1. Doctrine of Promissory Estoppel – When can be applied against Government – Administrative Law

It is not the law that there can be no promissory estoppel against the Government in the exercise of its Government, public or executive powers. That would be in complete contradiction of the decisions of the Supreme Court. It is true that taxation is a sovereign or governmental function, but no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the Government, so far as the doctrine of promissory estoppel is concerned.

Where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is not necessary for the petitioner to show that it has suffered any detriment, and it is enough that the petitioner relied upon the promise or representation held out, and altered its position relying upon such assurance.

Manuelsons Hotels Private Limited v. State of Kerala and Others.: (2016) 8 Supreme Court 766.

2. Dishonour of cheque – Offence by company – Vicarious liability of persons in charge of and responsible for conduct of business of company – Negotiable Instruments Act, 1881, section 141

In the instant case, Company was arrayed as Accused 1 along with Chairman and other Directors. Accused 2 & 3 were Chairman and Managing Director, respectively and Accused 6 & 7 were signatory to cheques which were dishonoured. Accused 4 & 5 were Whole-time Directors and they were in charge of day-to-day business of Company. All of them had, with active connivance, mischievously and intentionally issued cheques in question. The High Court by the common impugned order, quashed the orders of issuance of summons against Accused 5 and 4. Considering totality of assertions made in complaint and also taking note of averments put forth relating to Accused 4 & 5 herein, that they were Whole-time Director and Executive Director and they were in charge of day-to-day affairs of Company, Held, High Court fell into grave error in concluding that there are no specific averments in complaint for issuance of summons against them and, hence, quashing the same. Therefore, order passed by High Court is set aside and Magistrate is directed to-proceed with complaint cases in accordance with law.

Standard Chartered Bank v. State of Maharashtra and Others. (2016) 6 Supreme Court Cases 62

3. Educational institution is an “industry’ – Workman for purpose of the Industrial Dispute Act

The question “who is a workman?” has been well settled by various decisions of the Supreme Court. A person to be a “workman” under the ID Act must be employed to do the work of any of the categories viz. manual, unskilled, skilled, technical, operational, clerical or supervisory.

The issue whether educational institution is an “industry’. and its employees are “workmen” for the purpose of the ID Act has been answered by a seven-Judge Bench of the Supreme Court in
A. Rajappa, (1978) 2 SCC 213 wherein it was held that educational institution is an industry in terms of Section 2(j) of the ID Act, though not all of its employees are workmen. Thus, a driver employed by a school, being a skilled person, is workman for the purpose of the ID Act.

Raj Kumar v. Director of Education And Others : (2016) 6 Supreme Court Cases 541

4. Locus standi – Meaning

Term “locus standi” is Latin term, general meaning of which is “place of standing”. Concise Oxford English Dictionary, defines “locus standi” as the right or capacity to bring an action or to appear in a court. Traditional view of “locus standi” has been, that person who is aggrieved or affected alone has the standing before court i.e. to say he only has a right to move court for seeking justice. Later, Supreme Court, with justice-oriented approach, has relaxed the strict rule with regard to “locus standi”, allowing any person from society not related to cause of action to approach the court, bona fide seeking justice for those who could not themselves approach the court

Amanullah v. State of Bihar. (2016) 6 Supreme Court Cases 699.

Sunil Moti Lala*, Advocate

A. Classification of Service

Accommodation Services

1. The Court held that services to any person by a hotel, inn, guest house, club or campsite for providing accommodation for a continuous period of less than three months was a taxable event that was entirely covered by the “Luxuries” in Entry 62 of List II of the Constitution of India and therefore outside the legislative competence of the Parliament. Further, it held that the Valuation Rules also do not provide machinery for levy and collection of tax on accommodation and rebate on room tariff and therefore in the absence of such machinery, levy was invalid.

Federation of Hotels & Restaurants Association of India v. UOI – (2016) 44 STR 3 (Del.)

Advertising Agency Services

2. Where the appellant, an advertising agency, conducted an outdoor advertising campaign outside India for the Ministry of Tourism, Government of India, the Tribunal held that service tax was not leviable on the media cost under the category of ‘Advertising agency services’ since the same was incurred beyond the territorial waters of India.

Grey Worldwide (India) Pvt. Ltd. v. CST (2015) 40 STR 1104 (Tri. – Mum.)

Business Auxiliary / Support Services

3. The Tribunal held that commission earned on promotion or marketing of products under multi-level marketing scheme was liable to tax under Business Auxiliary Services.

Anshita Chawla & Ors. v. CST, New Delhi 2016 (44) STR 300 (Tri. – Del.)

4. The Tribunal held that a branch by its very nature could not have independent existence and therefore reimbursements made to an overseas branch by the Head Office in India could not be liable to service tax as it would amount to taxation of transfer of funds which was not contemplated under the Act. It further held that merely because the branch had, in some way, contributed to the activities of the appellant in discharging its contractual services, the definition of Business Auxiliary Services did not apply and it would not render the transfer of financial resources to the branch taxable under Section 66A of FA 1994.

Milind Kulkarni v. CCE – 2016- TIOL-709-CESTAT-Mum

5. The Tribunal held that the process of chilling milk making it marketable in terms of Chapter Note 6 of Chapter 4 of CET amounted to manufacture and therefore service tax was not leviable on such process. It further held that the principle of ‘Noscitur a Sociis’ was applicable only when language of statute was ambiguous and in the instant case since the language in Chapter Note defining manufacture was clear enough to include ‘any other treatment to render product marketable’ which would include the process of chilling milk.

Vinayak Industries v. CCE & ST, Jaipur-I 2016 (45) ST 191 (Tri. – Del.)

Construction Services

6. The Tribunal held that services of laying pipeline for providing water supply to staff quarters of NTPC was not for social or philanthropic purposes as the said staff quarters was part of the statutory obligation of NTPC for the ultimate object of running the commercial and industrial organisation. Therefore, it held that the services provided by the assessee clearly fell within the category of Commercial or Industrial Construction Services.

Central India Engineering Co. v. CCE – (2016) 44 ST 657 (Tri. – Mum.)

7. The Court held that below poverty line houses constructed by assessee contractor for State Housing Board were meant for residential purpose and not for commerce, industry, or any other business or profession and therefore the said services fell within the Exemption clause 12 of Notification No. 25/2012-ST dated 20-6-2012 and therefore the assessee was not liable to pay service tax on the same.

Bharat Bhushan Gupta & Co. v. State of Haryana 2016 (44) STR 195 (P&H)

8. The Tribunal held that pumping of RMC at desired spot was not part of a service but part of sale of RMC and therefore was not liable to service tax.

Ultratech Concrete v. CST, Delhi 2016 (44) STR 274 (Tri.-Del.)

Consulting Engineering Services

9. The Court held that there was a clear intention of the legislature to bring consulting engineering within the ambit of service tax and therefore service tax would be leviable on such services as long as it is rendered by a consulting engineer whether it is an individual, company, association of persons, etc. Accordingly, it held that the assessee company, providing consultancy services as a consulting engineer would be chargeable to service tax under this category.

Tata Consultancy Service v. UOI 2016 (44) STR 33 (Kar.)

10. Where the revenue had sought to demand service tax on the projects undertaken by the assessee relating to Environmental Biotechnology, Environment Impact Assessment, Environmental Monitoring, Environmental Policy Analysis, Hazardous Waste Management under the category ‘Consulting Engineer’ service, the Tribunal held that determining the tax liability by linking the title of the project with the description as appearing in Wikipedia (unauthenticated source) without examining specifics of the project was inappropriate as on the facts of the case the assessee’s services in respect of the said projects were not in the nature of consulting engineering services.

National Environment Engg. Research Inst. v. CCE& CST (2015) 40 STR 1115].

Club or Association Service

11. The Tribunal held that collection of subscription to manage, maintain and administer buildings was not liable to service tax.

CST-I, Mumbai v. Apsara Co-op. Housing Society Ltd. 2016 (44) STR 303 (Tri. – Mum.)

Franchise Service

12. The Court held that the franchise agreement was limited to precise period of time stipulated therein, at the end of which or in case of breach of its terms, the right of franchisee to display mark of franchisor and its trade dress and all other permissions ended and therefore the franchise agreement was not a sale but a classic example of permissive use of defined intangible rights subject only to service tax and not VAT.

Mahyco Monsanto Biotech (India) Pvt. Ltd. v. UOI 2016 (44) STR 161 (Tri. – Mum.)

Intellectual Property Service

13. The Tribunal held that only those IPR recognised under any law for the time being in force in India were taxable, as was apparent from the definition of the impugned service and therefore, since in the case of the assessee, all other than one of its IPRs were recognized in India, it held that service tax were not leviable on such IPRs. With respect to the IPR registered under Indian laws, it held that the IPR service having been provided prior to introduction to levy, service tax was not leviable notwithstanding that payment for this service was received in piecemeal manner over period of time after the levy.

Reliance Industries Ltd. v. CCE&ST, Mumbai 2016 (44) STR 82 (Tri. – Mum.)

Management Consultancy Service

14. The Tribunal held that merchant banking services, services for providing independent opinions, private placement, financial valuation, services performed in relation to software development projects, fees for underwriting government securities and merger and acquisition services were not covered under Management Consultancy Services.

DSP Merrill Lynch Ltd. v. CST – (2016) 44 ST 436 (Tri. – Mum.)

Management, Maintenance and Repair Service

15. Where the assessee was engaged in leasing Government Land and collecting charges for maintenance of street lights and repair and maintenance of roads from entrepreneurs, the Tribunal held that even if the charges were statutorily prescribed, they constituted consideration for rendition of services and there was nothing in the Finance Act which provided that such charges are not liable to services tax. It held that there was no inherent exemption from levy of service tax merely on the ground that the service provider or recipient was the Government or Government Agency.

Chhattisgarh State Ind. Dev. Corp. Ltd. v. CCE&ST – (2016) 44 ST 642 (Tri – Del.)

16. The Tribunal held that management, maintenance and repairs carried out during the period 16-6-2005 to 25-7-2009 was retrospectively exempt from the payment of service tax under section 97(1) of the Finance Act, 2012 and hence levy of service tax pertaining to the said period was unsustainable.

MP Audhyogik Kendra Vikas Nigam v. CCE – (2015) 40 STR 875 (MP)

Manpower Recruitment & Supply Agency Services

17. The Tribunal held that the placement fees collected by the assessee was nothing but an amount to defray the expenses incurred by the assessee for organising the campus interview and was not taxable as manpower recruitment and supply agency service.

Sydenham Institute of Management v. CCE, Mumbai-I 2016 (44) STR 69 (Tri. – Mum.)

18. The Tribunal held that the reimbursement of personnel cost by the assessee from the lessee, as per the lease agreement would not be subject to service tax under the category of Manpower Recruitment & Supply Agency Services.

PTL Enterprises Ltd. v. CCEC & ST, Kochi 2016 (45) ST 265 (Tri. – Hyd.)

19. The Tribunal held that deputing employees to group companies was not taxable under the category of Manpower Recruitment & Supply Agency Services.

Spirax Marshall P. Ltd. v. CCE, Pune-I 2016 (44) STR 310 (Tri. – Mum.)

Outdoor Catering Services

20. Where the assessee, an institute of hotel management had undertaken to prepare cooked food and supply the same to various schools under mid-day meal scheme of the Government for which it received fixed payments, the Tribunal held that demand of service tax from the assessee under the category of outdoor catering service was not permissible since the assessee was not preparing meals or serving the same in school premises but was preparing the same at its own premises and supplying it to the schools and therefore could not be considered as an outdoor catering service provider.

Ambedkar Institute of Hotel Mgmt v CCE – (2015) 40 STR 823 (Tri. – Del.)

Passenger Transportation Services

21. The Tribunal held that carrying of passenger baggage by the assessee airline was liable for service tax under the category of transportation of passenger by air services since the same was an integral part of transportation of passenger by air services in view of section 65A of the Act. Further, since there was no separate contract for transportation of excess baggage, it held that the demand of service tax under the category of transportation of goods by air service was not sustainable.

Kingfisher Airlines Ltd v. Commissioner of Service Tax, Mumbai-1 (40) STR 1159 (Tri. – Mum.)

Photography services

22. The Tribunal held that issuance of Elector’s Photo Identity Cards being a sovereign activity carried out under contract from the State/Union Government was not liable to service tax.

Instrumentation Ltd. vs. CCE&ST, Lucknow 2016 (45) ST 182 (Tri. – All.)

Technical Testing & Analysis Services

23. Where the assessee was engaged in providing services of testing and quality compliance of seafood, the Tribunal held that seafood being a kind of animal was exempt from service tax under the category of Technical Testing & Analysis Services and accordingly held that the assessee would not be liable to service tax.

Shrikant S Endait v. CCE, Nashik 2016 (45) STR 69 (Tri. – Mum.)

Transportation of Gas through pipeline Service

24. Where the assessee transported gas through a pipeline on Free on Road (‘FOR’) basis and the cost of transportation was included in the value for the purpose of payment of excise duty, the Tribunal held that the assessee could not be held to be a service provider and the buyer of Gas to be the service recipient. Accordingly, it held that service tax was not leviable.

Grasim Industries Ltd. v. CCE, Indore 2016 (45) ST 65 (Tri. – Del.)

Works Contract Service

25. The Tribunal held that prior to 1-6-2007 composite indivisible works contracts were not liable to service tax.

RRB Energy Ltd. v. CST, Chennai 2016 (45) ST 187 (Tri. – Chen.)

B. Valuation

26. Where the assessee had imparted training in computer based multi-media and animation and for doing so had entered into an agreement with M/s. Aptech Ltd., which provided that the assessee would be entitled to 80 per cent of the fees from students which were collected in the name of Aptech Ltd., the balance being retained by Aptech Ltd., the Tribunal held that the Revenue was incorrect in seeking to impose service tax on the differential 20 per cent retained by Aptech Ltd. on the ground that service tax was payable on the gross amount charged. It held that under section 67 of the Act, the gross value charged for service was to be considered as the value for payment of service tax and since the assessee had received only 80 per cent of the amounts collected from students, demand on the balance 20 per cent was unsustainable.

Kunal IT Services Pvt. Ltd. v. CCE – (2015) 40 STR 560 (Tri. – Mum.)

27. The Tribunal held that in the case of warranty services, no service tax was leviable on the value of spare parts sold during the course of providing such services.

Shiva Automobiles Pvt. Ltd. v. CCE&ST – (2016) 44 STR 696 (Tri. – Chen.)

28. Where the SEZ unit of the assessee providing service to the DTA unit of the same company without receiving any consideration and the Revenue proposed to demand tax on the same, the Court held that the issue was already decided in favour of the assessee for an earlier period wherein it was held that although for the purposes of taxation, units in a SEZ were distinct entities, no service tax was leviable since the value of services was Nil.

Pr. CCE v. Larsen and Toubro Ltd. – (2016) 44 STR 469 (Guj.)

29. The Tribunal held that the value of free supplies made by service recipient was not includible in assessable value of services.

E. M. Mani Constructions Pvt. Ltd. v. CCE&ST, Cochin 2016 (44) STR 265 (Tri. – Bang.)

30. The Tribunal held that the value of diesel and explosives supplied were not includible in gross value of Site Formation Services.

Sushee Infra Pvt. Ltd. v. CCEC&ST, Hyderabad-II 2016 (44) STR 263 (Tri. – Bang.)

31. Where the assessee and his brothers had jointly rented out an immovable property and the lease agreements entered into by them were in their individual capacity, the Tribunal held co-owners of the property could not be considered as association of persons liable for service tax jointly or severally and the denial of benefit of threshold exemption under notification no 6/2005 to each individual was incorrect.

CCE v. Deoram Vishrambhai Patel (2015) 40 STR 1146

32. The Court held that premium for lease transfer was consideration received for renting services and therefore liable to service tax. It held that it was to be treated as consideration for lease irrespective of the fact that it was capital investment.

Hobbs Brewers India Pvt. Ltd. v. UOI 2016 (45) ST 60 (Tripura)

33. The Tribunal held that passenger service fee and airport charges are not includible in gross value of services.

American Airlines v. CST, Delhi 2016 (45) ST 226 (Tri. – Del.)

C. CENVAT Credit

34. The Tribunal held that the assessee was eligible to claim CENVAT Credit on the service tax paid on works contract services used for the maintenance of office equipment.

Red Hat India Pvt. Ltd. v. PCST – (2016) 44 STR 451 (Tri. – Mum.)

35. The Tribunal allowed CENVAT credit of service tax paid on payment made to the bank for its services viz. augmentation of funds for establishing foundries near Hyderabad as the said activities were in relation to setting up of a factory.

CCE v. Hinduja Foundries Ltd – (2016) 44 STR 424 (Tri. – Chen.)

36. The Tribunal held that where the assessee had availed of an accommodation facility for official stay which it had incurred expenditure which formed part of its business expenditure, it was eligible to claim CENVAT Credit on the same and the Authorities assessing the assessee, were not justified in getting into the correct classification or tax liability of the services availed.

Castex Technologies Ltd. v. CCE & ST – (2016) 44 STR 477 (Tri. – Del.)

37. The Tribunal allowed CENVAT credit of service tax paid on maintenance of residential colony for its workers near the factory of the assessee, noting that the factory was located in a remote area and the assessee would not be in a position to run its plant in the absence of the residential colony for its workers.

Mangalam Cement Ltd. v. CCE & ST – (2016) 44 STR 422 (Tri. – Del.)

38. The Tribunal held that the only document to ascertain whether CENVAT credit had been availed correctly or not was the CENVAT credit account and not the ST-3 Return and therefore where there was no allegation that the assessee had wrongly availed credit vis-à-vis the CENVAT Credit account, the Revenue was incorrect in contending so based on the CENVAT credit shown in the ST-3 return.

Chandigarh Network Systems Pvt. Ltd. v. CCE – (2016) 44 STR 603 (Tri. – Chan.)

39. The Tribunal allowed CENVAT credit of service tax paid on group insurance services and manpower supply services as both the services had relevance to the manufacturing of products and the cost of the said services were included in the cost of manufactured product.

CCE v. Carboline (India) Pvt Ltd – (2016) 44 STR 623 (Tri. – Chen.)

40. The Tribunal held that CENVAT Credit on service tax paid on i) courier services used for procurement of small engineering items, raw materials and testing materials directly related to manufacturing and ii). record keeping services, was allowable.

Perfetti Van Meele India Ltd. v. CCE – (2016) 44 STR 624 (Tri. – Chan.)

41. The Tribunal allowed CENVAT Credit of service tax paid on housekeeping services in factory premises as keeping the factory premises neat and clean was a statutory requirement of Section 11 of Factories Act, 1948, the compliance of which was mandatory.

Indian Additives Ltd. v. CCE – (2016) 44 STR 611 (Tri. – Chen.)

42. Where the assessee, a commission agent arranged for transportation of goods and paid tax on GTA services for which it claimed reimbursement thereof from its customer, the Tribunal held that input tax credit of tax paid on GTA Services was not allowable under the Cenvat Credit Rules, since the assessee was merely an agent and not the provider of taxable services.

Dhanshree Ispat v. CCE – (2016) 72 taxmann.com 5 (Mum.)

43. The Tribunal held that if and when the department demand service tax liability for taxable services rendered during a particular period, a corresponding right to avail CENVAT Credit on inputs or capital goods received by the assessee during the same period would accrue to the assessee and therefore held that the Department was incorrect in denying CENVAT credit for the period prior to registration where the assessee had paid service tax on services rendered during that period.

Spandana Spoorthy Financial Ltd. v. Commissioner – (2016) 72 taxmann.com

44. The Tribunal held that service tax paid on the freight and shifting / relocation of employee services availed by the assessee was admissible as CENVAT Credit as prior to 2011, the definition of input services was not restricted to services used in or in relation to the business of manufacture of the final product and therefore such expenses were allowable since the same were provided to employees in relation to the business of the assessee.

LG Electronics India Pvt. Ltd. v. CCE – (2016) 44 STR 97 (Tri. – All.)

45. The Tribunal held that classification of services could not be changed at the service recipients end and therefore held that the Department was not justified in denying CENVAT Credit on the ground that the services were to be classified as Business Auxiliary Services as opposed to the classification made by the service provider i.e. management consultancy services.

Newlight Hotels & Resorts Ltd. v. CCE – (2016) 44 STR 258 (Tri. – Ahmd.)

46. The Tribunal allowed CENVAT Credit of service tax paid on photography services used for verification of manufacturing activity, outdoor catering for providing food to employees and R&D services for improving technology as all the services were input services and were integrally connected with the manufacturing activity of the assessee.

Wabco TVS (India) Ltd. v. CCE – (2016) 44 STR 417 (Tri. – Chen.)

47. The Tribunal held that in the absence of statutory provisions, adjustment of service tax wrongly paid by the second unit of the assessee on GTA services availed by the first unit was not permissible but the second unit was entitled to take credit of amount wrongly paid.

Plastichemix Industries v. CCE&ST, Vadodara 2016 (44) STR 254 (Tri. – Ahmd.)

48. The Tribunal held that CENVAT credit of service tax paid on event organised by the assessee to show its new plant and production capacity to new buyers was allowable, since the same is part of sales promotion activity.

Monarch Catalyst Pvt. Ltd. v. CCE, Thane-I 2016 (44) STR 96 (Tri.-Mum.)

49. The Tribunal held that CENVAT credit of service tax paid on shifting expenses on transfer of employees was allowable as the same has been incurred to comply with transfer policy of staff amongst its various units in pursuance of its business activities.

L.G. Electronics India Pvt. Ltd. v. CCE&ST, Noida 2016 (44) STR 97 (Tri.-All.)

50. The Tribunal held that CENVAT credit on service tax paid for various activities such as cleaning, garden maintenance, civil and construction work, painting and fencing work, was allowable having been rendered in factory premises therefore in relation to the assessee’s manufacturing activity.

CCE, Nagpur v. International Combustion (I) Ltd. 2016 (44) STR 110 (Tri. – Mum.)

51. The Tribunal held that the appellant was eligible for CENVAT credit on service tax paid on erection / construction of underground and overground pipelines for supply of water to its raw material plant as the said services did not fall in exclusion portion of definition of input service.

Rashtriya Ispat Nigam Ltd. v. CCEC&ST, Visakhapatnam 2016 (44) STR 136 (Tri. – Hyd.)

52. The Court held that the factual findings of Tribunal viz., that the assessee delivered goods on FOR destination basis with risk and ownership remaining with assessee till goods reach customer, having become final, all conditions of CBEC Circular fulfilled and therefore CENVAT credit was not deniable.

CCE&ST, Bengaluru-IV v. Ultra Tech Cement Ltd. 2016 (44) STR 227 (Kar.)

53. The Tribunal held that in view of CBEC Circular No. 999/6/2015-CX (clarifying that place of removal in case of export of goods is port/ICD/CFS), the CHA service availed by assessee was an input service and credit of service tax paid thereon was admissible. It further held that CENVAT credit of service tax paid on outdoor catering service proportionate to expenditure borne by the assessee was also admissible.

CCE, Belapur v. Apar Industries Ltd. 2016 (45) STR 71 (Tri. – Mum.)

54. The Tribunal held that CENVAT credit of service tax paid on group health insurance scheme premium for employees was admissible as and when employees fall sick, as it was necessary to provide them with proper treatment to prevent loss of manhours and disruption of manufacturing lines. It further held that group health insurance premium for family of employees did not have direct nexus with manufacturing activity, hence ineligible for credit as input service.

Murugappa Morgan Thermal Ceramics Ltd. v. CCE, Chennai-III 2016 (45) STR 74 (Tri. – Chen.)

55. The Tribunal held that CENVAT credit could not be denied to the assessee on the ground that the input services were received by an unregistered branch of the assessee considering the fact that the assessee was in legal occupation of the branch and the branch office was subsequently registered.

Pangea 3 Legal Database Systems Pvt. Ltd. v. CCE & ST, Noida 2016 (45) STR 76 (Tri. – All.)

56. The Tribunal held that hotel and conference services availed by the assessee for sales of generated scrap and for attending marketing conferences, was covered under sale promotion in definition of input services and therefore CENVAT credit of service tax paid on the aforesaid services was admissible.

Maharashtra Seamless Ltd. v. CCE, Raigad 2016 (45) STR 81 (Tri. – Mum.)

57. Where, as per the agreement entered into by the assessee and the buyer, goods such as glass or glass items were required to be delivered at the buyer’s premises, the Tribunal held that expenses incurred on hiring contractor for shifting and unloading of goods at the buyer’s premises were covered under the definition of input service and therefore CENVAT credit on the same was admissible.

Asahi India Glass Ltd. v. CCE, Gurugram II 2016 (45) STR 85 (Tri. – Chan.)

58. The Tribunal held that definition of input service did not require that credit could be taken only if services were received in factory premises and where the genuineness of transaction and duty paying document was not in doubt, CENVAT credit could not be denied by the department on the ground that the services were used outside the factory premises as the bills for such services were issued in the name of the assessee’s corporate office. It further held that CENVAT rules being beneficial piece of legislation enacted for removing cascading effect, denial of credit sighting procedural irregularities was unsustainable.

Star Drugs & Research Labs Ltd. v. CCE & ST, Chennai-III 2016 (45) STR 88 (Tri. – Chen.)

59. The Tribunal held that services availed for the expansion capacity of Effluent Treatment Plant and Flooring inside the factory fell within ‘modernisation, renovation and repair works’ and therefore CENVAT credit on the same were allowable.

Mahindra & Mahindra Ltd. v. CCE, Hyderabad-I 2016 (45) STR 92 (Tri. – Hyd.)

60. The Tribunal held that the amendment in definition of input service, replacing words ‘from place of removal’ to ‘up to place of removal’ would make no difference to ‘Free on Road’ destination sales as in that case the ‘place of removal’ gets extended to buyer’s premises.

Birla Corporation Ltd. v. CCE & ST, Lucknow 2016 (45) STR 103 (Tri. – All.)

61. The Tribunal held that Debit Notes and e-payment challans are valid documents for claiming CENVAT credit on input services as per Rule 9(1)(e) of CCR, 2004 which specifies that CENVAT credit can be availed on challans evidencing payment of service tax.

Cargil India P. Ltd. v. CCEC & ST, Bengaluru 2016 (45) STR 124 (Tri. – Bang.)

62. The Court held CENVAT credit of service tax paid on courier services used for transportation of finished goods from and input into factory was allowable as the issue in respect of GTA services for such transportation has already been held in favour of the assessee in a precedent case in view of term “from place of removal” used in definition of input services.

CCE v. Ambalal Sarabhai Enterprises Ltd. 2016 (45) STR 174 (Guj.)

63. Where the assessee, a manufacturer of paper, required lot of water as input, the Tribunal held that CENVAT credit of service tax paid on repair and maintenance service and erection and commissioning services used for laying pipeline outside factory to procure water was admissible.

Orient Paper Mills v. CCE & ST Raipur 2016 (45) STR 178 (Tri. – Del.)

64. The Tribunal held that CENVAT credit on consultancy services used for Solar Power Plant was admissible since the project was intended for generating electricity for use by assessee in its business and that the location of plant was not relevant.

Shree Cement Ltd. v. CCE&ST, Jaipur-I 2016 (45) STR 204 (Tri. – Del.)

65. The Tribunal held that Maintenance and Repair, Consulting, Courier, CHA, Professional, Insurance, Visa transaction, Rent-a-Cab services, freight being services relating to business were to be considered as input services prior to 1-4-2011.

KLA Tencor Software India Pvt. Ltd. v. CST, Chennai-III 2016 (45) STR 242 (Tri. – Chen.)

66. The Tribunal held that the services availed by the assessee from pipeline laying contractors, rendering transportation of gas through pipeline had direct nexus with the output service of transportation of gas was to be considered as input services and therefore CENVAT credit on the said services was admissible.

Reliance Gas Transportation Infrastructure Ltd. v. 2016 (45) STR 286 (Tri. – Mum.)

D. Others

Appeal / Assessment

67. The Court held that where the Department had filed an appeal and sent relevant documents to the assessee with directions to file the memorandum of cross objections within 45 days but due to non-receipt of order, the assessee requested for one week’s time and filed the cross objections thereafter, the Tribunal was incorrect in rejecting the same on the ground that it was time barred since there was no time limit prescribed under the Central Excise Act, 1944 for filing of cross objections and therefore the cross objection could not said to be time barred.

Indore Municipal Corporation v. CCE – (2016) 44 STR 207 (MP)

68. The Court held that where the matter had been remanded by the Tribunal for re-quantification of service tax demand, it was open for the authority to decide the question of penalty imposable where the demand was confirmed and that the Tribunal could not restrict the same by giving direction that no penalty could be imposed in remand proceedings.

CST v. Zak Traders & Exhibitions Pvt. Ltd. – (2015) 40 STR 873 (Mad.)

69. The Court held the CIT(A) was not justified in dismissing appeal merely because verification of appeal was not done properly without providing the assessee an opportunity to remove defect. Accordingly, it held that the impugned order was liable to be set aside.

Bharat Sanchar Nigam Ltd. vs. CCE & ST, Guwahati 2016 (45) STR 3 (Gau.)

70. Where the assessee had made a claim for deduction of land value in determining the value of services and provided requisite information for such calculation and the adjudication was completed without considering such information and it was stated that no corroborating evidence was provided, the Court held that the order of the adjudicating authority suffered from a mistake apparent from record and therefore admitted the petition filed by the assessee.

Sree Daksha Property Developers Pvt. Ltd. v. CCE – (2016) 44 STR 236 (Mad.)

71. Where the assessee filed an appeal before the Tribunal after a lapse of statutory period of filing of appeal along with an application of condonation of delay wherein the assessee prayed that the delay occurred due to misplacement of order by a security guard on account of closure of the company for the last 4 years, the Court held that normally, fault of the employees could not be a reason for condoning delay but considering the fact of closure of the company, the delay was to be condoned.

Hitech Manpower Consultant Pvt. Ltd. v. CESTAT – (2016) 44 STR 31 (Mad.)

72. The Tribunal held that where the respondent was an individual deceased person, the Revenue was not competent to file an appeal against such person and therefore held that such appeal stood abated.

CST v. Kalpesh Transport – (2016) 44 STR 669 (Tri. – Mum.)

73. The Tribunal held that the option for availing composition scheme under Works Contract Service was not required to be given in writing and that mere payment of service tax under the composition scheme would act as availing of option.

Mehta Plast Corporation v. CCE – (2016) 44 ST 651 (Tri. – Del.)

74. The Tribunal held that best judgment assessment under section 72 could be invoked only for ascertaining the quantum of liability where the actual liability could not be determined with mathematical precision due to non-availability of relevant documents or financial records and not with regard to determination of the category of taxable services provided.

Shubham Electricals v. CST – (2015) 40 STR 1034 (Tri. – Del.)

Demand / Extended Period of limitation

75. The Tribunal held that invoking the extended period of limitation on the ground that the assessee had not paid service tax and filed ST-3 returns without establishing wilful misstatement or separation of fact was incorrect.

Punj Llyod Ltd. v. CCE – (2015) 40 STR 1028 (Tri. – Del.)

76. The Tribunal held that amounts deposited during investigation were to be treated as pre-deposit on subsequent dropping of demand. It further held that the date of payment of tax of such amount deposited could not be taken as relevant date for limitation purpose.

USV Ltd. v. CST, Mumbai-II 2016 (45) STR 83 (Tri. – Mum.)

77. The Tribunal held that since service tax payable by assessee under Reverse Charge was available as credit to it, the entire situation results into a revenue neutral scenario and therefore no mala fide intention could be attributable in the alleged delay in payment of service tax and therefore extended period of limitation was not invocable.

Persistent System Ltd. v. Principal CST, Pune 2016 (45) STR 177 (Tri. – Mum.)

Penalty / Interest

78. The Tribunal held that where there was failure to pay service tax under Reverse Charge mechanism and there was scope of interpretation in such cases, suppression could not be alleged and therefore the penalty was set aside.

Fermanta Biotech Ltd. v. CCE – 2016-TIOL-2571-CESTAT-Chd

79. Where the fact that the assessee was an intermediary between two companies for which it received brokerage on which no service tax had been paid was disclosed to the Revenue and the Revenue failed to raise demand within the time limit prescribed, as a result of which the Commissioner dismissed the subsequent demand raised on the ground that it was time barred, no penalty could be levied as there was no suppression on the part of the assessee.

CCE v. Hira Ferro Alloys Ltd. – 2016-TIOL-2520-CESTAT-Del

80. The Tribunal held that simultaneous penalties under Section 76 as well as Section 78 could not be imposed and that the benefit of reduced penalty under Section 78 could not be extended if the duty, interest and penalty was not deposited either before raising demand or within 30 days of adjudication order.

BSL Ltd. v. CCE – (2016) 44 STR 419 (Tri. – Del.)

81. The Tribunal held that a judgment of the Apex Court, allowing higher rate of interest on refund was in terms of the inherent powers of the Apex Court and the Tribunal, being a creature of statute could not decide cases beyond specific provisions of the Central Excise Act, 1944. Accordingly, it held that since interest was allowed to the appellant at 8% or 6% as per statutory provisions, interest at 12% was not admissible.

Bajaj Auto Ltd. v. CCE&ST, LTU Mumbai 2016 (44) STR 108 (Tri. – Mum.)

82. The Tribunal held that interest was not payable for extended period if there was no intention to evade tax even if tax had been paid and not contested on the ground of limitation.

Bank of Baroda vs. Commissioner of Service Tax, Mumbai (40) STR 1069 (Tri. – Mum.)

83. The Tribunal held that where there was a dispute on the allowability of CENVAT credit of service tax paid on group health insurance scheme premium for employees and group health insurance premium for family of employees was a dispute requiring interpretation of the provisions of law, there was no mala fide intention on part of the assessee and hence penalty could not be imposed.

Murugappa Morgan Thermal Ceramics Ltd. vs. CCE, Chennai-III 2016 (45) STR 74 (Tri. – Chen.)

84. Where CENVAT credit for services used for fabrication of pipelines and laying foundation of tank/cooling tower was disallowed, penalty for wrong availment of credit could not be levied as the issue was that of interpretation of statute.

Mahindra & Mahindra Ltd. v. CCE, Hyderabad-I 2016 (45) STR 92 (Tri. – Hyd.)

Refund and Rebate

85. The Tribunal held that refund of accumulated CENVAT credit on input services used for exports would be admissible under Rule 5 of the CENVAT Credit Rules only if the service provider was not able to utilise such credit for discharging its tax liability in domestic business and therefore held that it was difficult to ascribe any particular date as the relevant date for computing limitation period under section 11B and therefore held that no time limit would apply to such refund claim.

Affinity Express India Pvt. Ltd. v. CCE – (2015) 40 STR 808 (Tri. – Mum.)

86. The Tribunal held that the classification of services provided by the service provider i.e. Technical Testing and Analysis Services could not be challenged by the authorities at the service recipients end for the purpose of denying refund.

CCE v. Kriti Inds (I) Ltd. – (2016) 44 STR 684 (Tri. – Del.)

87. The Tribunal held that where the assessee, an exporter of goods claimed refund of service tax on terminal handling charges and bill of lading charges availed for export of goods, the Department was incorrect in denying refund on the ground that the input service provider had paid service tax on these input services under the category of business auxiliary services and not port services as the assessee was not required to verify the registration certificates of the input service provider for the purpose of claiming refund under Notification No 41/2007. Therefore, it held that refund of service tax paid on any services used in relation to export of goods was admissible.

SRF Ltd. v. CCE – (2015) 40 STR 980 (Tri. – Del.)

88. Where the assessee claimed refund of excess service tax paid on account of a subsequent reduction in consideration received for brokerage services which was effected through a credit note, the Tribunal held that credit notes and other accounting documents constituted sufficient evidence of not having passed the burden of service tax onto clients and therefore held that the refund claim made was sustainable. It held that credit notes and debit notes had been used for centuries for the purpose of acknowledgement of dues and therefore upheld reliance on the impugned credit note in the instant case.

Edelweiss Securities Ltd. v. CST – (2016) 44 STR 429 (Tri. – Mum.)

89. Where the assessee claimed refund based on Notification No 12/2013 which was denied by the lower authorities since the specified input services were not approved at the time of availment, the Tribunal held that the notification was an exemption notification and the conditions of exemption had to be fulfilled at the time of availment and since one of the conditions, viz. that the input services were to be approved by an approval committee, was not satisfied the refund claim of the assessee had been rightly dismissed.

Kolland Developers Pvt. Ltd. v. CCE – (2016) 44 STR 65 (Tri. – Mum.)

90. The Tribunal held that where a refund claim was received by the Department, the normal presumption was that it should be examined and verified and if upon such examination it was liable to be rejected, a show cause notice containing all grounds of rejection was to be issued to the claimant and therefore where a refund claim was allowed by the CCE(A), initiation of new proceedings by the Department, raising new grounds for rejection which were not raised before was incorrect and void.

Sonar Impex v. CCE – (2015) 40 STR 793 (Tri. – Bang.)

91. Where the assessee an SEZ under the power sector, generating electricity as its authorised operation had sold surplus power in the DTA in accordance with Rule 47(3) of the SEZ Rules, it could not be held that the mere selling of surplus power in DTA meant that the assessee owned / carried on operations / business other than SEZ operation. Thus it held that the Department was incorrect in denying refund to the assessee as the assessee clearly fulfilled the conditions of paragraphs 2(b) and 2(c) of Notification No. 17/2011-ST was therefore entitled to refund of service tax.

Adani Power Ltd. v. CST, Ahmedabad 2016 (44) STR 146 (Tri. – Ahmd.)

92. The Court held that the question of refund application being barred by limitation would arise only if there was a conclusion to the fact that services rendered by the assessee were amenable to service tax. Consequently, if the services were not liable for service tax, rejection of refund claims on the grounds of being barred by limitation was incorrect.

Alar Infrastructures Pvt. Ltd. v. CCE 2015 (40) STR 1066 (Del.)

93. The Tribunal held that since the assessee claimed refund of amount paid which was not liable to be paid as per service tax provisions, Section 11B of CEA, 1994 providing for limitation was not applicable.

Nikon India Pvt. Ltd. v. CCE, Gurugram-II 2016 (45) STR 271 (Tri. – Chan.)

94. The Tribunal held that registration with the department was not a pre-requisite for claiming the refund and refund of unutilised credit accumulated prior to registration was not to be denied.

KLA Tencor Software India Pvt. Ltd. v. CST, Chennai-III 2016 (45) STR 242 (Tri. – Chen.)

Show Cause Notice

95. The Tribunal held that where the show-cause notice failed to allege the specific category of taxable services under which the assessee was liable to pay service tax, the impugned notice was vague and liable to be set aside.

Shumbam Electricals v. CCE – (2015) 40 STR 1034 (Tri. – Del.)

96. The Tribunal held that in terms of provisions of section 73(3) of FA, 1994, show cause notice was not required to be issued in cases where the assessee had deposited the entire amount of disputed tax under GTA Service and Management & Business Consultant Service from its CENVAT Credit balance and had also paid interest prior to issuance of SCN.

Thyssenkrupp Electrical Steel India Pvt. Ltd. v. CCE&C, Nashik 2016 (45) STR 99 (Tri. – Mum.)

Miscellaneous

97. The Tribunal held that where payments are made to overseas associated enterprises, the book entry crediting / debiting the associated enterprise would be relevant for ascertaining the due date for payment of service tax even if as per the mutual agreement, the payment is to be made at a later date.

General Motors I Pvt. Ltd. v. CCE – (2015) 40 STR 962 (Tri. – Mum.)

98. The Tribunal held that an amendment to a notification would only have prospective effect unless specifically made retrospectively by the appropriate authority and that no notification could be given retrospective effect by way of an executive instruction.

CCE v. Kay Trading – (2015) 40 STR 340 (Tri. – Del.)

99. The Tribunal held that where the assessee had inadvertently claimed CENVAT credit on input services along with the benefit of abatement under Notification No 1/ 2006 and subsequently reversed the CENVAT credit claimed at the appellate stage, thereby complying with the conditions of Notification No 1/ 2006, the benefit of abatement could not be denied.

Punj Llyod Ltd. v. CCE – (2015) 40 STR 1028 (Tri. – Del.)

100. The Court held that the power to arrest under sections 90 and 91 of the Finance Act, 1994 were to be used with circumspection and not casually and therefore, before exercising the power the DGCEI and Service Tax Department ought to have followed the procedure under Sections 73A(3) and 73(4) to establish that service tax had been collected but not deposited to the Government and it was not sufficient for the Department to proceed on the basis of presumption. The DGCEI ought to check if the assessee was a habitual offender or not before exercising such powers.

MakeMyTrip (India) Pvt. Ltd. v. UOI – (2016) 44 STR 481 (Del.)

101. The Court dismissed the challenge to constitutional validity of Section 113A(1) of the Finance Act, 2009 which held that job work / contract manufacturing of alcoholic liquor for human consumption was liable to service tax. It held that it was a tax on the service aspect of manufacture which was undertaken by one entity for another and therefore it was not a tax on manufacture per se.

Carlsberg India Pvt. Ltd. v. UOI – (2016) 44 STR 349 (Del.)

102. The Tribunal held that where trading was included as an exempt service vide notification 3/2011 dated 1-3-2011, since the trading in the instant case pertained to a period prior to April, 2011, the same could not be considered as an exempt service as prior to the notification it was to be treated as a taxable service.

Marudhan Motors v. CCE – 2016-TIOL-2576-CESTAT-DEL

103. The Court held that the condition in Notification 41 / 2007 – ST introduced by Notification No 3 / 2008 – ST viz. details of exporters invoice relating to export of goods should be mentioned in lorry receipt and corresponding shipping bill had to be complied with to ensure that what had reached the port was the actual consignment of exporter with no duplication of claim and since the availability of exemption depended upon fulfilment of the said condition, the condition could not be waived by considering it to be procedural.

Principal CST v. R.R. Global Enterprises Pvt. Ltd. 2016 (45) STR 5 (AP)

104. Where the assessee filed an application under the Voluntary Compliance Encouragement Scheme (‘VCES’) and made deposit of dues before the first due date for making 50 per cent initial deposit but failed to pay the entire due by the due date, which was subsequently paid along with interest, the Court held that the payment of 50 per cent of dues before the first due date was a mandatory requirement and the theory of substantial compliance could not be entertained in interpretation of a taxing statute (VCES). Accordingly, it dismissed the petition filed.

Manpreet Engineering & Const. Co. v. Union of India – (2016) 44 STR 384 (Jhar.)

105. The Tribunal held that there was no provision in VCES to condone delay in payment even if reason for such delay was found to be acceptable, as the time line prescribed under the VCES could not be extended.

Global Networking Resources v. Principal Commr., ST Pune 2016 (44) STR 94 (Tri. – Mum.)

106. The Court held that recovery of service tax under Section 87 of the Act could only be resorted to after the amount was adjudicated to be due to the Government, post providing the assessee an opportunity to be heard pursuant to the show-cause notice issued to it.

Gopal Builders v. DGCEI – (2015) 40 STR 888 (Guj.)

107. The High Court dismissed the petition filed by the petitioner requesting for the presence of a lawyer during the summons issued to him and held that the presence of lawyer in response to summons had no meaning as questions which were to be asked from persons summoned could not be asked from lawyer.

Sudhir Kumar Tripathi v. CCE&ST, Jamshedpur 2016 (44) STR 251 (Jhar.)

108. The Court held Notification Nos. 40/2007-ST and 41/2007-ST were base notifications and the list of services for which refund claim could be made were provided for by three separate notifications each of which were expressly prospective. Therefore, since the terms of notification ruled out that they were clarificatory, it rejected the assessee’s plea that subsequent notification applied from the date when base notification came into force.

Principal CST, Delhi-I v. T.T. Ltd. 2016 (45) STR 25 (Del.)

109. The Tribunal held that the Department was not permitted to change the classification of services at the service recipients end where the payment of service tax at the provider’s end was not disputed / denied by the Department

Newlight Hotels & Resorts Ltd. v. CCE&ST, Vadodara 2016 (44) STR 258 (Tri. – Ahmd.)

110. Where the assessee had adjusted excess service tax paid in the month of May against July’s liability without informing the department, the Tribunal held that adjustment of tax having been declared in ST-3 returns, intimation of such adjustment stood made to department. It further held that excess amount paid could not be deviated and permitted to be retained by Government merely due to procedural lapses by appellant.

Schwing Stetter (India) Pvt. Ltd. v. CCE, LTU, Chennai 2016 (45) STR 101 (Tri. – Chen.)

111. The Tribunal held that where removal of goods was for sale on Free on Road (‘FOR’) destination basis, with risk borne by manufacturer till the delivery to customer’s premises and when the composite value of sale includes value of freight from factory to customer’s premises, ‘place of removal’ would be the customer’s premises

Birla Corporation Ltd. v. CCE & ST, Lucknow 2016 (45) STR 103 (Tri. – All.)

*Assisted by CA. TUSHAR HATHIRAMANI