A. Classification of Service
Business Auxiliary / Support Services
1. The Tribunal held that octroi agents engaged in reading invoices and challans, filling up forms and obtaining clearance at check posts do not deal with documents for title since they’re not authorised to do so and therefore not liable for service tax under Business Auxiliary Services.
Trimurti Octroi Company v. CCE – (2015) 40 STR 152 (Tri. – Mum.)
2. The Apex Court held that where a specific service was excluded from the purview of service tax, the authorities could not levy service tax indirectly under the general charging head of business auxiliary services and therefore held that the cash management services rendered by the assessee, being excluded from the ambit of banking and financial services could not be liable to charge under the head of business auxiliary services.
CCE, C & ST v. Federal Bank Ltd. – (2016) 42 STR 418 (SC)
3. The Tribunal held that the activity of running the retail outlet of HPCL, including physical delivery of petroleum products, providing adequate security for retail outlet, maintaining proper and correcting the amount of transactions, handling receipts/storage/delivery of stock for sale of products, arranging for effective operation of air/water and other customer oriented facilities, housekeeping and other jobs etc., are covered under the definition of Business Auxiliary Services and not under Manpower Supply Service.
Harinder Goyal v. CCE – (2016) 42 STR 61 (Tri. – Del.)
4. The Tribunal held that, ginned cotton which comes into existence as a result of ginning process on cotton produced by farmers, was covered within the inclusive definition of ‘agricultural produce’ under Notification No. 13/2003-ST and therefore commission received by the assessee in respect thereof is eligible for exemption.
R. K. & Sons v. CCE – (2016) 42 STR 314 (Tri. – Del.)
5. The Tribunal held that services provided by automobile dealers to financial institutions was decided to be categorised as Business Auxiliary Service only upon issuance of Circular No. 87/06/2006-ST dated 6-11-2006 and therefore demands arising out of this issue prior to the said date could not be confirmed.
CCE v. Ratnaprabha Motors – 2016-TIOL-1299-CESTAT-Mum.
6. The Tribunal held that service tax was not leviable on collection of smart card / vehicle registration fees and other charges since the said charges were neither covered under ‘Customer Relationship’ nor any residual category of ‘other transaction processing’ under the Business Support Services category.
Wonder Cars Pvt. Ltd. v. CCE – (2016) 42 STR 1055 (Tri. – Mum.)
7. The Tribunal held that the services provided by the assessee, who deputed employees to its group companies to assist the group companies sell its goods (as per the directions of the group company), could not be considered as business auxiliary services and therefore not liable to service tax since the assessee did not render any service of promotion or marketing of goods manufactured by the group companies.
Franco Indian Pharmaceutical P. Ltd. v. CST – (2016) 42 STR 1057 (Tri. – Mum.)
8. The Tribunal held that service tax was not payable under business auxiliary service on surplus arising from purchase and sale of space in a principal-to-principal transaction of multi-modal transporters since business auxiliary services did not include principal to principal transactions.
Greenwich Meridian Logistics (I) Pvt Ltd. v. CST – 2016-TIOL-869-CESTAT-Mum
Cargo Handling Service
9. The Apex Court held that for taxability under CHS, goods must be cargo and activity of loading/unloading and packing/unpacking must be carried out by an independent agency and therefore where the assessee only supplied labour for working in packing plant as per specific requirement of customer and supervised work done by them and no part of loading or unloading or packing of cement service provided by them was liable to service tax under CHS.
DC of CE v. Sushil & Company – (2016) 42 STR 625 (SC)
Construction Services
10. The Tribunal held that where the assessee provided services of border fencing across Indo-Bangladesh Border, the same was not liable to service tax under Erection Commissioning and Installation services since Fence even though a structure, cannot be read in isolation but along with commissioning or installation of plant & machinery and as such, border fencing structure standing alone cannot be subjected to service tax under ECI service.
Mackintosh Burn Ltd. v. CCCE&ST – 2016 42 STR 161 (Tri. – Kolkata)
11. The Tribunal held that construction of college building which is carrying out technical education approved by AICTE, Government of Maharashtra amounts to non-commercial construction and therefore not liable to service tax.
CST v. S. M. Sai Construction – (2016) 42 STR 716 (Tri. – Mum.)
Club or Association Service
12. The Tribunal held that receipts from members were not liable to service tax since the transaction between the two did not satisfy the charging section viz., 65(105)(zzze) of the Finance Act, 1994. Further, it held that reimbursement received from staff towards accommodation was not liable to service tax since privileges of employer- employee relation was outside the purview of service tax and the activity did not come within the definition of taxable service of renting of immovable property.
Gondwana Club v. CC & CE – (2016) 42 STR 895 (Tri. – Mum.)
Credit Card Services
13. The Larger Bench of the Tribunal held that merchant discount earned by the acquiring bank from the merchant establishment was not taxable under the category of credit card services prior to May 1, 2006, since prior to the introduction of section 65(33a) with effect from May 1, 2006, which defines credit card services, the said transactions were not covered under the earlier definition provided under section 65(12).
Standard Chartered Bank v. CST – (2015) 40 STR 104 (Tri. – LB)
Dredging Services
14. The Tribunal held the services provided for the purposes of desilting of the Mithi River was liable to service tax under the category of Dredging Services
R.P. Shah v. CCE – (2016) 42 STR 839 (Tri. – Mum.)
Franchise Service
15. The Tribunal held that where the assessee got branded firebricks and other refractory material manufactured from other manufacturers and the department sought to demand service tax on differential price of purchase and sale under franchise service, as per definition of franchise, one conditions precedent was that the franchisee was granted representational right to sell goods identified by franchisor, whereas in this case, the manufacturers did not have any representational right to manufacture/sell goods except compliance of purchase order of appellant and therefore the same was not liable to service tax. It held that merely because the word ‘franchise’ was used in the agreement it does not ipso facto mean that franchise services were rendered.
Ace Calderys Ltd. v. CST, Bhopal (2016) 42 STR 8 (Tri. – Del.)
Management, Maintenance and Repair Service
16. The Tribunal held that management and maintenance of parks and roadside plantation and maintenance on behalf of local bodies was liable to service tax under MMR Service w.e.f. 1-5-2006. Further, it held that since the assessee had not obtained ST registration and not filed returns the extended period of limitation was invocable.
Tarachand Chaudhary v. CCE – (2016) 42 STR 83 (Tri. – Del.)
Manpower Recruitment & Supply Agency Services
17. The Tribunal held that supplying models / actors for advertising of products of TV serials / films were not covered within the definition of Manpower Recruitment Services & Supply Agency Services during the period from 2001-02 to 2002-03.
Israni Networking v. CCE – (2016) 42 STR 917 (Tri. – Mum.)
Port Service
18. The Tribunal held that where the agreement entered into between the assessee and the licensee for the development of a berth as a container terminal, its operation and maintenance on BOT basis, was in the nature of a licence agreement, it cast certain principal and operational obligations on the appellant and therefore the royalty fee received therefrom would be liable to service tax under the Port Service category.
Tuticorin Port Trust v. CCE – (2016) 42 STR 512 (Tri. – Chennai)
Real Estate Agent Service
19. The Tribunal held that administrative/transfer charges recovered for rendering services in relation to real estate viz., changing names of owner (last allottee) in records prior to execution of sale deed in favour of buyer clearly falls within Real Estate Agent Service. Further, since there was an order of the Commissioner (Adjudication) Service Tax, New Delhi in another case holding that such transaction not dutiable, the appellant’s claim regarding bona fide belief was supported and therefore extended period of limitation could not be invoked.
Ajay Enterprises Pvt. Ltd. v. CST – (2016) 42 STR 471 (Tri. – Del.)
Rent –a-cab services
20. The Tribunal held that the services provided by the assessee viz., providing of buses for transportation of passengers on a stage carrier basis, was liable to service tax and it dismissed the contention of the assessee that the said services could not be treated as hire in light of the Motor Vehicles Act, 1988 which provided that the hire of buses with stage carriage was not permitted, since the chargeability of services under the Finance Act 1994 was independent of the Motor Vehicles Act, 1988.
S.K. Kareemun v. CCEC & ST – (2016) 42 STR 988 (Tri. – Bang.)
Renting of Immovable Property
21. The Court held that rent collected for lease of various plots allotted by the assessee to lessees for construction of factories was liable to service tax under the category of Renting of Immovable Property Services and that the term of lease (whether for short duration or for 90 years or perpetuity) did not make a difference. Further, it held that letting of vacant land for construction of buildings used in the furtherance of business or commerce at a later stage was only taxable with effect from July 1, 2010.
Greater Noida Industrial Development Authority v. CCE – (2015) 40 STR 95 (All.)
22. The Court held that renting of vacant land for construction of a building for use at a later stage for business or commerce is liable for service tax only with effect from July 1, 2010 and not prior to that date.
CST v. Greater Noida Development Authority – (2015) 40 STR 46 (All.)
Restaurant services and short-term accommodation services
23. The Court upheld the constitutionality of imposition of service tax on supply of food during rendering restaurant services and short term accommodation servives since the service tax was imposed only on the service aspect of the transaction.
Ballal Auto Agency v. UOI – (2015) 40 STR 51 (Kar.)
Supply of Tangible Goods Service
24. The Tribunal held that where the assessee hired helicopters for customers to ferry persons and cargo for offshore operations along with the flight crew and maintenance crew with fully operational helicopters, the purport and object of agreement being for charter hiring, the activity clearly fell under SOTG service.
Technical testing and analysis
25. The Tribunal held that services of clinical testing of drugs and medicine was not liable to service tax prior to May 1, 2006.
Wellquest v. CST – (2015) 40 STR 185 (Tri. – Mum.)
Telecom Service
26. The Court held that activation of SIM cards was a service and not a sale and in the absence of any statutory provision under the State VAT Law authorising collection of sales tax / VAT on SIM Cards, the collection of VAT was without authority of law and nonest. Accordingly, the Court directed the VAT department to transfer the amount due as refund of unauthorised VAT collected, to the Service Tax Department for adjusting the same towards the demand made by them.
Idea Cellular Ltd. v. UOI – (2016) 42 STR 823 (P&H)
Works contract Services
27. The Apex Court held that the five types of works contracts covered by Section 65(105)(zzzza) would be liable to service tax only with effect from June 1, 2007 under the category of works contract services and not prior to that date under any other category of service.
CCE & C v. Larsen & Toubro Ltd. – (2015) 39 STR 913 (SC)
28. The Tribunal held that the supply and installation of Metal Crash Barriers alongside highways was a composite contract involving supply of materials and provision of service falling under category of Works Contract Service and not liable to Service Tax prior to 1-6-2007 as held by Apex Court in case of Larsen & Toubro Ltd. 2015 (39) STR 913 (SC).
Pioneer Fabrication Pvt. Ltd. v. CCE – (2016) 42 STR 563 (Tri. – All.)
29. The Court held that where the assessee provided works contract services to IIT it was not liable to service tax in respect of such services, since IIT, set up by the Act of Parliament was a Governmental authority and therefore the construction activity was exempt from service tax under clause 12(c) of the Mega Exemption Notification.
Shapoorji Palonji and Co. Pvt. Ltd. v. CCE, C & ST – 2016-TIOL-556-PATNA-ST
B. Valuation
30. The Tribunal held that the free supply of items provided by service recipient of site formation service could not be added to assessable value of service to levy service tax. It further held that the bonus given to the assessee by service recipient for efficient use of diesel and explosives could not be added to value of service as the same was not known at time of performance of service and was calculated subsequent to completion of service and it was more in nature of prize money for good performance and in no way linked to value of services.
AMR India Ltd. v. CCE & ST – (2016) 42 STR 329 (Tri. – Bang.)
31. The Tribunal held that for the purpose of determining the ‘gross amount charged’ on which service tax was to be levied, the payment actually received by the assessee and not the notional average of gross consideration for 10 years inclusive of lease advance not actually received, was to be considered. It further held that as per Accounting Standard – 19 followed by assessee, said notional amount is not income for purpose of computing tax under Income Tax Act and therefore cannot be held liable to service tax. Since said notional amount was not payment actually received, it was neither consideration nor gross amount charged in terms of section 67(1) of FA, 1994.
Reliance Infratel Ltd. v. CCE – (2016) 42 STR 452 (Tri. – Mum.)
32. The Tribunal held that the amount received as consideration should be considered as cum tax amount unless the amount of tax is recovered separately.
CST v. Bluechip Corporate Investment Centre Ltd. – 2016 (42) STR 50 (Tri. – Mum.)
33. The Tribunal held that when TDS liability of foreign service provider was borne by service recipient and the service provider was paid entire consideration as per the contract, such TDS component would not constitute consideration for service.
Magarpatta Township Development & Construction Co. Ltd. v. CCE – [2016] 68 taxmann.com 280 (Mumbai-CESTAT)
34. The Authority held that the incentive/volume discount received by the assessee who provided services of an advertising agency providing professional services to the advertisers in relation to placement of advertisements in various media via two business models was not liable to services tax since there was no legal or contractual obligation to pay such volume discounts which were purely gratuitous and discretionary on the part of the media owners. It held that there had to be a nexus between activity and consideration and therefore incidental receipts of such incentives / volume discounts was not liable to service tax.
M/s. Akqa Media India (P) Ltd. – 2016-TIOL-14-AAR-ST.
35. The Tribunal held that free supplies provided to the sub-contractor by the construction service provider was not includible in the gross amount of taxable services for the purpose of computing service tax.
Harsh Construction v. CCE&ST – (2016) 42 STR 844 (Tri. – Ahmd.)
36. The Tribunal held that the benefit of deduction of cost of raw materials consumed in providing retreading of old and used tyres was not available to the assessee. It further held that the concept of deemed sales of goods was only applicable in the case of works contracts and not in the case of maintenance and repair services and therefore the value of rubber was includible in the gross amount of services and the benefit of Notification No 12 / 2003- ST was not available in the instant case.
CCE v. Tyresoles India Pvt. Ltd. – (2016) 42 STR 861 (Tri. – Mum.)
37. The Court held that in absence of machinery provisions to exclude non-service elements from a composite contract of construction of residential complex service, no service tax can be levied.
Suresh Kumar Bansal v. Union of India & Or. –2016-TIOL-1077-HC-EL-ST
C. CENVAT Credit
38. The Tribunal held that credit of service tax paid on courier services availed for speedier delivery of final products to the customers was admissible as it was an activity relating to the business of the assessee and denial of CENVAT credit on the ground that it was in the nature of services in relation to the outward transportation beyond the place of removal was incorrect.
CCE v. Sakata Inx India – (2015) 39 STR 865 (Tri. – Del.)
39. The Tribunal held that credit of service tax on clearing and forwarding agent services was admissible and that credit of service tax paid on commission agent’s services was inadmissible.
CCE v. Nutrine Confectionery Co. Ltd. – (2015) 39 STR 866 (Tri. – Bang.)
40. The Tribunal held that credit of service tax paid on lending of office, maintenance charges, brokerage or commission paid for obtaining office premises, insurance of plant and machinery, security charges, housekeeping charges and accident insurance of employees being availed in the course of business of manufacturing was admissible.
CCE v. Taurus Agile Technology Corporation P. Ltd. – (2015) 39 STR 880 (Tri. – Del.)
41. The Tribunal held that denial of CENVAT credit on the ground that the invoices contain the previous address of the assessee was incorrect. Further, it held that CENVAT credit on mobile phone bills used by officials of the assessee was admissible and that service tax paid on dismantling of plant and machinery for shifting it to new premises being an integral part of business activity was also admissible as CENVAT Credit.
Paradise Plastics Enterprises Ltd. v. CCE – (2015) 39 STR 889 (Tri. – Del.)
42. The Tribunal held that services rendered by consignment agents in relation to promotion of sale would fall within the expression of ‘sales promotion’ as mentioned in the definition of input services and hence credit on the same was admissible.
Vishal Pipes Ltd. v. CCE – (2015) 39 STR 864 (Tri. – Del.)
43. The Court allowed the assessee CENVAT Credit of service tax paid on lease rent of land and construction services for putting up its factory since the factory was used for manufacture of final products. It held that the construction services used for setting up the factory would fall in the ‘means’ part of the definition of input service being a service used directly or indirectly for the manufacture of final product.
CCE v. Bellsonica Auto Components India Pvt. Ltd. – (2015) 40 STR 41 (P&H)
44. The Tribunal held that where the assessee availed credit on various services received by 3 offices, which were utilised for payment of duty liability in respect of its single manufacturing unit, the credit could not be denied on the ground of non-registration as an Input service distributor since the ISD registration was only required where there was more than one manufacturing unit.
CCE v. Taurus Agile Technology Corporation P. Ltd. – (2015) 39 STR 88 (Tri. – Del.)
45. The Tribunal held that there is no bar for claiming refund of unutilised credit pertaining to the previous quarters under Notification No.5 / 2006.
Innor Solutions Pvt. Ltd. v. CST – (2015) 39 STR 698 (Tri. – Del.)
46. The Tribunal held that CENVAT credit on telephone bills in the name of the Director but bearing the address of the office premises could not be disallowed. Further, it held that CENVAT credit in respect of unregistered branch premises subsequently registered and a part of the assessee’s centralised registration was not disallowable.
Ketan Motors Ltd. v. CCE – (2015) 39 STR 858 (Tri. – Mum.)
47. The Court held that where the assessee, engaged in providing commercial coaching and training, organized celebrations for encouraging successful students who completed their courses, the service tax paid on catering, photography and tent services used for organising the said celebrations could not be considered as used for providing output services and therefore CENVAT Credit on the same could not be allowed.
The Court further held that CENVAT Credit on repair of motor vehicles and travelling expenses on business tours, having no nexus to the provision of commercial training and coaching services could not be allowed.
Bansal Classes v. CCE & ST – (2015) 39 STR 967 (Raj.)
48. The Court held that CENVAT credit of duty paid on cement and steel bought by the assessee, a port service provider, and supplied to a contractor for construction of new jetties would be admissible even though the services provided by the contractor was an exempted service.
Mundra Ports & Special Economic Zone Ltd. v. CCE & CUS – (2015) 39 STR 726 (Guj.)
49. The Tribunal held that canteen services (outdoor catering services), garden maintenance services, event management services availed by the assessee, a port services provider, for an opening ceremony and other ceremonial occasions was allowable as input services as it was used for the purposes of business.
Gateway Terminals I Pvt. Ltd. v. CCE – (2015) 39 STR 1027 (Tri. – Mum.)
50. The Tribunal held that CENVAT Credit of service tax paid on life insurance of staff and rent a cab services availed for providing conveyance to staff was allowable especially considering that these costs were included for the purpose of billing to the clients.
Mount Kellet Management (I) Pvt. Ltd. v. CST – (2015) 40 STR 165 (Tri. – Mum.)
51. The Court held that there was no infirmity in the finding of the Tribunal that service tax credit could be utilised for payment of excise duty on goods manufactured by the assessee and that such cross-utilisation was neither barred nor prohibited.
CCE v. S. S. Engineers 2016 (42) STR 3 (Bom.)
52. The Court held that repair, maintenance of company vehicles, rent-a-cab services were in relation to business activities of assessee as they were directly/indirectly involved in the manufacture of final product and therefore eligible for CENVAT credit.
CCE & ST v. Mangalore Refinery & Petrochemicals Ltd – (2016) 42 STR 6 (Kar.)
53. The Tribunal allowed CENVAT credit of service tax paid on service of private placement of shares for raising capital for implementing new project to manufacturer of automotive wheels as the definition of input service was not restricted to services directly linked to manufacturing activity only.
Steel Strips Wheels Ltd. v. CCE – (2016) 42 STR 72 (Tri. – Del.)
54. The Tribunal held that an ISD can distribute CENVAT credit even without taking registration and non-registration was not a ground for denial of credit. It held that the TR-6 challan is proper document for passing CENVAT credit.
Bhansali Engg. Polymers Ltd. v. CCE – (2016) 42 STR 86 (Tri. – Del.)
55. The Tribunal allowed CENVAT credit of services utilised for running canteen, maintenance of garden and cleanliness in residential colony on the facts of the case.
Mukund Ltd. v. CCE – (2016) 42 STR 88 (Tri. –Mum.)
56. The Tribunal held that service provided to Jammu & Kashmir was an exempt service under the Cenvat Credit Rules, 2004 and therefore provisions of Rule 6 for proportionate reversal were applicable. It is also held that, services provided to SEZ and United Nations were not to be treated as exempted service for invoking provisions of Rule 6 of CCR, 2004.
Adecco Flexione Workforce Solutions Ltd. v. CCEC & ST – (2016) 42 STR 202 (Tri. – Bang.)
57. The Court held that, since assessee did not exercise the option of availing abatement under Rule 2A of Valuation Rules in respect of Works Contract Service and discharged tax liability in full, the Revenue was not put to loss by availment of credit on inputs and therefore the appeal by revenue was not sustainable.
CCEC & ST v. S. V. Jiwani – (2016) 42 STR 209 (Bom.)
58. The Tribunal held that towers and shelters and pre-fabricated material used for such towers and shelters were neither capital goods nor inputs. The towers were immovable structure and ipso facto non-marketable and non-excisable. Further, since there was no nexus between above duty paid inputs and telecommunication service it further held that, by classifying product and paying duty under particular tariff heading, automatic claim for that item could not be made and eligibility of any item for credit was to be decided as per CCR, 2004.
Tower Vision India Pvt. Ltd. v. CCE – (2016) 42 STR 249 (Tri. – LB)
59. The Tribunal held that where the assessee claimed CENVAT credit of service tax paid on input services procured before registration and contended that they had taken credit only when construction of mall was completed and ready to be rented out (post registration), substantial benefit could not be denied and the delay in registration could be ignored when there was no violation of legal provisions.
Vamona Developers Pvt. Ltd. v. CCCE&ST (2016) 42 STR 277 (Tri. – Mum.)
60. The Tribunal held that the requirement of filing declaration under Rule 6(3A) was directory and not mandatory and where most of the requirement of such declaration were already available in the Revenue’s record, Rule 6 could not be used as tool of oppression to extract amount which is much beyond remedial measures. It held that CCR, 2004 is a delegated legislation and subservient to main Act and cannot override section 93 of FA, 1994.
Tata Technologies Ltd. v. CCE – (2016) 42 STR 290 (Tri. – Mum.)
61. The Tribunal allowed the assessee CENVAT credit of service tax paid on Construction Service, Repair & Maintenance Service, Security Service, Manpower Recruitment Service, Works Contract etc., used in residential colony of the employees attached to the factory since the factory was located in a remote area and the residential colony was required for the smooth running of business.
Reliance Industries Ltd. v. CCE & ST – (2016) 42 STR 457 (Tri. – Mum.)
62. The Tribunal held that CENVAT credit of service tax paid on membership of CII & TN Electricity Consumer Association, Group Mediclaim Policy and Housekeeping charges was allowable since such services were essential to carry on business of manufacture of final product.
Hinduja Foundries v. CCE – 42 STR 494 (Tri. – Chen.)
63. The Tribunal held that any service received, which is commercially required for the purpose of carrying on business of service provider is covered by the expression “activity relating to business” contained in Rule 2(l) of CCR, 2004 and eligible for CENVAT Credit.
CST v. Jubilant Biosys Ltd. – (2016) 42 STR 729 (Tri. – Bang.)
64. The Tribunal held that since the capital goods were received during construction activity and installed in hotel premises and undoubtedly used for providing output service for which assessee got registration subsequently, the credit was admissible.
CCE v. Kamat Construction & Resorts Pvt. Ltd. – (2016) 42 STR 450 (Tri. – Mum.)
65. The Tribunal held that where the assessee availed CENVAT Credit on renovation services which was classified under the category of Works Contract, since Works Contract Services was excluded in definition of Input Service, it was not open for the assessee to avail input service credit by changing its category.
JDSU India Pvt. Ltd. v. CST – (2016) 42 STR 752 (Tri. – Mum.)
66. The Tribunal held that the membership of business clubs like the Enterpreneur Organisation was indirectly related to the promotion of business and therefore was an input service for which the assessee could legally take CENVAT credit of related expenses.
Pam Pharma & Allied Machinery Co. P. Ltd. v. CCE – (2016) 42 STR 757 (Tri.-Mum.)
67. The Court held that where the assessee utilised MODVAT credit of duty paid on import of machinery in 1999 and also claimed depreciation in respect of same duty component in their income tax returns for that year and in the subsequent years but gave up the claim of depreciation under the Income-tax Act, by revising its returns or rectifying its records under section 154 (since due date for filing revised return had elapsed), the benefit of MODVAT credit could not be denied to the assessee.
Lumax Ltd. v. CCE – [2016] 68 taxmann.com 156 (Madras HC)
68. The Tribunal held that failure to intimate the department under Rule 6(3A) of the CENVAT Credit Rules was a mere procedural lapse and denial of benefit of proportionate reversal of credit was not justified.
Aster P. Ltd. v. CC & CE – 2016-TIOL-1035-CESTAT-Hyd.
69. The Tribunal held that when the excess payment made by the assessee was not in dispute, denial of adjustment against subsequent liability on a mere procedural lapse (i.e. the excess being adjusted suo motu without intimating and being in excess of the prescribed limit) and strict interpretation was not justified.
CC & CE & ST v. State Bank of Hyderabad – 2016-TIOL-1105-CESTAT-Hyd.
70. The Tribunal held that a manufacturer was eligible to take CENVAT credit of service tax, inadvertently paid by job worker whose activities were exempt from service tax.
CCE v. Fiamm Minda Automotive Ltd. – (2016) 68 taxmann.com 147 (Del. – CESTAT)
71. The Court held that where CENVAT credit was available for adjustment against demand which was adequate to safeguard the interest of Revenue, insistence upon further deposit would cause undue hardship and further prima facie case was also established for waiver of pre-deposit. Thus, the Court reduced the amount of further deposit having regard to the availability of CENVAT credit and directed the Tribunal to restore the appeal.
United Cargo Transport Services v. CST – 2016-TIOL-323-HC-MAD-ST
72. The Tribunal held that where the assessee was first registered as a service recipient and subsequently amended its registration to that of a service provider, it could not be denied CENVAT credit on capital goods utilised by it merely on that ground. It held that CENVAT credit could only be denied where no registration was done. Further, it held that the assessee was entitled to claim 100 per cent CENVAT credit on capital goods in the subsequent year where it did not claim any CENVAT credit on capital goods in the first year of use.
CE v. Kamat Constructions & Resorts (P) Ltd. – 2016 (42 STR 450 (Tri. – Mum.)
73. The Tribunal held that relevant date for calculation of time limit of 1 year for CENVAT credit refund shall be the date of export invoice.
Paul Mason Consulting India (P) Ltd. v. CCE & ST- (2016) 42 STR 686 (Tri. – Ahmd.)
74. The Tribunal held that there are options available under Rule 6(3) of the CENVAT credit Rules, 2004 to reverse CENVAT credit which could be exercised by the assessee on its own and it wasn’t for the department to determine the option to be exercised.
M/s Dwarkadas Mantri Nagri Sahakari Bank Ltd. v. CCEC – 2016-TIOL-702-CESTAT-Mum.
75. The Court held that in view of settled law the credit of service tax paid on outward freight up to customer’s premises was admissible.
CCE v. Rine Machine Tools 2016 (42) STR 809 (P&H)
76. The Tribunal, after going through the agreement between the assessee and its overseas agents pertaining to the receipt of market information on a quarterly basis for various market segments, held that services provided pursuant to the agreement were to be construed as sales promotion and that credit thereon was admissible. Further it held that, the explanation inserted in Rule 2(l) providing that sales promotion includes services by way of sale of dutiable goods on commission basis was declaratory in nature and hence effective retrospectively.
Essar Steel India Ltd. v. CCE&ST – (2016) 42 STR 869 (Tri. – Ahd.)
77. The Tribunal allowed CENVAT credit on service tax paid on services of advice, procedural issues as to raising finance by pledging of shares, advisory services provided in relation to disinvestment of stakes and acquisition of shares in a company etc. as the expansion of business activity was directly connected with the activity of service provided by the assessee and therefore had correlation to the business undertaken by the assessee.
Hinduja Global Solutions Ltd. v. CCEST&C, Bengaluru 2016 (42) STR 932 (Tri. – Bang.)
78. The Tribunal held that neither Rule 5 of CCR, 2004 which provided for grant of refund, nor Notification No 12/2005- ST, which provided for rebate of service tax paid in respect of export of services, stipulated that the assessee had to export services on or after 19-4-2005 to avail benefit of rebate of CENVAT credit. Hence, it cannot be said that only export made after 19-4-2005 were eligible for refund in Rule 5. Further it is held that, substantial benefit cannot be denied in absence of specific embargo in rules.
J. P. Morgan Services India Pvt. Ltd. v. CCE(ST) Mumbai 2016 (42) STR 982 (Tri.-Mum.)
79. The Court held that prior to the insertion of clause (d) in Rule 7 of CCR, 2004, there was no requirement of distributing input service credit on pro rata basis.
CCE v. National Engineering Industries Ltd. 2016 (42) STR 945 (Raj.)
80. The Tribunal held that where the payment of goods by the buyer was on a receipt and acceptance basis, since the responsibility of transportation and transit insurance was on the assessee, the assessee was entitled to claim credit of GTA and insurance services availed.
Ashoka Industries v. CCE, Jaipur-I 2016 (42) STR 1009 (Tri. – Del.)
81. The Tribunal allowed the assessee CENVAT credit on various services as they fell under the inclusive part of definition of input services used for providing operating port and its services. Further, it held that cement and steel used for construction of jetty could not be considered to be used for providing taxable output services and were neither capital goods nor inputs and therefore CENVAT credit thereon was not admissible.
Adani Port & Special Economic Zone Ltd. v. CST – 2016 (42) STR 1010 (Tri. – Ahmd.)
D. Others
Appeal
82. The Court held that the requirement for mandatory pre-deposit of 7.5 per cent of tax demand for filing an appeal before the Tribunal was not to be imposed where the assessee received a Show Cause notice prior to 6-8-2014 i.e. date of introduction of this mandatory pre-deposit, even though the appeal was filed after the said date since the law of appeal as applicable at the time of initiation of proceedings was to be considered.
Fifth Avenue Sourcing P. Ltd. v. CST (2015) 40 STR 71 (Mad.)
83. The Court held that where an appeal was dismissed merely for a part default in payment of pre-deposit and not on merits on which the assessee had an arguable case, the matter could be restored by the Tribunal if sufficient compliance was made later.
Classic Builders (Madras) P. Ltd. v. CESTAT – (2016) 67 taxmann.com 173 (Madras)
84. The Court held that a High Court is bound by an earlier decision of its co-ordinate Bench even if such decision was not challenged by Revenue due to its policy decision as the reason for not challenging the order has no relevance.
CCE & ST v. Mangalore Refinery & Petrochemicals Ltd. – 2016 (42) STR 6 (Kar.)
85. The Court held that in spite of alternate remedies provided in the Act, writ petition can be entertained if imposition of duty is per se unsustainable and illegal which was so in the given case though the service in question was exempt, the revenue had raised demand by disregarding exemption notification and the amended provisions of law.
Audhyogik Kendra Vikas Nigam v. CCC,CE,ST –[2016] 67 taxmann.com 92 (Madhya Pradesh HC)
86. The Court held that it was empowered to reduce the amount of pre-deposit as directed by the Tribunal on the grounds of financial difficulties of the assessee and directed it to pay pre-deposit equal to mandatory percentage as prescribed in section 35F of Central Excise Act,1944 even for appeals filed during the year 2012.
Maa Engineering v. Registrar – 2016 42 STR 425 (Ori.)
Demand / Extended Period
87. The Court held that follow on show cause notice based on earlier 3 show cause notices on the same issue could not invoke the extended period.
Simplex Infrastructures Ltd. v. CST – (2015) 39 STR 938 (Cal.)
88. The Tribunal held that the amount charged for supervision of manpower clearly fell under the category of Management Consultants Service and since the value of services were not disclosed in ST-3, the extended period of limitation was invokable.
Artefact Infrastructure Ltd. v. CCE – 2016 (42) STR 34 (Tri. – Mum.)
89. The Tribunal held that where the revenue had conducted investigation during the period August 2008 to December 2008 but had issued show cause notice after a lapse of 1¾ years in September 2010, the extended period of limitation was not invokable.
Shree Alloys Industries Pvt. Ltd. v. CCE – (2015) 39 STR 869 (Tri. – Del.)
90. The Tribunal held that where the assessee providing services to postal department which paid service tax on total value of services including value of services of appellant, the postal department would be entitled for CENVAT credit if service tax was paid by the assessee and therefore since it was a revenue neutral situation the demand on the assessee was not sustainable.
Dinesh M. Kotian v. CCE & ST – (2016) 42 STR 772 (Tri. – Mum.)
91. The Court held that since there was no assessment order against the petitioner, if could not be forced to pay an amount merely because it admitted the service tax liability in statements recorded. It held that the Department had the liberty to initiate appropriate action for recovery only after service tax liability was confirmed vide adjudication order and the same was not deposited.
Prosper Build Home P. Ltd. v. UOI – (2016) 42 STR 247 (All.)
92. The Tribunal held that in the case of a Hire Purchase Contract, the instalment payments are only the obligations of the hirer whereas the taxable event occurs when the contract is entered into and therefore the contention of the department that the service is continued to be provided during the payment of instalments and that the assessee is liable to pay service tax when the lease rental is paid is incorrect. Accordingly it was held that rate of service tax will be the rate prevalent on the date of contract and the demand for differential liability was set aside.
Electronica Finance Ltd. v. Commissioner of Central Excise – 2016-TIOL-947 – CESTAT – Mum.
93. The Court held that where the assessee conceded the demand on merits merely because no penalty was imposed in the original order it did not form sufficient ground for non-invoking the extended period of limitation.
AS Transport v. CESTAT – (2016) 42 STR 957 (Mad.)
Export of Services
94. The Tribunal held that the conditions of realisation of export proceeds in convertible foreign exchange required under Rule 3(ii) of the Export of Services Rules, 2005 was complied with by the assessee when the FIRC was in Indian rupees since it indicated that the foreign currency earned by the assessee was realized in India.
Sun-area Real Estate Pvt. Ltd. v. CST – (2015) 30 STR 897 (Tri. – Mumbai)
95. The Tribunal held that where the assessee was engaged in the activity of identifying customers in India on behalf of foreign manufacturers and canvassing features of CDMA Mobile phones and also providing services of repair and maintenance of the said phones, since the services were performed in India on behalf of a client situated abroad, the services were provided to clients abroad and therefore qualified as an export of services.
Samsung India Electronics Pvt. Ltd. v. CCE – (2016) 42 STR 831 (Tri. – Del.)
96. The Tribunal held that the assessee, engaged in the export of scientific and technical consultancy services was wrongly denied refund on the alleged ground that the services did not constitute export of services as the performance was within India, since the services were received abroad and the payment for the same was received in foreign exchange which indicated that the same amounted to export of services. Further, it held that the assessee was offering research and development expertise in new compounds of pharmaceutical products and even though some of the chemicals were provided by the service recipient, the services provided in relation to those materials did not fall within the bar of Rule 4 of Place of Provision Rules, 2012.
CCE v. Sai Life Sciences Ltd. – (2016) 42 STR 882 (Tri. – Mum.)
97. The Tribunal held that investment advisory services provided to the assessee’s clients located abroad in the form of reports and memoranda, who in turn use the same for advising clients regarding investment opportunities in India qualified as export as it was immaterial as to how the reports were used by the assessee’s clients.
Further, it held that where the assessee’s bank in India received Indian rupees from an account of a bank situated in a foreign company and issued an FIRC, declaring the same, the remittance was held to be in foreign exchange considering the FEMA Regulations.
Mount Kellet Management (I) Pvt. Ltd. v. CST – (2015) 40 STR 165 (Tri. – Mum.)
Penalty/Interest
98. The Tribunal upheld the imposition of penalty where the assessee took CENVAT credit in the absence of invoices and without making any effort to produce the actual invoices.
CCE v. Taurus Agile Technology Corporation P. Ltd. – (2015) 39 STR 880 (Tri. – Del.)
99. The Tribunal held that where the assessee paid the entire differential service tax liability before the date of visit of audit officers and payment of interest before issuance of SCN, there was no intention to evade payment of service tax and hence penalty under Section 78 was not imposable.
Radhe Residency v. CCE & ST – (2016) 42 STR 65 (Tri. – Ahmd.)
100. The Tribunal held that, in spite of the assessee having exercised option to pay entire demand of tax with interest and 25 percent penalty within one month of the adjudication order, the assessee was very well entitled to challenge tax, interest or penalty and matter on merits and the issue could not be treated as settled or closed in absence of any legal provision to that effect. It is only in case of amounts paid as per Settlement Commission, the assessee has no right to challenge the same.
CCE & ST v. Apex Communications – (2016) 42 STR 153 (Tri. – Bang.)
101. The Tribunal held that where the assessee wrongly availed CENVAT Credit of service tax and later reversed the same without utilization, the liability to pay interest would only arise when duty which was legally payable was not paid. Since the assessee was not liable to pay service tax, liability to pay interest could not be imposed. Further, there was no loss to revenue since duty was paid in excess.
TNT (India) Pvt. Ltd. v. CCE & ST – (2016) 42 STR 285 (Tri. – Bang.)
102. The Apex Court held that in view of judgment in Dharmendra Textile Processors 2008 (231) ELT (SC) penalty imposed under section 76 and 78 not reducible under section 80 of FA, 1994.
CST v. Lark Chemicals P Ltd – (2016) 42 STR 417 (SC)
103. The Court held that the proviso to section 73(1) of FA, 1994 extending limitation period from six months to five years had to be construed strictly and that the initial burden was on Department to prove that situations visualized by proviso existed and once it is able to bring on record material to show that appellant was guilty of any of those situations visualized by section then burden shifted to the assessee. It further held that for applicability of the proviso there must be deliberate avoidance of payment of duty payable in accordance with law and mere omission on part of assessee was not sufficient.
Bordubi Engineering Works v. UOI 2016 (42) STR 803 (Gau.)
104. The Tribunal held that penalty u/s. 78 cannot be imposed when there is no discussion on the allegation of fraud, collusion, willful misstatement or suppression of facts in the Show Cause Notice.
GRR logistics (P) Ltd. v. CST – 2016-TIOL-1408-CESTAT-Mad.
Refund and Rebate
105. The Court held that where the assessee paid tax on services rendered outside India and claimed refund of it after a year (after the period of limitation) on the ground that the amount was to be treated as a ‘deposit’ and not ‘tax’ and therefore was not barred by limitation, the limitation would apply since the amount was paid in a TR-6 challan and therefore was to be treated as tax and that even if the payment was made under a mistake of law, the period of limitation would apply.
ACST v. Natraj and Venkat Associates – (2015) 40 STR 31 (Mad. – DB)
106. The Tribunal held that where the assessee did not show all eligible credits in its ST-3 returns but filed a revised return the refund was to be granted on the basis of balance of CENVAT credit available in the CENVAT Account and not on the basis of incorrect balance in the ST-3 return, which was later rectified by the assessee by filing a revised return in any case.
Serco Global Services Pvt. Ltd. v. CST – (2015) 39 STR 892 (Tri. – Del.)
107. The Tribunal held that the doctrine of unjust enrichment would not apply to refund of service tax on account of export.
CST v. Pulcra Chemicals (India) Pvt. Ltd. – (2015) 39 STR 700 (Tri. – Mum.)
108. The Court held that the time bar under section 11B would not apply to refund of service tax paid under mistake of fact since it did not take the colour of tax.
Geojit BNP Paribas Financial Services Ltd. v. CCE, CUS & ST – (2015) 39 STR 706 (Ker.)
109. The Tribunal held that refund of service tax on terminal handling services could not be denied on the ground that the terminal handling services were charged by the shipping line under the category of business auxiliary services instead of Port Services by the port operator.
Sopariwala Exports v. CST – (2015) 39 STR 884 (Tri – Mum.)
110. The Tribunal held that where the assessee issued a credit note for excess service tax paid due to reduction in charges initially charged, adjustment between commercial enterprises who were in constant interface could occur and such occurrence was recorded through medium of credit and debit notes and since the two entities were part of the same group, adoption of credit note as mode of settlement was acceptable as sufficient evidence of compensation for services rendered and therefore the Department was unjustified in denying refund on the ground of unjust enrichment.
Piramal Enterprises Ltd. v. CST – (2016) 42 STR 17 (Tri. – Mumbai)
111. The Tribunal held that the Asstt. Commissioner who issued SCN for rejecting rebate claim on the ground of assessee availing inadmissible credit, was incorrect in doing so since the SCN was clearly beyond jurisdiction as the amount of credit proposed to be denied was in excess of monetary limit prescribed for adjudication by AC. It further held that rejecting the rebate claim by clubbing it with denial of CENVAT credit, was not proper and the appropriate course was to hold up rebate claim and initiate separate proceedings for denial of CENVAT credit by a proper authority
Ivy Comptech Pvt. Ltd. v. CCEC&ST – (2016) 42 STR 66 (Tri. – Bang.)
112. The Tribunal held that even if there was omission in the authorised letter i.e. it was signed by the Director and not the authorized signatory, so long as signatures in the refund claim and documents were not disputed, the omission was only a technical defect, which could be condoned or cured and the department was incorrect in rejecting refund on this ground.
Sponge Enterprise Pvt. Ltd. v. CCE & ST – (2016) 42 STR 322 (Tri. – Del.)
113. The Tribunal held that the date on which original claim was filed and not the date on which the revised application rectifying calculation errors, was filed, was to be taken as the relevant date. Accordingly, it held that since the original claim was filed within the time limit prescribed, refund was not barred by limitation especially when amount mentioned in revised application was also included in original application.
Banco Products India Ltd. v. CCE&ST – (2016 – 42 STR 535 (Tri. – Ahd.)
114. The Tribunal held that where refund was initially sanctioned to the assessee and credited to Consumer Welfare Fund on the ground of unjust enrichment and consequent to the Tribunal decision, deposited in the assessee’s account within 3 months of the decision, the revenue was not liable to pay interest on refund for the period for which the said amount was present in the Consumer Welfare Fund.
Purnima Advertising Agency Pvt. Ltd. v. CST – (2016) 42 STR 710 (Tri. – Ahd.)
115. The Court held that once refund was granted under section 11B, it could not be said to be “erroneous refund” in terms of section 11A of Central Excise Act and recourse available for recovery of such refund was only by way of following procedure laid down in section 35E of the Act and not under section 11A.
Eveready Industries India Ltd. v. CESTAT – [2016] 68 taxmann.com 180 (Madras HC)
116. The Tribunal held that the provisions of section 11B of the Central Excise Act 1994 would apply to every case of refund irrespective of the fact that the payment was made without authority of law and therefore where the assessee paid service tax erroneously, the contention of the department that the payment being without the authority of law was not barred by limitation could not be accepted.
Benzy Tours & Travels (P) Ltd. vs CST – 2016-TIOL-1104-CESTAT- Mum.
117. Once the refund is allowed by Commissioner (Appeals) by speaking order, it is not open to adjudicating authority to revisit the refund claim on merits and the only recourse was to contest the same before a higher judicial authority.
Lavino Kapur Cottons (P) Ltd. v. CCE – [2016] 68 taxmann.com 280 (Mumbai-CESTAT)
118. The Tribunal held that the first date on which refund claim was filed is to be considered as date of filing of refund claim and date of subsequent re-filing / submission of documents shall be ignored for calculating stipulated time limit.
Tab India Granites (P) Ltd. v. CCE & ST – (2016) 67 taxmann.com 315 (Chennai – CESTAT)
119. The Tribunal held that an Appellate authority could reject a refund claim on grounds / issues which are not arising out of adjudication order. Further, it held that the time limit of one year for filing a refund claim was to be calculated from the quarter end.
Indago v. CST – [2016] 69 taxmann.com 199 (Mumbai-CESTAT)
120. The Tribunal held that if service receiver has borne the incidence of tax, he can apply for refund of tax before his own jurisdictional officer.
Chambal Fertilizers & Chemicals Ltd. v. CCE – [2016] 69 taxmann.com 328 (New Delhi – CESTAT)
121. The Tribunal held that an assessee claiming both refund and interest on refund had to file refund application claiming refund of both duty as well as interest amount before expiry of one year from the relevant date.
Schenck Rotec India Ltd. v. CCE – (2016) 42 STR 1066 (Tri.-Del.)
Service of Notice / Order
122. The Court held that prior to May 10, 2013, an order had to be served by Registered post with acknowledgment due and that speed post was not valid.
Premier Garment Processing v. CESTAT – (2015) 39 STR 812 (Mad)
Show Cause Notice
123. The Tribunal held that where the Adjudicating authority confirmed demand on services for catering, supply of bed rolls, supply of cleaning staff under the category of Business Support Services but the Commissioner (a did not agree and classified the same as Business Auxiliary Services, though the same was not proposed in the Show-cause notice, the order passed by the CIT(A) travelled beyond the SCN and therefore was not sustainable.
Doons Caterers v. CST – (2016) 42 STR 447 (Tri – Del.)
124. The Court held that when Show Cause Notice is issued on the basis of allegation of “suppression of facts”, department must specify particulars of allegedly suppressed facts, otherwise such SCN issued by invoking extended period of limitation is bad in law.
Simplex Infrastructures Ltd. v. CST – [2016] 69 taxmann.com 97 (Calcutta HC)
Miscellaneous
125. The Court held that it is incumbent upon an adjudicating authority to follow the decision of a Larger Bench of the Tribunal cited by an assessee unless the same can be factually distinguished.
Muthoot Finance Ltd. v. UOI – (2015) 40 STR 26 (Ker.)
126. The Court held that where the adjudication of SCN issued to the assessee was pending, the department could not freeze the bank account of the assessee by invoking the recovery powers under section 87(b) since Section 87(b) would apply only after a proceeding under section 73 was concluded by an order determining the amount due and payable by the assessee. However, it noted that the Department could invoke the provisions of 73C providing the option of provisional attachment of properties to protect the interest of the revenue.
GSP Infratech Development Ltd v. UOI – (2015) 39 STR 945 (Kar.)
127. The Court held that once approval of the Committee of SEZ was received, the jurisdictional Central Excise Officer could not refuse to issue Form A2 on the pretext that such services were not allowed.
Sai Wardha Power Company Ltd. v. UOI – (2015) 39 STR 952 (Bom.)
128. The Court held that the service receiver to whom the burden of tax is ultimately passed on is not entitled to challenge the levy as the liability is imposed on the service provider.
N. Bala Baskar v. UOI – 2016 – TIOL-824- HC-MAD-ST
129. The Court held that the removal of sub-clause (j) of section 66D i.e., Negative List resulting in levy of service tax on “access to amusement facilities and admission to entertainment events” does not amount to parliament encroaching upon Entry 62 of List II of Constitution.
Kanjirappily Amusement Park & Hotels (P) Ltd. v. UOI – [2016] 68 taxmann.com 286 (Kerala HC)
130. The Tribunal held that where the demand for extended period of limitation and penalties imposed were set aside, the question of confiscation did not arise.
CST v. Idea Cellular Ltd. – (2015) 39 STR 993 (Tri. – Mum.)
131. The Tribunal held that the transfer of funds from the Head Office to the Overseas Branch could not be treated as a transaction between two separate entities since there is no independent existence of the overseas branch as a business and its economic survival is entirely contingent upon the will of the head office and therefore taxing such transfers is not contemplated by the Finance Act, 1994.
Tech Mahindra Ltd. v. Commissioner of Central Excise – 2016-TIOL-709-CESTAT – Mum.
132. The Tribunal held that without ascertainment of the receipts from the members as a quid pro quo for an identified service, the transaction did not meet the test of having rendered a taxable service. The entrance fee merely represented the present value of the assets of the club and was not a consideration for any service that a member may obtain from the club.
Gondwana Club v. CCCE – 2016 – TIOL- 661-CESTAT-Mum.
133. The Authority held that the activity of making available system to customer would qualify to be “transfer of right to use goods” and would not be liable to service tax provided possession and effective control is transferred to customers.
SIPCA India (P) Ltd. – [2016] 67 taxmann.com 142 (AAR-New Delhi)
134. The Court held that Department cannot refuse application for adjournment on medical grounds of Chartered Accountant and pass ex parte order when case was pending with department over six years.
CHL Ltd. v. CST – 2016 (42) STR 420 (Del.)
135. The Tribunal held that when failure to make 50% payment within time limit prescribed under the Voluntary Compliance Encouragement Scheme (‘VCES’) was for reasons not attributable to declarant but for the system error, benefit of the scheme could not be denied.
CCE v. Cityland Associates – [2016] 69 taxmann.com 176 (Mumbai-CESTAT)
136. The Court held that the Commissioner (Appeals) did not have any statutory power to condone the delay beyond 30 days and that the said statutory provision was to be strictly construed and any other approach would make statutory provision otiose and open the floodgates of writ petition before High Court.
Bengal Investment Ltd. v. AC (TARC) ST-I 2016 (42) STR 817 (Cal.)
Sri Balaji Agency v. CCE&ST, Trichy 2016 (42) STR 914 (Tri. – Chennai
137. The Tribunal held that the ancillary and incidental activities of pouring, pumping and laying of concrete entirely being related to sale of RMC was without any service element and therefore not liable to service tax.
Vikram RMC (P) Ltd. v. CST, Delhi 2016 (42) STR 866 (Tri. – Del.)