A] Classification of Service
Advertising Agency Service
1 The Revenue demanded tax on shooting of programmes prepared by advertising agency under Advertising Agency Service. The Hon’ble Tribunal held that, the assessee had obtained registration under Video Tape Production Service on which service tax liability was already discharged. The activity undertaken was not connected with preparation, display or exhibition of advertisement and therefore the same could not be classified as Advertising Agency Service.
CST, Mumbai v. Mad Entertainment Ltd. [2014] 36 STR 1162 (Tri.-Mumbai.)
Authorised Service Station Service
Uco Bank v. CST, Kolkata [2014] 36 STR 1169 (Tri.-Kolkata)
2 The petitioner challenged the constitutionality of levy of service tax on hire purchase and leasing transactions. The Hon’ble Kerala High Court held that the financier (petitioner) in addition to the interest and the principal amount of loan advanced by them, also collected certain service charges towards services rendered from the hire purchaser. While dismissing the petition the Hon’ble High Court, relying on the Hon’ble Supreme Court decision in BSNL (2001) 2 STR 161 (SC), held that sales tax could be levied on sale of goods involved in transaction and service tax could be levied on the service charges and thus, the levy of service tax on such transaction under the category of Banking and other financial services was held to be constitutional.
Kerala Non-Banking Finance Com. v. UOI (2015) 37 STR 41 (Ker.)
3 The appellant, who received brokerage from sale of RBI tax saving bonds, contended that as per RBI letter dated 28-10-2004, said bonds were issued under section 2(2) of Public Debt Act, 1944 which constituted government security issued for raising public loan and therefore no service tax liability arose on underwriting commission. The Hon’ble Tribunal held that, sale of RBI bonds amounted to a statutory function and therefore, could not be subjected to tax liability.
HDFC Bank Ltd. v. CST, Mumbai (2015) 37 STR 779 (Tri.-Mumbai)
Broadcasting Service
4 The Revenue had sought to tax the assessees (cable operators) on amounts by adopting the number of the subscribers given in the agreements entered into by the assessee with the broadcasters. The Hon’ble Tribunal held that once the figures were taken from a written contract, which was in pursuance to a statute, namely, Telecom Regulatory Authority of India Act, 1997 and the regulations made thereunder, the same was beyond challenge.
Intermedia Cable Communication P. Ltd. v. CCE (2014) 36 STR 1091 (Tri.-Mumbai)
Business Auxiliary Service
5 The Revenue had sought to tax the activity of laying of paver blocks at Port under Business Auxiliary Service (‘BAS’) as the said work was sub-contracted to the assessee. The Hon’ble Tribunal held that the said activity more appropriately fell under Commercial or Industrial Construction Service and not under BAS.
Conwood Pre Fab Ltd. v. CCE, Raigad [2014] 36 STR 1064 (Tri.-Mumbai.)
6 The appellant entered into an agreement with Maharashtra Knowledge Corporation Ltd. (“MKCL”), a company created by Government of Maharashtra for conducting certificate programme courses on Information Technology duly recognised by the State Technical Education Board. Scope of the activities included creation of authorised training centres, supervising the same, collection of course fee and remitting the same to MKCL. The Revenue contended that such activities were liable for service tax under ‘Business Auxiliary Service’ since it undertook promotion of business of MKCL. The Hon’ble Tribunal held that the activities were in the nature of incidental/auxiliary activities in relation to education and hence would be exempted from service tax under Notification No. 14/2004 – S.T. dated 10-9-2004.
Sun Beam Infocomm Pvt. Ltd. v. CCE (2015) 37 STR 129 (Tri.-Mum.)
7 The Hon’ble Tribunal held that the services of “processing of textile materials for chemical wash” to service providers situated outside India, were in relation to textile processing and were exempt from payment of service tax under Notification No. 14/2004- S.T. dated 10-9-2004. Accordingly, no service tax thereon was payable by the appellant under reverse charge basis.
K. G. Denim Ltd. v. CCE, Salem, 2015 (37) STR 140 (Tri.-Chennai)
8 An agreement between M/s. SKF, Sweden and SKF India, the appellant which provided for development, maintenance and installation of software systems by the foreign entity. Such agreement also included supply of information, data providing training etc. in the IT software field. The Hon’ble Tribunal held that the services were liable under the category of IT software services which was only w.e.f. 16th May 2008 and IT software services was specifically excluded from the scope of ‘business auxiliary service’. Hence the Revenue’s contention that the same was taxable under ‘Business Auxiliary Services’ was held as incorrect. Further, it was also held that the services were anyway not taxable under ‘Business Auxiliary Services’ as “customer care services” since in respect of customer care service, there would be three persons involved, the principal service provider, the customer and the intermediary in between who undertakes the service on behalf of the principal, the service provider. In the present case, on perusal of the agreement, it was held that there were only two parties involved, SKF Sweden and SKF India and there was no third party involved. Further, the service received by the appellant was for its own use and not for providing any service to any other party and therefore the same would not fall within the ambit of ‘customer care’. Further, on facts, the Hon’ble Tribunal also held that the various expenditures incurred by the appellant towards foreign currency purchase, professional management fees, group management programmes, engineering software services etc. did not fall under ‘Business Auxiliary Service’ or ‘Customer Care Service’.
SKF India Ltd. v. CCE (2015) 37 STR 245 (Tri.-Mum.)
9 The Hon’ble Tribunal in this case held that, activity of arranging visa was not covered under any clause of Business Auxiliary Services and therefore, activity was not taxable. Further it was held that, suo motu adjustment of service tax collected in respect of cancelled air ticket for discharge of service tax liability was permitted. It was also held that, no service tax was payable on cancellation charges on part of airfare received from person booking air tickets cancelled subsequently.
Globe Forex & Travels Ltd. v. CCE, Jaipur-I 2015 (37) STR 513 (Tri.-Del.)
10 The appellant in this case was engaged in sale of used / pre-owned vehicles belonging to client. The Hon’ble Tribunal observed that, the activity carried on was that of purchase and sale of old vehicles and refurbishing, repair and other activities were undertaken as value addition to get maximum returns and there was no element of service in the transaction.
Sai Service Station Ltd. v. CCEC & ST Kochi 2015 (37) STR 516 (Tri.-Bang.)
11 The Hon’ble Tribunal in this case held that, BAS and STC services provided by the assessee to its holding and affiliated companies abroad were nothing but services used outside India and therefore, it qualified as export of service.
CST, Mumbai v. Exxon Mobile Co. India Pvt. Ltd. [2015] 37 STR 591 (Tri.-Mumbai)
12 The appellant in this case received incentives and discount from Media companies. The Revenue alleged that it was liable to service tax under BAS as promotion of business of print/electronic media by canvassing/booking order on behalf of Media companies. The Hon’ble Tribunal held that, assessee was merely co-ordinating between media and advertiser and there was no contractual obligation for provision of service between both the parties, hence the amounts received were not liable to service tax under BAS.
Grey Worldwide (I) Pvt. Ltd. v. CST, Mumbai [2015] 37 STR 591 (Tri.-Mumbai)
13 The Hon’ble Tribunal in this case held that, process of chilling of milk to make it fit for long distance transportation without getting spoilt and which does not bring into existence any change, was not liable to service tax under BAS.
Sharma Ice Factory v. CCE, Jaipur-I 2015 (37) STR 660 (Tri.-Del.)
14 The appellant in this case rendered services in relation to procurement of goods to an American entity, which was not having any branch or project or business establishment in India. The Hon’ble Tribunal held that, services were covered by Rule 3(1)(iii) of ESR, 2005 as the same had been used by the American entity in relation to business located abroad. Therefore, services were to be treated as delivered and used outside India and since payment was received in convertible foreign exchange, it qualified as export of service.
GAP International Sourcing (India) Pvt. Ltd. v. CST, Delhi 2015 (37) STR 757 (Tri.-Del.)
15 The Revenue in this case contended that, joining by thermite welding of two pieces of rail at site for Railways was activity covered under production or processing of goods not amounting to manufacture and therefore, liable under BAS. The Hon’ble Tribunal held that, part of process of laying down of track making them fit for traffic movement do not result in any deliverable goods to railways and therefore no production or processing of goods take place and therefore not liable to service tax.
Harshad Thermic Industries (P) Ltd. v. CCE&C, Raipur 2015 (37) STR 808 (Tri.- Del.)
Business Support Services
16 The Revenue had sought to demand service tax on charges received by assessee allowing customers to use photocopier, printer etc. available in business centre. The Hon’ble Tribunal held that, in absence of any knowledge regarding purpose of usage of service, services received by customers could not be held as one of various services listed under support service of business or commerce. The Revenue was responsible to show occurrence of taxable event and service leviable to tax
Indian Hotels Co. Ltd. v. CST, Bengaluru [2014] 36 STR 1268 (Tri.-Bang.)
17 The Hon’ble Chennai Tribunal in this case held that ocean freight even if charged by a shipping logistic company was not liable to service tax.
APL Logistics India Pvt. Ltd. v. CCE (2014) 36 STR 1310 (Tri.-Chennai)
Cargo Handling Service
18 The appellant in this case was engaged in activities involving tipper loading, transportation and wagon loading of coal/mineral ore. The work orders prescribed for separate rates for tipper loading, transportation and unloading into railway wagons. Therefore, the appellant treated the contract as a separate contract under one instrument. The Hon’ble Tribunal held that, coal/mineral ore loaded and unloaded were meant for transportation and therefore, the entire activity was to be treated as Cargo Handling Service. However, amount charged for transportation, was not chargeable to service tax as even if the activity was treated as GTA service, liability to pay service tax was on recipient of service. Since, the issue was under dispute before various Tribunals, it was held that longer period of limitation could not be invoked.
Jai Jawan Coal Carriers Pvt. Ltd. v. CST, New Delhi 2015 (37) STR 509 (Tri.-Del.)
Chartered Accountant Service
19 The Hon’ble High Court held that, billing activity undertaken at the behest of chartered accountant was not liable under CA service as CA themselves do not prepare bills or vouchers and it was done by ministerial staff and clerks. Therefore, said activity was not liable to service tax under CA Service.
CCCE & ST v. Magham Pullaiah [2014] 36 STR 1257 (AP)
Clearing & Forwarding Agent Service
20 The assessee was engaged in sale of product supplied by principal in smaller lots to customers at prices fixed by the principal by issuing invoices in the name of principal. The Hon’ble Tribunal held that the main activity of C&F Agent was receipt of dispatch orders from principal and arrangement for clearance of goods in terms of direction. Since the assessee had permission to sell goods in smaller lots was indicative of the fact that assessee was not working as C&F Agent of principal.
B. K. Sales Corporation v. CCE, Rohtak [2014] 36 STR 1281 (Tri.-Del.)
21 The Hon’ble Tribunal held that the sales representatives, appointed by the assessee were only canvassing orders and pursuing the delivery of goods for a commission and they were neither receiving nor clearing and forwarding the goods manufactured by their principals and hence, such activity could not fall within the ambit of clearing and forwarding agent service.
CCE v. Hoganas India Ltd. (2015) 37 STR 240 (Tri.-Mum.)
Commercial or Industrial Construction Service
22 The assessee’s service of laying long distance pipeline /conduit for Gujarat Industrial Development Corporation was held to be for commercial or industrial purpose and accordingly was held liable for Service Tax under the category of ‘commercial or industrial construction services’
Graphite India Ltd. v. CCE [2014] 36 STR 948 (Tri.-Mumbai)
23 The assessee in this case provided services in the nature of storage and warehousing of export cargo in addition to normal cargo handling. It classified the same as Cargo Handling Service for export. The Hon’ble Tribunal held that storage and warehousing of goods was a separate activity in itself and did not form part of cargo handling service. Further, there was no evidence that storage and warehousing was a statutory requirement under any law governing container freight stations and the assessee provided the said service to selected customers on collection of separate charges. Hence, the classification under cargo handling service was not justified. It was also held that, assessee was operating under self-assessment regime and if there was any material change in nature of terms and conditions of transaction, the same should have been brought to the notice of Revenue, which was not done, hence extended period of limitation was invocable.
CCE, Raigad v. Maersk India Pvt. Ltd. 2015 (37) STR 555 (Tri.-Mumbai)
24 The appellant provided CIC services relating to transmission of electricity to various companies and claimed exemption under notification 45/2010-ST. The Hon’ble Tribunal held that, expression ‘relating to’ under Notification No. 45/2010-ST was of very wide amplitude and scope and all taxable services rendered in relation to transmission/distribution of electricity would be eligible for benefit of exemption under the said notification for the period prior to 27-2-2010. It was further held that, definition of transmission given in Electricity Act, 2003 covers very wide gamut of activities including sub-station and equipments.
Kedar Constructions v. CCE, Kolhapur 2015 (37) STR 631 (Tri.-Mumbai)
25 The Hon’ble Tribunal held that, if the service tax liability stood discharged on full and complete value by the main contractor, the sub-contractor could not be taxed again in respect of same services on that part of value of the services provided by them as it would amount to double taxation.
DNS Contractor v. CCE, Delhi-I 2015 (37) STR 848 (Tri.-Del.)
26 In this case the appellant, constructed onshore Transport Terminal for loading of natural gas extracted from various wells, transported through pipe and it also had centralized control room, and facilities like workshop, lounge, guesthouse, helipad etc. The Hon’ble Tribunal held that, there was no arrival from different destination and dispersal to different destination and only one item gas was transported in unidirectional and fixed manner. The said onshore terminal was not a transport terminal similar to air, sea or road. Transport terminal had to be given a commonly understood meaning since it was preceded by the words airport, railways etc. and it would only imply similar things like bus and truck terminals.
Afcons Infrastructure Ltd. v. CST, Mumbai-I 2015 (37) STR 850 (Tri.- Mumbai)
Commercial Training & Coaching Centre Service
27 The appellant in this case imparted training recognized by State Board of Vocation Examination. The Hon’ble Tribunal held that the assessee was providing training (recognized by Board) but certificates were issued by Board, therefore the appellant provided taxable services and hence was liable to pay service tax. The Hon’ble Tribunal set aside penalties in view of bona fide belief of non-taxability.
Opportunities India Solutions Pvt. Ltd. v. CST, Mumbai 2015 (37) STR 520 (Tri.-Mumbai)
Consultancy Engineer Service
28 The assessee had obtained technical know-how and consultancy services from abroad and paid royalty on such services and on such services, Revenue demanded service tax by invoking Rule 6 of the Service Tax Rules, 1994 as it stood then (which stated that in respect of services provided by non-resident in India, the service tax thereon shall be paid by any person in India authorised by such non-resident). The Hon’ble Tribunal held that supply of technical know-how and payment of royalty thereon did not fall under the taxable category of ‘Consultancy Engineer Service’. Further, the overseas service provider had not authorised the assessee to pay service tax on its behalf. The services were received from abroad which would be taxable only w.e.f. 18-4-2006 i.e. after enactment of section 66A which enabled the Government to levy service tax on such services under reverse charge basis, and not prior to that date.
CCE & Cus v. L&T Ltd. (2015) 37 STR 156 (Tri.-Mum.)
Management Consultancy Services
29 The Hon’ble Tribunal held that no service tax was payable on the activities of developing, operating and managing the business of the hotel during the process of acquisition of the hotel on the basis that the assessee was not running the hotel as a service provider but was a co-owner of the assets of the hotel. Mere holding of joint discussions and reporting of activities to the hotel doesn’t mean service was being provided. The meaning of the expression ‘services in connection with management of any organisation’ in terms of the definition of ‘management or business consultant’ was restricted only to services in relation to consultancy or advisory and not in relation to actual performance of the management.
The Indian Hotels Co. Ltd v. Commissioner of Service Tax [TS- 666-Tribunal-2014-ST]
30 The assessee was engaged in plastering of walls, tiling of floors, carpentry work etc. The Hon’ble Tribunal held that, as per definition under section 65(25b) of FA, 1994 activity undertaken on existing building amounted to renovation or restoration or alteration or repair. To attract clause (c) of section 65(25b) activity was to be undertaken on new or unfinished building. The work undertaken by the assessee merits classification under section 65(25b)(d) and therefore benefit of Notification No. 1/2006-ST was available upon satisfaction that activities pertaining to existing building or civil structure.
The Surindra v. CCE&ST, Pune-III/ Mumbai-II. [2014] 36 STR 1137 (Tri.-Mumbai)
31 “Support services” provided by the assessee to run the business of their clients by providing marketing assistance, obtaining loans from financial institutions, liaisoning with the Government Agencies for getting various permissions, training of their personnel and so on were held as support services for the business and did not involve ‘consultancy and advice’. Hence, it was held that the assessee was not liable under “Management Consultancy Service” prior to 1-7-2003.
Tata Autocomp Systems Ltd. v. CCE, Pune [2015] 37 STR 252 (Tri.-Mum.)
Management, Maintenance and Repair Service
32 The assessee in this case utilised excise duty/ VAT paid goods and materials for repair of transformers and separately disclosed in agreement and mentioned in Invoices also. The Hon’ble High Court held that, service tax could not be demanded on component representing value of goods and materials used for carrying out repairs. It also held that, mere fact that cost of various items was shown for purpose of price variation, could not make any difference to legal position.
CC&CE v. J. P. Transformers [2014] 36 STR 961 (All.)
33 The Revenue had sought to tax services charges collected by the assessee for maintaining road, street lights etc. under MMR service. The Hon’ble Tribunal held that, assessee was discharging statutory function governed by MID Act and rules framed thereunder. The service charges was collected for performing activity in the nature of compulsory/statutory levy and not in nature of any service to any particular individual or for any consideration. Therefore, activity carried out by the assessee was not covered under MMR Service.
MIDC v. CCE, Nashik [2014] 36 STR 1281 (Tri.-Del.)
Manpower Recruitment or Supply Agency Service
34 The assessee hired certain expatriate employees from its group companies situated outside India and had paid salaries and other statutory social security benefits such as provident fund to these employees. It had also remitted to its group companies certain amounts that were payable by the group companies to the account of the expatriate employees under the foreign laws. The Revenue had sought to demand service tax from the assessee on the grounds that it received Manpower Recruitment or Supply Agency Services from the overseas companies. On appeal, the Hon’ble High Court held that no service tax could be demanded from the assessee under the category of Manpower Recruitment or Supply Agency Services in absence of the essential requirement to levy service tax under the category of Manpower Recruitment or Supply Agency Services viz.,
• There has to be a service provided to any person;
• The service has to be provided by a manpower, recruitment or supply agency;
• The service must be in relation to recruitment or supply of manpower, temporary or otherwise.
CCE v. Computer Sciences Corporation India P. Ltd. (2015) 37 STR 62 (All.)
Programme Producers Service
35 The Hon’ble Tribunal held that recording of cricket match images for and on behalf of the appellant by non-resident service provider was liable to service tax under Programme Producer service and the appellant was liable to pay service tax under Reverse Charge Mechanism. It was further held that, booking of hotel accommodation and transport of personnel in connection with recording of cricket matches was covered under Business Support Service.
BCCI v. CST Mumbai-I 2015 (37) STR 785 (Tri.-Mumbai)
Real Estate Agent Services
36 The assessee (M/s SRL) was engaged in acquiring/obtaining lease land suitable for wind farm project identified by its associate company SEL and subsequently selling or sub-leasing the lands to the customers of SEL who would put up wind turbine generators on the said land. The agreement between the assessee and SEL mentioned that on sale/sub-lease of land by SRL to the customers of SEL, SRL would recover the cost of acquisition of land and the incidental expenses incurred by it along with commission of 11% on cost, which in fact was the profit that would be earned by SRL on sale/sub-lease. The Revenue had sought to tax the said commission on the ground that the assessee had rendered Real Estate Agent Services to SEL. On appeal, the Hon’ble Tribunal observed that since the land was purchased by the assessee in its own name and all the incidental cost thereof was also borne by it and subsequently the same was also sold/leased by it to the customer of SEL on which account it earned profit, the assessee was carrying out buying and selling of land and had not rendered any real estate agent services to SEL. Hence no service tax was payable by it on the profits earned by it under the category of real estate agent’s services
Sarjan Realties Ltd. v. CCE [2014] 36 STR 877 (Tri.-Mum.)
Rent-a-Cab Service
37 The issue was whether renting of metered cabs falls under the taxable category of ‘Rent-a-cab service’ under the erstwhile service tax regime. The Hon’ble High Court held that renting was different from hiring. Under hiring of cabs, the owner (who may or may not be the driver) retained control and possession of vehicle with himself. The customer had to merely use the cab and pay the metered charges (collected on the basis of the number of kilometres travelled). However, on the contrary, renting of cabs involved transfer of control and possession of the vehicle by the owner to the person renting such cab. The assessee continued to retain control and possession of the vehicle with himself. Therefore, it was not liable to pay service tax.
Commissioner of Customs & Central Excise v. Sachin Malhotra, Raj Kumar Taneja and M/s. Shiva Travels [2014-TIOL-2039-HC-UKHAND-ST]
Renting of Immovable Property
38 The Hon’ble Tribunal held that returnable security deposit, collected at the time of renting of immovable property could not be considered as a part of consideration for service and hence no service tax would be payable on such security deposits. Further, it also held that where the rent agreement clearly stipulated that the service tax would be recovered separately in addition to rent, the contention of the appellant that the benefit of cum-tax value should be given in respect actual rent received by it was not sustainable. However, penalty was not imposed by the Hon’ble Tribunal since the assessee had paid tax on cum-tax value basis.
Samir Rajendra Shah v. CCE (2015) 37 STR 154 (Tri.-Mum.)
39 The Revenue in this case demanded service tax on notional interest on security deposit. The Hon’ble Tribunal held that, security deposits had been taken to provide security in case of default in rent by lessee or default in payment of utility charges or for damages caused to the property. In absence of any provision in law for providing notional addition to value/price charged, question of addition of notional interest on security deposit as consideration received for services rendered could not be sustained. Further, in absence of evidence showing security deposit influencing price i.e. rent, it was held that impugned amount could not form part of rent. Also there was no reason for adopting @ 18% p.a. as rate of interest as same was neither bank rate of interest for deposits or loans nor market rate of interest and adoption of arbitrary rate militates against concept of valuation.
Murli Realtors Pvt. Ltd. v. CCE, Pune-III 2015 (37) STR 618 (Tri.-Mumbai)
Restaurant Service
40 The Division Bench of Hon’ble High Court upholding single judge decision held that, it was beyond legislative competence of Central Government to impose service tax on Restaurant Service as it relates to supply of food and other consumables in restaurant. After Constitution (46th Amendment) Act, it was deemed as sale of goods, and could not be said to be service. Tax on the same could be imposed only by States under Entry 54 of List II of VII Schedule. In view of Article 366(29A)(f) of Constitution of India, bill raised on customer has to be for whole amount of consideration received by restaurant owner, and could not be split as charge for food parts and service, even though restaurant owner may have provided goods furniture, furnishings and fixtures, linen, crockery and cutlery, music etc.
It was further held that, “Luxuries” in Entry 62 of List II means activity of enjoyment of or indulgence in that which was costly or which was generally recognised as being beyond necessary requirement of average member of society and same was beyond legislative competence of Union to impose tax as same was related to Entry 62 of List II of VII Schedule and States alone had legislative competence to enact any law imposing tax on it.
UOI v. Kerala Bar Hotels Association [2014] 36 STR 1205 (Ker.)
Service tax on lottery
41 In a writ challenging the demand of service tax post 1-7-2012 u/r. 6(7C) of Service Tax Rules from the assessee who was engaged in the business of acting as a sole purchaser of lottery tickets issued by the Government of Sikkim at discounted price and selling them to the customers through its agents and stockists, the Hon’ble High Court held that lottery being an actionable claim would be excluded from the definition of service. In any event the service of betting, gambling or lottery was included in the negative list. Further the assessee was not acting as an agent of the Government in selling and promoting the lottery tickets but it was buying and selling transaction. Lottery being a scheme for distribution of prizes by lot or chance, there was no element of service in a lottery
Future Gaming Solutions India Pvt. Ltd. v. UOI [2014] 36 STR 733 (Sikkim)
42 The petitioner, in a writ, challenged the constitutional validity of section 65(105)(zzzzn) which sought to levy service tax on the activities of promotion, marketing, organising or in any other manner assisting in organizing game of chance including lottery w.e.f. 1-7-2010 on the grounds that the petitioner was carrying out the activities of purchase and sale of lottery tickets and that only the State Government had the power to impose tax on betting and gambling activities. The Hon’ble High Court while allowing the writ petition held that the activities carried out by petitioners did not constitute a service since the petitioner was merely engaged in purchase and sale of lottery tickets and it did not render any service to Government in consideration of which it received any amount from the Government. It further held that ‘Lottery’ being an activity in the nature of ‘betting and gambling’ was covered under the Entries 34 and 62 of List II of the Seventh Schedule of the Constitution (State List), taxes in respect of such activities could be levied only by the State Government. The residuary power of the Central Government under Entry No. 97 of List I of the said Schedule permitted levy of service tax only in those cases where the power to tax was not traceable to any entries in the Lists II and III of the said Schedule. Since, the power to levy tax on betting and gambling was covered under the State List, the said clause (zzzzn) of s. 65(105) of the Act was ultra vires the Constitution and hence was liable to be struck down.
Future Gaming Solutions India Pvt. Ltd. v. UOI (2015) 37 STR 65 (Sikkim)
43 Lottery being an actionable claim would be excluded from the definition of service. Also the service of betting, gambling or lottery was included in the negative list and therefore transaction in the lottery tickets was not liable to service tax under the provisions of Finance Act, 1994.
Tashi De Lek Gaming Solutions Pvt. Ltd. v. UOI [2014] 36 STR 964 (Sikkim) applying Future Gaming Solutions India Pvt. Ltd. vs. UOI [2014] 36 STR 733 (Sikkim)
Site Formation and Clearance, Excavation and Earthmoving and Demolition Service
44 Activities of reclamation of land by constructing diaphragm wall, anchor slab and retention wall along with the banks of the river were in the nature of Site Formation and Clearance, Excavation and Earthmoving and Demolition Service. However, since the activities were in relation to a river (i.e. a water body) it would be specifically excluded from the definition “Site Formation and Clearance, Excavation and Earthmoving and Demolition Service”.
ITD Cementation India Ltd. v. CST [2014] 36 STR 897 (Tri.-Mum.)
Stock Broking Services
45 Delayed payment charges recovered by stock broker from its customers for delaying its payments by debiting the running account after raising separate debit notes could not be a consideration received for providing stock broking services and accordingly it was not liable for service tax under the said category.
Religare Securities v. CST [2014] 36 STR 937 (Tri.- Del.)
Storage & Warehousing Service
46 The assessee supplied various gas and storage tanks to hospital. The Revenue sought to tax the said activity under Storage & Warehousing Service. The Hon’ble Tribunal observed that, hospital was responsible for maintenance of tanks and regular inspection as per provisions of Explosives Act and held that, gas was stored in tanks sold to hospital and in custody or control of hospital, hence assessee could not be treated as storage or warehouse keeper.
CCE, Ghaziabad v. Goyal M. G. Gases (Pvt.) Ltd. [2014] 36 STR 1165 (Tri.-Del.)
Tangible Goods Supply Service
47 The appellant in this case was engaged in hire of drilling unit on time charter basis. The drilling rig along with personnel to operate the same were taken on charter hire basis and payment for the service rendered was made on per day basis. The Hon’ble Tribunal held that, appellant had possession and effective control of the drilling rig and since both service provider and receiver were in India, the place of provision of service was in India. Merely because the oil rigs were deployed outside the Indian territorial waters but within the exclusive economic zone of India, it could not be said that services were provided outside India. Further, the service provided was in the nature of composite service consisting of SOTG service and mining service. However, essential character was that of SOTG service, since 95% consideration was for supply of tangible goods and services in the nature of mining operations accounted only for about 5% of consideration received. It was further held that, though at the relevant time, there was no specific rule relating to place of provision of service one could usefully and gainfully adopt the provisions of PPSR, 2012 which was an internationally accepted concept in the matter of services.
Greatship (India) Ltd. v. CST, Mumbai-I [2015] 37 STR 533 (Tri.-Mumbai)
Transmission of Electricity
48 Services in relation to construction of civil structures to facilitate erection of electricity transmission tower was exempt under Notification No. 45/2010-S.T dated 20-7-2010 which exempted all taxable services relating to transmission and distribution of electricity.
M. Chadsacharam v. CCE (2015) 37 STR 268 (Tri.-Chennai)
Works Contract
49 The appellant was prior to 7-7-2009 awarded two types of contracts from Power Grid Corporation of India Ltd., one for supply of towers (which was treated as sale not liable to service tax) and the other for erection and installation (on which service tax was paid under Works Contract Composition Scheme, 2007 on the contract for erection and installation). The Revenue took a stand that both the contracts were a single contract and the contract for erection and installation was not a works contract but a labour contract since the materials get consumed. The Hon’ble Tribunal held that the nature of contract involved supply of material as well as labour and the appellant had paid sales tax/VAT on the material involved in the erection and installation contract and hence, it was held as a works contract. It also held that the value of transmission towers could not be included in the value of erection and commissioning contracts by virtue of the Explanation inserted w.e.f. 7-7-2009 since the contracts commenced prior to 7-7-2009 and by virtue of the proviso to the Explanation such an inclusion could not be made.
Gammon India Ltd. v. CCE&ST (2015) 37 STR 225 (Tri.-Mum.)
B] VALUATION
50 The Hon’ble Tribunal held that the deduction made under Notification No.12/2003 could not be given based on purely overall estimation/approximation but if documentary proof specifically indicating the value of goods and services were provided, the deduction was allowable.
Kalpik Interiors v. CST (2014) 36 STR 1283 (Tri.-Delhi)
51 The Hon’ble Tribunal held that since the assessee engaged in carrying out the activities of retreading of tyres had excluded the cost of rubber utilised towards retreading of tyres without indicating the value of such materials actually sold by it in its invoices and that in absence of any documentary proof specifically indicating the value of material sold, the assessee was not entitled to benefit of Notification No. 12/2003-S.T. However, on facts during the impugned period since a similar matter was pending before the Third Member on account of difference of opinion, the Hon’ble Tribunal held that no penalty would be imposable in view of the provision of section 80.
CCE v. New Hindustan Rubber Works (2015) 37 STR 120 (Tri.-Mum.)
52 The issue was whether transformer oil, HV / LV coil and spare parts which were goods used for repair of transformers belonging to the customer could be included for the purpose of quantifying the gross consideration received as constituting taxable value. The Hon’ble High Court held that since the agreement between the assessee and its customers incorporated separately the value of materials from the value of service rendered, the value of the materials or goods would have to be excluded since that component was not liable to service tax.
CCE v. Goverdhan Transformer Udyog Pvt. Ltd. (2015) 37 STR 161 (All.)
C] CENVAT CREDIT
53 The assessee utilised CENVAT credit at registered office without distribution to various units and also not registered themselves as ISD. They had contended that if they have properly distributed the credit, they would have utilised it fully. The Hon’ble High Court held that, it was case of procedural irregularities and revenue neutrality which was required to be considered sympathetically. As there was no fraud or collusion or wilful misstatement or suppression of facts or contravention of statutory provision with intent to evade payment of duty, penalty was not sustainable.
CCE vs. Chandresh Shah [2014] 36 STR 972 (Guj.)
54 Service related to advice and consultancy in the form of sales, planning, marketing, management, human resource, financial planning and analysis, logistic management, customer services, operation management, tax consultancy were more appropriately classifiable under the category of ‘consultancy services’ and not under the category of ‘Business support service’ and such services received by the assessee from abroad, it was rightly entitled to avail 100% CENVAT credit of the service tax paid on those services and was not required to reverse any portion thereof as attributable to exempt services provided by it since the services being in the nature of management consultancy services were covered under Rule 6(5) of the CENVAT Credit Rules, 2004.
Federal Express Corporation v. CST (2014) 36 STR 375 (Tri.-Mum.)
55 Where the assessee had taken CENVAT credit on rent paid for its premises used for storage of its records and also of the input services used at such premises, the Hon’ble Tribunal held that since the premises were not registered with service tax authorities as a service provider or as input service distributor, availment of CENVAT credit on such input services was not permissible
Market Creators Ltd v. CST (2014)36 STR 386 (Tri.-Ahmd.)
56 Expenses incurred on fumigation of containers used for export of goods in compliance with the requirement of international regulation of packing prepared by ‘International Plant Protection Convention’ were in the nature of packing expenses and hence credit of service tax paid thereon was allowable under the CENVAT Credit Rules, 2004.
Venus Wire Industries Pvt. Ltd. v. CCE (2014) 36 STR 475 (Tri.-Mum.)
57 Commission paid for selling activity was part of sales promotion and credit was admissible under the broad category of sales promotion – specifically covered in definition of input services.
CCE v. Remi Metals Gujarat Ltd., (2014) 36 STR 158 (Tri.-Ahmd.)
58 The Hon’ble Tribunal allowed CENVAT credit of service tax paid on Clearing service, legal service and event management service used for celebration of annual day and honouring outstanding employees by way of rewarding and entertaining them to encourage in general for better performance.
Delphi Automotive System P. Ltd. v. CC, CE&ST Noida [2014] 36 STR 1089 (Tri.-Del.)
59 The assessee claimed CENVAT credit of service tax paid on event management service organised at temple to facilitate organisation of dealer/retailer meet for promotion, marketing, advertising and promotion of assessee’s products. The Revenue denied the credit by observing that temple premises were used only for religious function and for no other social activity. The Hon’ble Tribunal held that, it was well established by contemporaneous social evidence that temple premises were employed for a variety of social functions including marriages, hence impugned order denying credit was not sustainable.
Shree Cement Ltd. v. CCE&ST, Jaipur-II [2014] 36 STR 1107 (Tri-Del.)
60 The Hon’ble Tribunal allowed CENVAT credit on following services:
• As number of factory workers were more than 250 and it being mandatory to provide canteen facility to workers, credit was admissible for outdoor catering service.
• Maintenance of lawns and gardens were essential as per condition imposed by Pollution Control Board for operating factory.
• Cycle stand was a necessary requirement in factory.
• Maintenance of guest house a necessary business requirement as factory located outside city boundaries.
DCM Shriram Consolidated Ltd. v. CCE, Jaipur-I [2014] 36 STR 1120 (Tri.-Del.)
61 The Hon’ble Tribunal held that, final product if being cleared either under specific rate of duty or in terms of MRP declarations as per section 4A of CEA, 1944, ‘Place of removal’ would be factory gate, hence Cenvat credit of service tax paid on courier service from and/or up to factory gate was not available. It further held that, since assessee was regularly filing statutory returns regarding utilization of Cenvat credit of service tax paid on courier service, suppression of facts with intent to evade payment of duty could not be alleged.
Hero Motocorp Ltd. v. CCE, Delhi-III [2014] 36 STR 1128 (Tri-Del.)
62 The Hon’ble High Court held that obligation to run canteen under Factories Act was neither necessary nor that number of employees required exceeded 250. The canteen was run for welfare of employees so that they get best foods and were able to perform well in factory premises which had direct nexus with production of goods. Hence, Cenvat credit availed on outdoor catering service was admissible.
Resil Chemicals Pvt. Ltd. v. CCE, Bengaluru [2014] 36 STR 1260 (Kar.)
63 The assessee availed Cenvat credit on services of overseas commission agent for procuring orders for goods manufactured by 100% EOU but distributed to DTA unit. The Hon’ble Tribunal held that, HO as ISD required to pay service tax on these input service on discharge of service tax liability arising under RCM and prior to insertion of clause (c) in rule 7 of CCR, 2004, there was no bar on ISD to distribute credit pertaining to one unit to another unit.
Praj Industries Ltd. v. CCE, Pune-III [2014] 36 STR 1273 (Tri-Mumbai.)
64 CENVAT credit on insurance services i.e. group accident & group medical policy for employees was allowable
CST v. Team Lease Services Pvt. Ltd. [2014] 36 STR 543 (Kar.) relying on Stanzen Toyotetsu India (P) Ltd. [2011] 23 STR 444 (Kar.)
65 CENVAT credit could be taken on Goods Transport Agency services and Business Auxiliary Services by a job-worker who cleared excisable goods to a manufacturer who paid duty on the goods even though the job-worker neither paid duty nor service tax.
Western India Forging P. Ltd. v. CCE 2014 (36) STR 637 (Tri.-Mum.) where assessee referred to Sterlite Industries (I) Ltd. v. CCE (2005) 183 ELT 353 (Tri.-LB)
66 Insurance of workers in the factory has an integral connection with the manufacture and hence cenvat credit was allowable.
Binani Cement Ltd. v. CCE & ST (2014) 36 STR 676 (Tri.-Del.)
67 CENVAT credit on capital goods and input services used for setting up a factory was allowable and could not be denied for want of registration.
Beico Industries Pvt. Ltd. v. CCE&ST [2014] 36 STR 551 (Tri.-Ahmd.)
68 Where the assessee manufactured and installed diesel sets for their clients and also provided warranty, it was held that repair services availed by the assessee for repairing the diesel sets of its customers during the warranty period was an input service and credit of service tax paid on such services was admissible
Gujarat Forging Ltd. v. CCE [2014] 36 STR 677 (Tri.-Ahmd.)
69 Photostat services being necessary input service CENVAT credit was admissible.
Punjab Alkalies & Chemicals Ltd. v. CCE&ST [2014] 36 STR 688 (Tri.-Del.)
70 Credit of service tax availed by an insurance company on Reinsurance services was admissible since –
• Reinsuring a specified percentage of sum assured with another insurance company was a statutory obligation under the Insurance Act, 1938;
• Reinsurance being co-terminus with the insurance policy it had to be considered as having a nexus with the output service of insurance.
PNB Metlife India Insurance Co. Ltd. v. CST [2014] 36 STR 891 (Tri.- Bang.)
71 CENVAT Credit on clearing charges paid to Customs House Agent by a manufacturer for clearing his export goods [where place of removal was the port] was admissible. Credit of service tax paid on Commission Agent’s Services, Material Handling Charges, Terminal Handling Charges, Bank Commission Charges, Aviation Charges and Courier Services by a manufacturer in the course of its business activity was admissible.
JSW Steel Ltd. v. CCE [2014] 36 STR 801 (Tri.-Mumbai) see also Jotindra Steel and Tubes Ltd. vs. CCE [2014] 36 STR 672 (Tribunal)
72 Where the assessee’s head office was discharging the entire service tax liability including the liability of its branch office, the denial of credit on input services invoices which was received and addressed to its branch office was held to be incorrect especially where the assessee had produced a certificate from the service provider clarifying that address in the invoice may be read as addressed to the assessee’s head office.
Rajasthan Diesel Sales & Services v. CCE [2014] 36 STR 832 (Tri.-Del.)
73 CENVAT credit on lift/air conditioner maintenance, renting of cafeteria area, sale of foreign currency was allowable.
CST vs. Verizon Data Services (I) (P) Ltd. [2014] 36 STR 846 (Tri.-Chennai)].
74 Where the revenue had sought to deny credit of service tax paid on broadcasting services availed by the assessee on the grounds that the broadcasting company were engaged by the advertising agency appointed by the assessee and the payment of the services were also made by the advertising agency, the Hon’ble Tribunal observed that the invoices of Broadcasting company clearly mentioned assessee as the advertiser and the advertising agency acted on behalf of the assessee and also that in the subsequent period the Commissioner has allowed the CENVAT Credit on broadcasting and hence the Hon’ble Tribunal held that CENVAT credit thereon was admissible to the assessee
Indian Oil Corporation Ltd. v. CCE [2014] 36 STR 833 (Tri.-Del.)
75 The issue was whether CENVAT credit, with respect to cost borne by the company for provision of outdoor catering services to its employees, would be eligible. The Hon’ble Tribunal on the basis of the following observations held that CENVAT credit on such outdoor catering would be eligible:
• ‘Outdoor catering’ per se was eligible input service but it was not eligible for credit only when it was used for personal use or consumption of any employee.
• Employees have used these services during normal business hours only and cost of such services were borne by the company and not recovered from employees.
• Cost of such input services forms part of the cost of final product
Hindustan Coca Cola Beverages Pvt Ltd. v. CCE [2014-TIOL- 2460-CESTAT-MUM]
76 Credit of service tax paid on cargo handling services utilised for the export of final product from the place of removal (port in this case and not the factory gate) till the goods left India from the port was admissible as being a service in relation to ‘clearance of final product from the place of removal’.
Central Excise v. Inductotherm India P. Ltd. [2014] 36 STR 994 (Guj.)
77 CENVAT credit in respect of housekeeping/cleaning services, legal services and event management services [event for honouring outstanding employees] was admissible.
Delphi Automobile System Pvt. Ltd. v. CCCE&ST [2014] 36 STR 1089 (Tri.-Del.)
78 The Revenue in this case disallowed CENVAT credit on the ground that assessee did not clear goods in terms of invoices which were later on cancelled. The Hon’ble Tribunal held that, there was no provision in law in relation to CENVAT credit which provided for proportionate disallowance of CENVAT credit since no one to one correlation of input and output had to be established in order to claim CENVAT credit. It also held that, CENVAT credit of pandal and shamiana service availed to preserve raw material was admissible and disallowance could not be upheld when the same was done on mere suspicion or assumption.
CCE, Raipur v. SKS Ispat & Power Ltd. 2015 (37) STR 485 (Tri.-Del.)
79 The assessee in this case provided passive telecom infrastructure. It was taxable under BAS. The Revenue denied CENVAT credit on parts of Towers, BTS Cabins, etc. by placing reliance heavily on definition of ‘input service’ under rule 2(k)(i) of CCR, 2004 and explanation thereunder. The Hon’ble Tribunal held that, assessee was providing output service therefore Rule 2(k)(ii) was relevant to the facts of the case and Towers/BTS cabins undisputedly were utilized for providing BAS and therefore credit could not be denied. Further, the Hon’ble Tribunal distinguished the judgment of Bharti Airtel Ltd. 2013 (29) STR 401 (T) on the ground that facts were totally different. It was further held that, reversal of wrong CENVAT credit before utilization did not attract interest liability.
GTL Infrastructure Ltd. v. CST, Mumbai 2015 (37) STR 577 (Tri.-Del.)
80 The Hon’ble Tribunal in this case allowed CENVAT credit on insurance of plant & machinery, goods in transit, cash in transit and insurance of vehicles and laptops by holding that it formed an integral part of manufacturing business and therefore, it was to be treated as input service in terms of rule 2(l) of CCR, 2004 as applicable prior to its amendment on 1-4-2011.
Hindustan Zinc Ltd. v. CCE, Jaipur 2015 (37) STR 608 (Tri.-Del.)
81 The Hon’ble Tribunal in this case allowed CENVAT credit of service tax paid on transit insurance meant for risk over of transportation of goods on the ground that once the insurance cover was inseparable from the risk covered by it then CENVAT claimed was undeniable.
Modern Insulators Ltd. v. CCE, Jaipur-II 2015 (37) STR 625 (Tri.-Del.)
82 The Hon’ble High Court in this case allowed CENVAT credit on subscription for International Taxation for providing information and knowledge pertaining to International Taxation for tax compliance, legal & consultancy service in relation to filing of tax return in US, medical group insurance for employees and outdoor catering services except for consumption of alcoholic beverages.
CCE v. HCL Technologies 2015 (37) STR 716 (All.)
83 In this case, the appellant was factually able to prove from letters written by two agent that besides sales promotion the said agents also helped in selling of products, in canvassing business, in making their network available for expanding business and for procurement of orders. Based on the said evidences, the Hon’ble Tribunal held that such activity could be treated as sales promotion and therefore, eligible for credit.
Bhuruka Gases Ltd. v. CCE, C&ST, Bengaluru-I (2015) 37 STR 818 (Tri.- Bang.)
Interest on CENVAT credit
84 Interest was not chargeable when CENVAT credit wrongly taken was reversed before utilisation.
Gurmehar Construction v. CCE [2014] 36 STR 545(Tri.- Del.)
85 CENVAT credit was allowed in the following cases –
• Outdoor catering services since providing of canteen facility for the factory workers was mandatory
• Maintenance of lawns and gardens – since condition imposed by Pollution Board
• Maintenance of cycle stand – necessary requirement
• Maintenance of guest house – Adjacent to factory premises – Necessary business requirement as factory was outside city limits
DCM Shriram Consolidated Ltd. v. CCE [2014] 36 STR 1120 (Tri.-Del.)
86 TR6 challan representing credit of service tax paid under reverse charge admissible if paid after detection by the Revenue since such disallowance was applicable only post 1-4-2011 vide Notification No. 13/2011
CCE v. Sakthi Sugars Ltd. [2014] 36 STR 1125 (Tri.-Chennai)
87 Goods which were cleared under specific rate of duty or in terms of MRP declaration the place of removal was factory and CENVAT credit on service tax paid on courier services for despatch of their goods to the customers from the factory was not admissible.
Hero Motorcorp Ltd. v. CCE [2014] 36 STR 1128 (Tri.-Del.)
88 CENVAT credit on input services used for providing exempted output services was not admissible
UCO Bank v. CST [2014] 36 STR 1169 (Tri.- Kolkata)].
89 CENVAT credit in respect of expenditure incurred on inputs such as CHA services, airport services, port services, etc. allowed in case of export since for exports, place of removal was port.
Ballarpur Industries Ltd. v. CCE [2014] 36 STR 1122 (Tri.-Mumbai)
90 Cargo handling service excluded handling of export cargo but such exclusions were to be considered as exempted service for the purpose of CENVAT Credit and there was no requirement for an exemption notification to be issued as long as the activity was a service and it was not taxable, such services are ‘exempted service’.
Prathyusha Associates Shipping P. Ltd. v. CCE&ST [2014] 36 STR 1145 (Tri.-Bang.)
91 The assessee paid service tax on 15-2-2007 by debit in the CENVAT Credit account whereas the due dates for payment of service tax were 5-9-2006 and 5-2-2007. The Hon’ble Tribunal held that there was a delay of 102 days and 10 days in payment of service tax and the assessee was liable to pay interest for these delays notwithstanding that it had sufficient CENVAT credit balance on 5-9-2006 & 5-2-2007 since the date of payment was the date of debit in the CENVAT Credit account.
CST v. Toyo Engineering Corporation Ltd, (2015)37 STR 238 (Tri.-Mum.)
D] OTHERS
Adjustment of tax
92 The assessee had excess paid service tax for the period 2005-06 in the month of February/March 2007 and adjusted the same towards its subsequent service tax liability for the period 2006-07. The SCN for denying this adjustment and demanding service tax was issued in December, 2008. On appeal, the Hon’ble Tribunal relying on CCE v. Sentinel Security Pvt. Ltd. (2006) 2 STR 520 (Tribunal) and CCE vs. Powercell Battery India Ltd. (2010) 19 STR 400 (Tribunal) held that the adjustment was in order.
Sopariwala Exports Pvt. Ltd. v. CST [2014] 36 STR 802 (Tri.-Ahmd.)
93 If excess payment of tax in a month was on account of inability of the assessee to exactly determine the total amount collected during the month against the bills raised (i.e. clerical), it was held that since the above was not on account of reasons involving interpretation of law, taxability, classification, valuation or applicability of exemption notification such excess could be adjusted against the tax liability of subsequent months even if the assessee did not have centralised registration under Rule 4(2) during the period prior to 1-3-2008. Refusal of adjustment would amount to collection of tax without the authority of law which was contrary to Article 265 of Constitution of India
General Manager (CMTS)
v. CCE [2014] 36 STR 1084 (Tri.- Del.)
Condonation of delay in filing refund claim
94 In respect of refund claim filed pursuant to clause 2(f) of Notification No. 9/2009 dated 3-3-2009 available to SEZ units, the Hon’ble Tribunal held that since the assessee were eligible for refund claim the condonation of delay by CCE(A) was valid and the fact that it was initial period of implementation of new procedure for claiming of refund was also considered.
CCE v. Divis Laboratories [2014] 36 STR 398 (Tri.-Bang.)
Export of service
95 Where the assessee had entered into an agreement with its foreign principal to undertake marketing of the principal’s products in India including providing technical support services, the Hon’ble Tribunal relying on M/s. Paul Merchants v. CCE (2013) 29 STR 257) held that the services would be considered as export under the Export of Service Rules and accordingly was not liable for service tax
Microsoft Corporation (I) (P) Ltd. v. CST [2014] 36 STR 766 (Tri.-Del.)
Liability to pay service tax
96 The assessees (State Government undertaking) provider of sale or time for advertisement service entered into an agreement which provided that the service tax would be borne by the service recipient of service and therefore failed to register and pay tax and file returns, the Hon’ble Tribunal held that any private agreement could not transfer the legislative mandated liability from the assessee (service provider) to the service recipient (advertisers) and hence the assessee was liable to pay service tax
Delhi Transport Corporation v. CST [2014] 36 STR 693 (Tri-Del.)
Limitation
97 On facts the Hon’ble Tribunal held that non-disclosure of a fact could not be equated with suppression; and if non-payment of tax itself was made on a ground by attributing mala fide to an assessee, the limitation period would never be applicable in any case of non-payment and in the resultant confirmation of demand. Accordingly the Hon’ble Tribunal held that the extended period of limitation could not be invoked
Religare Securities Ltd. v. CST [2014] 36 STR 937 (Tri.-Del.)
98 In the present case, the appellant received order on 18-11-2013 and filed appeal to Commissioner (Appeals) on 17-2-2014. The Revenue contended that the filing of appeal was delayed as limitation for filing appeal to Commissioner (Appeals) was to be computed day wise instead of month wise. The Hon’ble Tribunal held that, limitation period provided in section 85(3A) of Finance Act, 1994 was to be computed month wise and not day wise as ‘month’ was defined in General Causes Act as British Calendar month.
Ahmednagar Merchants Co-op. Bank Ltd. v. CCE&C, Aurangabad 2015 (37) STR 478 (Tri.-Mumbai)
99 The Hon’ble High Court in this case held that, once the legislature had used the expression ‘three months’ both in substantive part of section 85(3) and in its proviso, it would not be open for Courts to substitute the words ‘three months’ by words ‘ninety days’ and to do so would amount to rewriting of the legislative provision.
CC&CE, Alld. v. Ashok Kumar Tiwari 2015 (37) STR 727 (All.)
Penalty
100 The SCN had sought to impose penalty under sections 76 and 78 but the Commissioner (Appeals) upheld the penalty only under section 78. However, though no appeal was preferred by revenue for not imposing penalty under section 76, the Hon’ble Tribunal held that the assessee was liable to pay penalty under section 76. The Hon’ble High Court upheld the order of the Hon’ble Tribunal in view of the wide powers conferred on the Hon’ble Tribunal vide section 35C of Central Excise Act, 1944
Professional Investment Corporation v. CCE [2014] STR 59 (Mad.)
101 Where the assessee paid service tax as a recipient of services for the period December 2008/January 2009 immediately on being pointed out by the audit team, the Hon’ble Tribunal held that – Penalty under section 76 was not imposable as the O-I-O had imposed penalty under section 78 and the fifth proviso to section 78 provided that penalty under section. 76 would not apply if penalty under section. 78 was levied. In view of the facts that
• The assessee had paid the service tax along with interest immediately on being pointed out;
• The transactions were reflected in the balance sheet without any intention to suppress any information with Revenue; and
• The assessee would have got CENVAT credit and therefore the demand would be revenue neutral,
Penalty under section 77 and under section 78 were also dropped.
Caldery’s India Refactories Ltd. v. CCE [2014] 36 STR 102 (Tri.-Mum.)
102 The Hon’ble Tribunal held that, since the appellant had collected taxes and paid only when pointed out by the Revenue, they were liable for penalty.
Time Ads & Publicity v. CCEC&ST 2015 (37) STR 506 (Tri.-Bang.)
103 The appellant filed for refund claim on 24-12-2007 on the ground that assessees were integrated company subsequent to merger effective from 1-4-2004. The Revenue rejected the same as time barred. The Hon’ble Tribunal held that, in light of decision in assessee’s own case in 2011 (23) STR 625, date of merger w.e.f. 1-4-2004 was ultimately decided vide amalgamation order dated 30-4-2007 issued by Ministry of Petroleum and refund was claimed within one year from 30-4-2007. Therefore, it was within the time limit.
India Oil Corporation Ltd. v. CST, Mumbai-I 2015 (37) STR 575 (Tri.- Mumbai)
Show Cause Notice
104 In this case Show Cause Notice was served at wrong address but its receipt and receipt of other communications from Revenue at that address was acknowledged by appellant with signature and stamp. Further, assessee also communicated to Revenue about their willingness to deposit the amount demanded. In view of the said facts it was held that, plea of assessee that, they had not received SCN was rejected.
Nila Engineering Contractors v. ACCE, Cuddalore 2015 (37) STR 475 (Mad.)
105 Where the SCN was issued seeking to demand service tax on the assessee’s activity under the category of ‘Transportation of goods by air service’ but the adjudicating authority had confirmed the demand under the category of ‘Cargo handling services’, the Hon’ble Tribunal held the impugned order had travelled beyond the scope of the show cause notice and hence the same was liable to be set aside
DHL Logistics v. CST [2014] 36 STR 874 (Tri.-Mum.)
Rate of tax as on rendition of service relevant
106 The rate of tax applicable shall be the rate prevailing at the time of rendition of the taxable service and not the rate in force on date of receipt of payment of services
CST v. Lea Associates South Asia P. Ltd. [2014] 36 STR 909 (Tri.-Del.)
Rectification
107 In case where core issue was considered but the issues were not argued and no findings were recorded the Hon’ble Tribunal held that there was an error apparent on the face of the record and appeal was restored.
Correctech International Pvt. Ltd. v. CST [2014] 36 STR 1088 (Tri.- Ahmd.)
Recovery
108 The Hon’ble High Court held that recovery of undisputed tax was not permissible when adjudication of show cause notice was pending.
Technomaint Contractors Limited v. Union of India [2014] 36 STR 488 (Guj.)
Refund
109 Refund of service tax paid by a merchant exporter on –
• Storage and warehousing services for storage of export goods;
• Insurance charges on such goods;
• Transportation charges for such goods;
• Terminal handling charges for such goods
was admissible since such goods were exported.
Vijay Cotton & Fibre Co. v. CST [2014] 36 STR 1164 (Tri.-Mumbai)
110 Any amount of service tax paid by mistake on import of service under reverse charge mechanism on royalty paid for use of intellectual property prior to 18-4-2006 was to be refunded to the assessee and could not be credited to the Consumer Welfare Fund
Madhura Coats Pvt. Ltd. v. UOI (2014) 3 STR 1004 (Kar.)
111 The Hon’ble Tribunal held that refund sanctioned could not be adjusted against unconfirmed demand.
Bharat Sanchar Nigam Ltd. v. CCE (2014) 36 STR 1054 (Tri.-Del.)
112 Where on facts the total consideration under the work order between the parties was inclusive of service tax and no separate service tax was collected by them, it was held that the assessee’s claim for refund would not be barred by unjust enrichment even if the agreement was inclusive of service tax.
CCE v. J. R. Transformers Pvt. Ltd. (2014) 36 STR 1167 (Tri.-Del.) following CCE v. Modest Infrastructure Ltd. 2011 (24) STR 369 (Tri-Ahmd.)
Stay extension and recovery
113 On facts, the Hon’ble High Court held that where an application for extension of stay order made after 6 months from the date of the original stay order was pending, and the Revenue recovered the adjudicated demands, by debiting the bank account under section 87(b) during the pendency, the recovery became non est and invalid once the stay was extended since it would operate during the intervening period also and the money recovered under section. 87(b) was to be refunded back.
Chhotelal Virendra Kumar Jain v. Union of India [2014] 36 STR 495 (Raj.)]
Others
114 The Revenue in this case denied adjustment of service tax for failure to opt for centralized registration under rule 4(2) of STR, 1994. The assessee contended that adjustment was permissible in terms of Rule 6(4A) of STR, 1994. The Hon’ble Tribunal held that refusing adjustment against tax liability during other months amounted to collection of tax without authority of law contrary to Article 265 of Constitution of India. Further there was no condition in rule 6(4A) r.w.r. 6(4B) requiring assessee to opt for centralized registration for availment of adjustment facility, therefore the adjustment of excess tax paid was permissible.
General Manager (CMTS) v. CCE, Chandigarh [2014] 36 STR 1084 (Tri.-Del.)
115 The Hon’ble Tribunal in this case held that, so long as the activity was a service and even if it was not taxable, it had to be considered as an exempted service. It was not necessary that a service should be taxable and an exemption notification exempting from levy of service tax should have been issued. Non-taxable service rendered by assessee was also to be considered as an exempted service.
Prathyusha Associates Shipping P. Ltd. v. CCE, C&ST Visakhapatnam-I [2014] 36 STR 1145 (Tri.-Bang.)
116 The Hon’ble High Court in this case held that, insertion of “or by speed post with proof of delivery” after words “sending it by registered post with acknowledgement due” in section 37C(1)(a) of CEA, 1944 was procedural and clarificatory amendment and hence had retrospective effect. The Post Office issues receipt for both i.e. registered post’ and ‘speed post’ and hence both have to be treated as ‘registered post’ in view of section 28 of Indian Post Act, 1898 read with rules made thereunder.
Jay Balaji Jyoti Steels Ltd. v. CESTAT, Kolkata 2015 (37) STR 673 (Ori.)
117 The Hon’ble High Court in this case held that, section 85(4) gave ample powers to the Commissioner while hearing and disposing of the appeal to pass such order it thinks fit including orders for enhancing tax, interest or penalty and such powers inherently contain the power to remand a proceeding for proper reasons to the adjudicating authority. Thus, if proper enquiry was not conducted or the proceedings was decided ex parte, it would not be necessary in every case that the Commissioner converts itself to the adjudicating authority and conduct the entire enquiry and it would be lawful for the Commissioner to remand the matter back.
CST v. Associated Hotels Ltd. 2015 (37) STR 723 (Guj.)
118 The Hon’ble Tribunal held that Commissioner (Appeals) had power to remand the matter to the primary authority.
CCE v. Anard Colour Lab [2014] 36 STR 915 (Tri.-Del.)
119 Where a stockbroker had appointed sub-broker in State of Jammu and Kashmir for rendering services to customers located therein, the Hon’ble Tribunal held that since services were rendered in Jammu and Kashmir no service tax could be demanded on such services merely on the ground that accounts for such services were maintained by the stockbroker in taxable territory.
Religare Securities v. CST [2014] 36 STR 937 (Tri.-Del.)
Sunil Moti Lala