Directors or apex body of organization who regulates, supervises, directs and
control affairs. Management to be looked in the context of rapidly growing
profession of management consultancy and the appellant provided management
consultant’s services, however due to scope for difference in interpretation
and entertaining view that service tax liability was absent extended period of
limitation was not invocable.
Shervani Indus. Syndicate vs.
CCEC & ST, Allahabad 2009 (14) STR 486 (Tri-Del.)
MANDAP KEEPER
19. The Hon’ble Delhi High
Court held that the renting of immovable property per se was not liable to
service tax, but service in relation to renting of immovable property was
taxable. Service tax being a value added tax, value addition was absent in
renting of immovable property for use in the course or furtherance of business
or commerce. If there was no value addition, then there was no tax. The
services provided by Mandap Keeper were entirely different in nature to the
services under Renting of Immovable Property. Service of Mandap Keeper did not
involve transfer of movable or immovable property. Right of ownership was not
transferred but right of possession was transferred in renting of immovable
property. Situations and activities under the said two services were
different.
Home Solution Retail India
Ltd. vs. UOI 2009 (14) STR 433 (Del.)
MINING SERVICES
20. The Hon’ble High Court
held that the marine logistics service in the nature of offshore support
vessels, marine construction barges and harbour tugs provided to exploration
and production companies on time-charter basis without parting with right of
possession and effective control was covered under “Supply of tangible goods
service” and not under “Mining Service”. Introduction of new services and
inclusion of certain services in that entry presupposes that there was no
earlier entry covering such services. New entry for supply of tangible goods
service was created not by amending earlier entry on mining service and also
not by carving out of mining service.
Indian National Shipowners’
Association vs. UOJ 2009 (14) STR 289 (Born.)
21. The appellant carried out
removal of overburden and excavation of ore as and also site formation work,
which was incidental to mining activity. The Tribunal held that, entire
activity was not covered under Site Formation service and contract being
comprehensive, could not be vivisected for levying service tax on portion
relating to Site Formation service. Essential character of work undertaken was
mining or winning of minerals and impugned activity was classifiable under
Mining services w.e.f. 1-6-2007.
M. Ramkrishna Reddy vs. CCE&C,
Tirupathi 2009 (13) STR 661 (Tri-Bang.)
22. The Hon’ble High Court
observed that tax on services was a new concept and the Government had adopted
selective approach as against comprehensive approach and this distinction
needs to be kept in mind as only specified services were taxable under such
approach. The Court further observed that the expressions ‘in relation to’ and
‘in respect of’ were words known as of ‘widest amplitude, but one had to keep
in mind the context in which they were used’. The services rendered by a
person must have a direct or a proximate relation to the subject matter of the
taxing entry. Services having remote connection could not be included in a
taxing entry on the strength of the words ‘in relation to’. Applying this, it
was held that entry (zzzzj), was not inserted by amending entry (zzzy) and the
former was not the specie of what was covered by (zzzy) and no service tax
could be demanded on the activity of supply of vessels under mining service.
Indian National Ship Owners’
Association & Others vs. UOI & Others 2009 TIOL 150 HC Mum-ST.
PHOTOGRAPHY SERVICE
23. The Tribunal held that
photography service being works contract involving sale and service and hence,
sale portion i.e. value of photographic paper and chemicals could not be
subjected to service tax. It was further held that, issue in the present case
being one of interpretation, extended period was not invocable and also
penalty was not impossible.
CCE, Raipur vs. Ajanta Colour
Labs 2009 (14) STR 468 (Tri-Del,)
SCIENTIFIC OR TECHNICAL
CONSULTANCY SERVICE
24. The Tribunal held that
research undertaken in the field of social sciences like health policy,
biomass project, change management and energy management were activities
covered under “Research in social sciences” and not falling under Scientific
or Technical Consultancy service. In order to cover under Scientific or
Technical Consultancy service, the organization must be a science or
technology institution and consultancy must relate to one or more discipline
of science or technology.
Administrative Staff College
of India vs. CC&CE, Hyderabad 2009 (14) STR 341 (Tri- Bang.)
TELECOMMUNICATION SERVICE
25. The appellant was engaged
in providing Wide Area Network (WAN) for Andhra Pradesh Government. The
Tribunal held that, the appellant was involved in generation or usage of data
and flow of information from different centres to head quarters and vice versa
could not be equated to online information and data retrieval. Supply of part
of network service was covered under Telecommunication service.
United Telecom Ltd. vs. CST,
Bangalore 2009 (14) STR 212 (Tri-Bang.)
TOUR OPERATOR’S SERVICE
26. The Tribunal observed
that precedent decisions held that tourist vehicles conforming to relevant
provisions under Central Motor Vehicles Rules alone were covered under Tour
operator’s service. Since, there was no evidence that vehicles were tourist
vehicles, activity carried on by the assessee could not be covered under Tour
operator service.
CCE, Indore vs. Ramsons
Travels & Tours 2009 (14) STR 372 (Tri-Del.)
B] VALUATION
27. The appellant a custom
house agent relying on CBEC circular dated 6-6-1997, claimed deduction from
taxable value towards wharfage charges paid to Port authorities being
statutory port dues. The Tribunal accepted the claim of appellant and allowed
deduction for such charges.
Alvares & Thomas vs. CCE,
Mangalore 2009 (13) STR 516 (Tri-Bang.)
28. The appellant paid
service tax on commission or brokerage received on sale or purchase of
securities. The department sought to demand service tax on handling charges
collected for physical delivery of shares and securities. The Tribunal after
relying on decision in First Securities P. Ltd. 2007 (7) STR 690 (T) held
that, handling charges were not includible in value of taxable service and set
aside the revision order demanding service tax, interest and penalty.
Steel City Securities Ltd.
vs. CCE&CE, Hyderabad 2009 (14) STR 479 (Tri- Bang.)
29. The department had
calculated tax on presumption that appellant might have received the
consideration during the period in dispute. However, the appellant contended
that, vehicle in question was under repair during the period of dispute. The
Tribunal held that, no tax could be levied on the basis of mere presumption.
Santi Ranjan Paul vs. CC&CE (A),Guwahati
2009 (24) STR 523 (Tri-Kolkata)
C] CENVAT CREDIT
30. The Tribunal observed
that person not providing taxable service or not manufacturing goods was
deemed to be output service provider during the material period i.e. prior to
19-4-2006. It was, therefore, held that, service tax on deemed output service
could be paid by utilizing CENVAT credit on input services in view of deeming
fiction during the relevant period. In view thereof, order demanding tax,
interest and penalty was set aside.
CST Bangalore vs. Arvind
Fashions Ltd. 2009 (13) STR 544 (Tri-Bang.)
31. The appellant was having
office in Dubai and liaison office in India. The CENVAT credit was denied on
the ground that the invoice issued by the services provider for services used
for project in India was addressed to Dubai office of the appellant and
payment was also made from Dubai office. The Tribunal held that, output
service had been indeed rendered in lndia and input services have also
emanated in India and used for rendering services in India. There is no
dispute about payment of service tax and therefore the reasoning adopted by
the Commissioner in denying cenvat credit is not valid.
General Electric
International Inc. vs. CCE, Delhi 2009 (13) STR 565 (Tri-Del.)
32. The Tribunal held that
expenses incurred on Medical and personal accident policy, group personal
accident policy, insurance, personal accident policy, personal vehicle
services, landscaping for factory garden and catering are considered for
costing of final products in terms of CAS-4, therefore these services were
received in relation to manufacture of final products and hence CENVAT credit
of service tax paid on these services was admissible.
Millipore India Ltd. vs. CCE,
Bangalore-11 2009 (13) STR 616 (Tri-Bang.)
33. The Tribunal observed
that there was no dispute that subcontractor provided services to main
contractor and were not accountable to service receiver and the appellant had
choice to pay service tax themselves instead of making sub-contractor pay and
take credit of same. The Tribunal held that, contention of Revenue that what
was deposited by subcontractor was not service tax, but only deposit was not
correct and credit was allowed of such tax paid.
Koch-Glitsch lndia Ltd. vs.
CCE&C, Vadodara-1 2009 (13) STR 636 (Tri-Ahmd.)
34. The Tribunal held that
the mobile phones standing in the name of the company and used by employees in
relation to work only and incidental use for personal work by employee could
not be a ground to deny credit thereon in view of CBEC Circular No. 97/8/
2007-ST dated 23-8-2007.
CCE, Bangalore-I vs. Conzerv
Systems (Pvt.) Ltd. 2009 (13) STR 638 (Tri-Bang.)
35. The Tribunal allowed
cenvat credit of service tax paid to Airport Authority for providing services
of parking of aircraft at airport and held that in this modern age, use of
aircraft was to be considered as bare requisite for business purpose.
Force Motors Limited vs. CCE,
Pune 2009 (13) STR 692 (Tri-Mum.)
36. The Hon’ble High Court
held that the cenvat credit of service tax paid on outward freight by a
manufacturer for transportation of goods upto customer’s doorstep was
admissible, if the ownership of goods remain with seller till delivery at
customer’s doorstep. Freight charges forms part of value of excisable goods
and borne by appellant as sale on FOR destination basis. Credit of service tax
paid on outward freight was admissible. Also, the CBEC Circular No.
97/06/2007-ST dated 23-8-2007 clarifying the above issue was binding on the
department and they were precluded from challenging correctness of circular
even on ground of it being inconsistent with statutory provisions.
Ambuja Cements Ltd. vs. UOI
2009 (14) STR 3 (P&Hl)
37. The appellant availed
service tax credit one month prior to payment of service tax on input
services. The Tribunal held that, entire credit was not deniable as
admittedly, in any case, same was available during subsequent period. Further,
interest in accordance with law was required to be paid inasmuch as credit
utilized by them and no penalty was imposable.
Gujarat Pipavav Port Ltd. vs.
CCE, Bhavnagar 2009 (14) STR 53 (Tri- Ahmd.)
38. The Tribunal after
relying on various Tribunal decisions held that, insurance of plant and
machinery, mobile phones and catering service (employees canteen) were
expenditures, which goes into the costing of final product and cenvat credit
of service tax paid on such input services was admissible.
Finolex Cables Ltd. vs. CCE,
Pune-I 2009 (14) STR 303 (Tri-Mum.)
39. The appellant contended
that merger comes into the category of financing, NOC at bank when company
wants to borrow was also a financing activity, custody fees connected with
share registry and that maintenance of fax charges was admissible as credit of
tax paid on telephone was admissible. The Tribunal held that, though the input
services in question might not be considered as directly or indirectly
relatable to manufacture, but yet intention was to provide the benefit of
credit and hence credit was admissible.
Aditya Birla Nuvo Ltd. vs.
CCE, Bhavnagar 2009 (14) STR 304 (Tri-Ahmd)
40. The Tribunal observed
that erection and commissioning cost was included in transaction value of
machine and process undertaken by the sub-contractor at customers place was
incidental to manufacturing activity undertaken in assessee’s premises, as
what was sold was complete machine duly erected, commissioned and operational.
It was held that, rule 2(1) of Cenvat Credit Rules, 2004 did not require that
input services to be rendered at factory of assessee/manufacturer and
erection, commissioning and installation service was not a post manufacturing,
as whole transaction was of manufacture, erection and commissioning and supply
of machine. Sub-contractor had provided services to assessee and not to the
customer.
CCE, Vapi vs. Alidhara
Textool Engineers Pvt. Ltd. 2009 (14) STR 305 (Tri-Ahmd.)
41. The department denied
cenvat credit of service tax paid on GTA service upto port of export as place
of removal contended was factory. The Tribunal observed that, place of removal
was place of export as per contract, which called for supply of goods FOR
Mumbai (City of export). It was held that, credit availed on outward
transportation up to the place of removal was admissible.
CCE, Surat vs. Colour Synth
lndustries P. Ltd. 2009 (14) STR 309 (Tri-Ahmd)
42. The Tribunal held that
canteen services, transportation charges for transportation of employees and
Group Insurance Health policy were input services in or in relation to
manufacturing activity and appellant was eligible to avail the cenvat credit
of service tax paid on such services.
Stanzen Toyotetsu India Pvt.
Ltd. vs. CCE, Bangalore-III 2009 (14) STR 316 (Tri-Bang)
43. The Tribunal held that
Input Service Dealer (ISD) was not a mere dealer. Dealer passes on duty paid
without taking responsibility on eligibility to cenvat credit of buyers. ISD
independently received invoices and it was comparable to buyer of goods and
services. ISD was required to prove eligibility to credit as details on nature
of service was absent at receiving branch or factory and document issued by
ISD for passing credit did not contain nature of services provided.
CST, Ahmedabad vs. Godfrey
Philips India Ltd. 2009 (14) STR 375 (Tri-Ahmd.)
44. The Tribunal held that
assessee a manufacturer availing services of commission agent, was eligible
for taking cenvat credit of service tax paid by commission agents on
commission received as the said services were input services within the ambit
of rule 2(1) of Cenvat Credit Rules, 2004.
CCE, Raipur vs. Bhilai
Auxiliary Industries. 2009 (14) STR 536 (Tri-Del.)
45. The Tribunal held that
cenvat credit of service tax paid on repair of car and motor vehicles,
photography service, rent a cab service and mobile phones used by the staff
was admissible as the said services were input services within the ambit of
rule 2(1) of Cenvat Credit Rules, 2004.
CCE, Jaipur- II vs. J. K.
Cement Works 2009 (14) STR 538 (Tri-Del.)
46. The Tribunal observed
that excisable goods remained the property of the appellant- manufacturer and
the said goods were transported on his own risk up to the premises of buyer,
where the goods were delivered. After relying on CBEC Circular No. 97/8/2007,
dated 23-8-2007, it was held that service tax incurred on freight for
transportation of goods would be available to appellant-manufacturer as input
service credit.
Datafield India Pvt. Ltd. vs.
CCE, Coimbatore 2009 (14) STR 548 (Tri-Chennai)
47. The Commissioner held as
under:
a. Insurance cover, which had
been taken to take care of employees, workers/management staff who renders
services which ultimately leads to emergence of final products was entitled as
input service. Insurance paid on computers, which were used for preparation of
various matters, invoices, transmission of various data etc. will qualify as
input service and credit could not be denied.
b. Transit insurance of inputs/components from the production premises to the
appellant’s factory was input service as inputs/components were used in the
manufacture of final products.
c. Security services used to
guard the materials, which were cleared from factory was not input service.
d. Cenvat credit availed on
input services under bona fide belief and there was no intention to evade
payment of tax hence penalty and interest was not imposable.
In Re: Piaggio Vehicles Pvt.
Ltd. 2009 (14) STR 568 (Commr. Appln.)
48. The Hon’ble High Court
held that TR-6 was a valid document based on which credit was taken. Since the
service tax liability was discharged and later even service tax registration
was obtained by the actual service provider, it was held that credit could not
be denied.
Federal-Mogul-Goetze (India)
Ltd. vs. CCE, Chandigarh, 2009 TIOL 460 CESTAT-DEL.
49. The appellant, a Custom
House agent was alleged to have wrongfully availed input credit for over 4
years and an amount of over Rs. 52 lakhs plus interest and penalty under
Sections 76 and 78 were demanded. It was contended that CENVAT credit returns
were not verified by the Department. It was held that the burden of proof was
on the Department to prove the allegations with solid evidence. Since the
appellant had filed all its Returns regularly, the demand hit by time bar and
the penalties were set aside.
Chandra Shipping & Trading
Services vs. CCE & C, 2009 (13) STR 655 (Tri – Bang).
D] PENALTY
50. The Tribunal observed
that doubt in respect of correct heading to be adopted for payment of tax was
lingering in the mind of appellant and also in the department. Since the tax
was deposited alongwith interest, no penalty was imposable under section 78 in
view of decision by Tribunal in case of Majestic Mobikes Pvt. Ltd. (2008) (11)
STR 609 (T).
Popular Motor Corpn. vs. CST,
Bangalore 2009 (14) STR 49 (Tri-Barng.)
51. The appellant paid fees
for arranging External Commercial Borrowings from non-resident lenders.
Service tax on this fee was paid alongwith interest after enquiry made by the
department. The appellant contended that omission to make payment of services
tax was due to lack of co-ordination between factory and head office and
appellant being a manufacturer was entitled to CENVAT credit of service tax
paid and entire exercise is revenue neutral, hence penalty should not be
imposed. The Tribunal held that, appellant already lost Rs. 34 Lakhs paid as
interest, as CENVAT credit was not available and since, there is no intent to
evade tax, penalty imposed is to be set aside.
Essar Steel Ltd vs. CCE&C,
Surat-I 2009 (13) STR 579 (Tri-Ahmd.)
E] OTHERS
APPEAL
52. There was delay of three
days in filing appeal. The delay of three days occurred due to intervening
days being Saturday and Sunday. The Tribunal held that, Courts were generally
adverse to ex-parte decisions and delay not being a deliberate one was
condonable.
S.V. Polymers vs. CCE,
Jalandhar 2009 (14) STR 409 (Tri-Del)
COMPOSITE SERVICES
53. The Hon’ble High Court
held that :
a. The nature of the
transaction between the appellant and its subscriber under ‘service line
agreement’ though was described as ‘service’, was one of ‘composite
transaction’ involving ‘service’ and ‘sale’ elements. With Artificially
Created Light Energy (ACLE), the data and information of the subscribers could
not be transmitted by using only Optical Fibre Cable (OFC) network. Similarly,
without using OFC network, the data/information could not be transmitted by
using only ACLE.
b. For composite
transactions, again the Supreme Court’s observations in BSNL’s case [(2006) 2
DTR 161 (SC)] were examined and an opinion was formed that in the instant
composite transaction also, the two elements of service and sale could not be
split. In this frame of reference, relying on the decision in State of UP vs.
UOI, 2003 TIOL 14 SC-ST, it was held that the entire proceeds received from
the subscriber as ‘service rentals’ would had to be taxed under the Karnataka
VAT Act treating the transaction of providing broadband connectivity to its
subscribers as sale of ACLE and that the Government of Karnataka had authority
to levy VAT on the entire proceeds collected as ‘lease rentals’, despite it
being assessed to ‘service tax’ by the Central Government under’ the Finance
Act, 1994.
Bharti Airtel Ltd. vs. State
of Karnataka & Others 2009 TIOL 99 HC - KAR-VAT
DEMAND
54. The Tribunal held that
the payment of service tax was linked with receipt of service charges.
Provisions relating to pay later not to be allowed to be taken advantage of by
person, who receives payment in advance. Date of preparation of bill or date
of receipt could not be considered as date of rendering service. Payment
received in advance prior to 1-7-2003 for commercial training and coaching
services yet to be rendered was liable to service tax, though bill was
prepared for services yet to be rendered.
CCE, Allahabad vs. Krishna
Coaching Institute 2009 (14) STR 18 (Tri-Del.)
EXEMPTION
55. The appellant paid
service tax on tyre retreading on 30% of gross amount charged and balance 70%
has been claimed as value of good sold. The Tribunal observed that, ratio of
70:30 was adopted even before introduction of service tax on reconditioning of
tyres and held that, sale of goods involved in the transaction was entitled
for benefit of exemption under Notification No. 12/2003-ST.
PLA Tyre Works vs. CCE (ST),
Trichy 2009 (14) STR 32 (Tri-Chennai)
EXPORT OF SERVICES
56. The appellant received
reinsurance brokerage for arranging reinsurance from Indian company in Indian
rupees. The Tribunal held that, in the facts of the case, export of services
did not arise. Further, definition of “insurer” was wide enough to include
“reinsurer” even without amendment made from 1-5-2006. Insurance Auxiliary
service concerning general insurance business provided to reinsurer by
intermediary was taxable even prior to 1-5-2006.
Suprasesh GIS & Brokers P.
Ltd. vs. CST, Chennai 2009 (13) STR 641 (Tri-Chennai)
IMPORT OF SERVICES
57. The appellant received
Consulting Engineers services from outside India during the period July, 2002
to December, 2004. The Tribunal held that, twin legal requirement of relevant
notification specifying service and person liable for import of service had
not been satisfied and set aside the order by following larger bench decision
in Hindustan Zinc Ltd. 2008 (11) STR 338 (Tri-LB.).
NLC Nalco lndia Ltd. vs. CST,
Kolkata 2009 (13) STR 547 (Tri-Kolkata)
58. The Tribunal relying on
Larger Bench decision in Hindustan Zinc Ltd 2008 (11) STR 338 (LB) held that,
taxable services provided from outside India specified as taxable w.e.f.
1-1-2005 under Notification No. 36/2004-ST and recipient was not liable to
service tax prior to 1-1-2005.
Samcor Glass Ltd. vs. CCE,
Jaipur-I 2009 (14) STR 14 (Tri-Del.)
INTEREST
59. The Hon’ble High Court
held that interest under section 75 of Finance Act, 1994 for delay in payment
of service-tax was mandatory irrespective of reasons for belated payment of
service-tax.
CCE&C, Calicut vs. G.M.
Telecom, BSNL 2009 (14) STR 450 (Ker.)
NOTIFICATION
60. The appellant paid
service tax under Management, Maintenance or Repair service on 30% of gross
amount charged and balance 70% has been claimed as value of goods sold. The
Tribunal observed that, spare parts used in the course of maintenance service
under AMC to be considered as sold and demand beyond 30% of total value of
contract was not sustainable in view of Notification No 12/2003-ST.
Wipro GE Medical Systems P,
Ltd. vs. CST, Bangalore 2009 (14) STR 43 (Tri- Bang.)
REFUND
61. The assessee had taken
suo motu credit of service tax paid on tickets cancelled subsequently. The
Hon’ble High Court observed that, refund claim was not required in such cases
as per CBEC circular dated 26-6-1997. Further, the question of unjust
enrichment did not arise as records shows that, service tax was not charged
from customers. Payment of fare itself did not arise, when tickets were
cancelled by passenger. It was held that, the Tribunal Order holding refund
was sustainable.
CE &ST, Jalandhar vs. Janta
Travels (P) Ltd. 2009 (13) STR 488 (PGH)
62. The appellant had asked
for refund of service tax paid mistakenly on interest collected from customers
towards loan given. The appellant contended that, section 118 was not
applicable as amounts were paid without authority of law. The Tribunal held
that, refund to be within four corners of Section 11B and Statutory authority
could not ignore specific enactments under which refund claim was filed.
Mysore Leasing & Finance Ltd.
vs. CCEC & ST, Mysore 2009 (14) STR 54 (Tri-Bang.)
63. The Tribunal held that
since the assessee had issued credit notes towards refund of service tax, the
refund order passed by original authority was legal and proper. The High Court
held that, no question of law much less the substantial question arise for
consideration and hence dismissed the appeal filed by the department.
CST, Bangalore vs. Shiva
Analyticals (I) Ltd. 2009 (14) STR 301 (Kar.)
64. The Commissioner held
that the refund of service tax paid on transportation from ICD to port in
relation to export goods was admissible. Service tax paid on wharfage charges,
grip charges and other charges was in relation to transport of goods and
eligible for refund u/n 41 /2007-ST. Service tax paid on B/L charges, DOC
charges, releasing charges and THC fall under Port services was also eligible
for refund. The order rejecting refund on the ground that, drawback had been
claimed was not proper as all industry drawback pertaining to excise alone had
been claimed and question of availing drawback on service tax did not arise.
In Re: G.P.L. Polyfills, 2009
(14) STR 557 (Commr. Appl.)
SHOW CAUSE NOTICE
65. The Revenue issued show
cause notice demanding service tax under both Storage and Warehousing service
and Cargo Handling service on charges collected for receiving ammonia at berth
in sea and transporting to storage tank. The Tribunal held that, show cause
notice was not indicating specific category of taxable service under which
department proposed to classify the services rendered. Non-classification of
service was fundamental flaw and therefore allowed the appeal and set aside
the demand.
Coramandel Fertilizers Ltd.
vs. CCE, Chennai 2009 (13) STR 542 (Tri-Chennai)
66. The Tribunal observed
that the plea by assessee that they could not be held as real estate agent was
not disputed by the Department in Memo of Appeal and held that, alternative
plea of change of category to interior decorator/designer at second stage of
appeal was not maintainable. Revenue could not make out a new case beyond
scope of show cause notice.
CST, Ahmedabad vs. Poonam
Grover Associates 2009 (14) STR 67 (Tri- Ahmd.)
67. The show cause notice was
not containing specific allegation for suppression of facts with intent to
evade taxes. The Tribunal held that, since intent to evade payment of service
tax not alleged in show cause notice, there was reasonable ground for waiver
of penalty.
Himatshu Bimet Ltd. vs. CST,
Rajkot 2009 (14) STR 77 (Tri-Ahmd.)
68. The department had issued
letter on waiver of SCN after payment of service tax with interest. The
appellant was directed to comply with relevant provisions for dispensing with
SCN. The appellant paid service tax with interest after receipt of such
direction. The Tribunal held that, invocation of extended period was not
sustainable and Section 73(3) on waiver of SCN was applicable, hence the
department should not have issued SCN.
VST Tillers Tractors vs. CCE,
Mysore 2009 (14) STR 159 (Tri-Bang.)
TAXABLE EVENT
69. The Gujarat High Court
held that liability could not be fastened under reverse charge mechanism on
recipient of service merely because invoices raised and payments made were
after 16-8-2002. Taxable services had been rendered between November, 2001 to
March, 2002 and raising of invoice and/or making payment could not be
considered as taxable event. Rendering of service is taxable event. Also, rule
2(l)(d)(iv) was not applicable retrospectively to services rendered prior to
16-8-2002.
CCE&C, Vadodara-II vs. Schott
Glass India Pvt. Ltd. 2009 (14) STR 146 (Tri- Guj.)
TURNKEY PROJECTS
70. The department demanded
services tax on margin earned in purchase of components required for
installing Total Energy System at client’s site. The Tribunal observed that,
installation undertaken as turnkey contract and held that, turnkey contract
cannot be vivisected to subject part of it to service tax. Further, even if
the service is rendered, the same is rendered to self hence, no tax is
payable.
Cethar Vessels Pvt. Ltd. vs.
CCE, Trichy 2009 (14) STR 234 (Tri-Chennai)
OTHERS
71. The Tribunal held that an
organization may be charitable organization established for some purpose, but
may still engage in commercial activities, as without any commercial
activities, the income required for charitable purpose cannot be generated.
For levy of service tax it was the activity of an organization, which was
relevant and not objective. The appellant itself treating security service
project as commercial activity and full price was charged for services
provided. The appellant being a commercial concern was liable to service tax.
Service tax liability was not restricted to commission only, but it was
payable on the entire gross amount charged for services provided.
Punjab Ex-Servicemen Corpn.
vs. CCE, Chandigarh 2009 (13) STR 529 (Tri-Del.)
F] WAIVER OF DEPOSIT
72. After examining the
relevant provision, the Hon’ble Court observed that though discretion is
available, it had to be exercised judiciously. These things were to be
considered by the Tribunal while dealing with application for dispensing with
the pre-deposit - prima facie case, balance of convenience and irreparable
loss. The Court noted, “Merely on establishing a prima facie case, interim
order of protection need not be passed. But on a cursory glance, if it appears
that the demand had no legs to stand, it would be undesirable to require the
assessee to pay full or substantive part and dispose of petition in a routine
manner. Merely because the Court had indicated the principles that did not
gave a licence to the forum/authority to pass an order which could not be
sustained on touchstone of fairness, legality and public interest. Where
denial of interim relief may lead to public mischief, grave irreparable
private injury or shake a citizen’s faith in the impartiality of public
administration, interim relief could be given. The Tribunal was accordingly
directed to hear the appeal on merits without insisting on any pre-deposit.
However, no opinion was expressed on the merits of the case and the appeal was
disposed of.
Ravi Gupta vs. Commissioner
of Sales Tax, Delhi 2009 TIOL 47 SC-CT.
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