1.1 City Motors & Financial Services vs. CCE, Gurgaon 2012 (25) STR 449 (Tri.-Del.)
The Tribunal in case held that Car dealers promoting car loans of their client Banks/NBFCs were covered within the definition of Business Auxiliary Service under clause (b) “promotion and marketing of services provided by the client” and clause (d) “collection or recovery of cheques, accounts and remittance, evaluation of prospective customer”, even prior to its amendment on 10/09/2004 adding “development of prospective customer”. It was not a case of introduction of new entry and inclusion of new services with presupposition that they were not liable to tax earlier.
It is further held that, the appellant is not entitled to benefit of exemption Notification No. 14/2004-ST as they were not providing services on behalf of the client and 25/2004-ST. as their services were not in relation to banking and other financial service.
Also the matter is interpreted by judicial forums in different ways and in such situation extended period cannot be invoked for raising demand.
1.2 Vigyan Gurukul vs. CCE, Jaipur-I 2012 (25) STR 459 (Tri.-Del.)
The appellant in this case received advance payment before 10/09/2004 for providing part of services part of which was provided after 10/09/2004. They have discharged service tax liability @ 8%. The department sought to demand tax @ 10.2% on part of services provided after 10/09/2004. The Tribunal held that, department did not take any objection to such payment in advance so at a later date when rate went up, there is no reason for Department to turn around and say that appellant should not have paid tax in advance. Rate that was applicable at the time of receipt of value of service will apply in a case where the assessee chose to pay tax on advance amount received.
1.3 Rameshchandra C. Patel vs. CST, Ahmedabad 2012 (25) STR 471 (Tri.-Admd.)
In this case, the appellant provided contract manufacturing in the premises of principal with machinery, space and all other facilities provided by them. The department sought to tax them under Manpower Recruitment or Supply Agency service. The Tribunal observed that, agreement between parties talking about products to be manufactured and payments to be made, and silent about number of men or labour to be used or manner in which they have to be used or quantum of payments to be made to them. It is held that, there was no liability to Service tax under Manpower Recruitment or Supply Agency service.
1.4 Raj Ratan Castings Pvt .Ltd. vs. CCCE, Kanpur 2012 (25) STR 481 (Tri.-Del.)
The Tribunal in this case held that, in terms of rule 2(1)(d)(iv) of STR, 1994 liability to pay service tax on commission on mutual fund distribution is on recipient of services i.e. mutual fund company and if they did not pay it, liability cannot be transferred to mutual fund distributor.
1.5 Bharti Airtel Ltd. vs. State of Karnataka 2012 (25) STR 514 (Kar.)
The High Court in this case held that, light energy (ACLE) which is used as carrier in telecommunication service for rendering service is covered by the Parliamentary Legislation i.e. FA, 1994 and it does not fall within the Entry 54 of List-II of VII Schedule. It is further held that, the contract in question is not a composite contract but an indivisible contract and a contract simplicitor. There is no element of sale at all of any extent. It is also held that, light energy (ACLE) is one form of electromagnetic waves. It is not goods and there is no sale of goods and State has no powers to levy tax on it.
2. Interest/Penalties/Others:
2.1 Bajaj Travels Ltd. vs. CST 2012 (25) STR 417 (Del.)
The High Court in this case held that;
- Assessee was able to prove their bona fides and there was reasonable cause for non-imposition of penalty. Impugned service tax was a new tax. It was more so as not only entire tax was paid within two days of visit by departmental officers, even interest on delayed payment was made good. Also Department itself had issued Circular accepting fact that there was confusion and on that basis waived penalties.
- Amendment to section 78 did not have retrospective operation in absence of any specific stipulation to that effect and by its nature was not clarificatory.
- Prior to amendment to section 78 w.e.f. 16/05/2008, section 76 and 78 operated in two different fields and penalty was imposable under both separately, even if offences were committed in course of same transactions or arose out of same act.
- Onus to prove “reasonable cause” for failure to pay Service tax is on assessee. They have to show that there was sufficient and proper reasons which occasioned their making of short deposits of Service tax. Bona fide deposit of Service tax was sufficient to invoke section 80.
- Bona fide implies absence of fraud or unfair dealing. Equivalent to this phrase is ‘honesty”. It is refers to state of mind, and its correct province is to qualify things or actions that have relation to mind or motive of individual. Reasonable cause in common parlance means cause or ground which was not unreasonable.
2.2 CST, Bangalore vs. Master Kleen 2012 (25) STR 439 (Kar.)
The High Court in this case held that, no show cause notice is required to be issued for imposition of penalty, if payment of service tax along with interest has been made before issuance of show cause notice.
2.3 Shree Rama Multi-Tech Ltd. vs. CST, Ahmedabad 2012 (25) STR 596 (Tri-Ahmd)
The Tribunal in this case held that, when intimation is received from service tax assessee about payment of service tax and disputing the liability of interest the provisions of section 73(3) of FA, 1994 come into play. Central Excise Officers should have determined the interest payable and communicated to the assessee and if the assessee did not pay the same, they had one year period for issue of SCN. When section and proviso are read together, a letter should have been written to assessee to pay interest and if they fail to pay interest, SCN should have been issued. No such letter was written by Revenue, hence the penalties under section 76 and 77 to be set aside.
3. CENVAT Credit:
3.1 CCE, Bangalore-I vs. Bell Ceramics Ltd. 2012 (25) STR 428 (Kar)
The High Court in this case held that Rent-a-cab service and Outdoor catering service to employees working in factory are in relation to manufacture of final products and hence credit is admissible.
3.2 CST, Bangalore vs. Aravind Fashions Ltd. 2012 (25) STR 583 (Kar)
In this case, the assessee manufacturer of readymade garments paid service tax on Intellectual Property Right Service under reverse charge mechanism, by utilizing cenvat credit availed on input services. The High Court held that, though assessee was recipient of IPR service, as their service provider was outside India, they were deemed to be service provider and liable to pay service tax, which can be discharged by them using their cenvat credit.
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