1. Services:
Accommodation Service:
1.1 Tirumala Tirupati Devsthanams vs. Supt. Of CCEST, Tirupati 2013 (30)
STR 27 (AP.)
The High Court in this case held that, Guest houses provided to
pilgrims by the appellant constituted under AP Charitable and Hindu Religious
Institution and Endowment Act, 1987 is liable to service tax under
Accommodation Service.
Construction Service:
1.2 LCS City Makers Pvt. Ltd. vs. CST, Chennai 2013 (30) STR 33 (Tri-Chennai)
In this case the
land owner transferred part of his right in land and in return got construction
flats and thereafter, land owner share of Undivided Share of land (UDS) of
flats registered in his name. The Tribunal in this case held as under;
- After registration of his UDS, Land Owner was like any other prospective buyer for whom construction of complex is carried out except that he has a guaranteed right to get his share of number of flats. Land owner parted with his rights in land partially for consideration in form of constructed flats to be received later. Service was provided to UDS holders including Land Owner. It was not the case that flat were constructed and sold, and in that view, it was not construction service for self.
- Residential complexes were not constructed for personal use of owners of land. It was predominantly for sale of individual buyers. In few cases, considering large percentage of total constructed area handed over to Land Owners, it was clear that, Land Owner had engaged Developer for construction of flats which flats could be sold by him.
- Construction of flat was composite contract as specified in Article 366(29A) of Constitution of India. Value of material and service can be separated and subjected to service tax by providing abatement from total contract value.
- Land Owner transferring part of his rights in land to developer, for consideration in form of constructed flats received later is a type of barter system, and therefore value indicated in agreement between Developer and Land Owner was not correct. Flats handed over to land were not different from those sold to individual buyers, and could not be assessed at different values for services in respect of both.
- Works Contract Service introduced w.e.f. 01/06/2007, covers services which were liable to Service Tax under different categories, hence it cannot be interpreted as altogether new entry. It only provides a new method of determining liability on such service at option of service provider.
Commercial Training or Coaching Service:
1.3 Soni Classes vs. CCE, Jaipur-I 2013 (30) STR 92 (Tri.-Del.)
The appellant a
proprietary firm provided Commercial Training or Coaching Service and another
proprietary firm sold study material etc. to students. The department sought to
include value of study materials, test papers etc. sold to students by the
other proprietary firm run from the same premises. The Tribunal held that,
there is no material on record showing other proprietary firm is independent
firm and there is failure to show purchase and resale of text books to
students. Therefore, the value of study materials is to be included in value of
taxable service and liable to service tax.
Rent-a-Cab Service:
1.4 CCE, Ludhiana vs. Singh Travels 2013 (30) STR 96 (Tri.-Del.)
The assessee in
this case engaged in providing a cab on call and demand. The Tribunal held that,
such kind of service is not included in rent-a-cab service.
Goods Transport Agency Service:
1.5 Birla Ready Mix vs. CCE, Noida 2013 (30) STR 99 (Tri.-Del.)
The department
in this case demanded service tax on vehicles used for transporting ready mix
concrete from place of manufacturing to place of delivery of goods. The
appellant contended that, they are responsible only for vehicle and no
custodial rights or responsibilities in matter of goods carried. They have also
not issued Consignment Note. The Tribunal held that, in terms of section
65(50b) of FA, 1994, when consignment note is not issued by operator, operator
cannot be considered as GTA. Mere fact that, activity of transportation carried
out by operator not to make appellant GTA and Log book maintained can be
equivalent as Consignment Note. The issue is already examined in G. S. Lamba
& Sons 2011 (430) VVST (AP), though in context of State Sales Tax,
however there is no need to take different view.
Clearing & Forwarding Agent Service:
1.6 Jaiprakash Strips Ltd. Vs. UOI 2013 (30) STR 139 (Bom.)
The appellant in
this case engaged in procurement of orders and handling of goods as per terms
of contract. The credit note issued disclosed that, the appellant directly
dealt with goods in lifting, providing vehicles and delivering. The Tribunal
held that, it is not a simple case of placing orders and earning commission and
the service was liable to tax under Clearing and Forwarding Agent Service.
Management or Business Consultants
Service:
1.7 Bharti Televentures Ltd. Vs. CCE, Delhi-I 2013 (30) STR 148 (Tri-Del.)
The appellant in
this case was engaged in liaison work and the department sought to tax them
under Management or Business Consultants Service. The Tribunal held that, every
name of service indicating entry in Section 65 (105) (r) of FA, 1994 meant to
cover only consultancy or advisory service and not all activities done by
others for management. Liaison work not in the nature of any consultancy or
advice but temporary function required for company’s functioning. Liaison work
not to be considered as “Management or Business Consultancy service”. It is further held that, inclusive portion of
definition cannot restrict meaning of “Means” part of definition, defining the
general meaning.
Business Auxiliary Service:
1.8 Sharwan Kumar Vs. CCE, Chandigarh-I 2013 (30) STR 176 (Tri-Del.)
The appellant in
this case, engaged in the process of denting and painting on the bus bodies
claimed exemption under Notification No. 8/2005-ST on the ground that, the
process amounts to manufacture. The department denied the said exemption. The
Tribunal held that, processes carried out by the appellant is essential for
completion of manufacture and therefore there is no reason to held processes
not manufacturing activity within Section 2(f) of CEA, 1944. Further, as per
Note 6 of Section XVII of CET, processes essential for transforming
semi-finished bus body into complete and finished article, therefore processes
of manufacture.
Further, with
regard to coverage of shifting of goods within the factory premises under
activities amounting to “Production or processing of goods for, or on behalf of
the client” specified in Business Auxiliary Service, it is held that,
‘production’ not covering shifting of goods and expression ‘processing’ used in
company of ‘production’ to cover activity of bringing about change in the goods
and not expressions like shifting, transportation, storage etc.
2. Interest/Penalties/Others:
2.1Kalyani Hayes Lemmerz Ltd. vs. CCE, Pune-III 2013 (30) STR 71 (Tri-Mumbai)
In this case, the appellant failed to file refund claim under Notification
No. 41/2007-ST quarter-wise as stipulated in para 2(c) of the said Notification.
The Tribunal held that, exemption under Notification operationalized through
refund mechanism and unless conditions specified satisfied, claim cannot be
entertained. Amendment made vide Notification No. 32/2008-ST prospective and
inapplicable to past refund claims.
2.2 M. R. Coatings Pvt. Ltd. vs. CCE, Rajkot 2013 (30) STR 76 (Tri-Ahmd.)
In this case the appellant paid service tax and interest before
issuance of SCN, however department imposed penalty under section 76. The
Tribunal held that, discharge of service tax liability and interest thereof and
no adjudication for enhancement or addition to amount already discharged. In
view thereof provisions of Section 73(3) of FA, 1994 are applicable and
issuance of SCN was not required. The Tribunal followed Karnataka High Court
decision in Adecco Flexione Work Force Solutions Ltd.
2011-TIOL-635-HC-KAR-ST.
2.3 Anand Decorators & Hirers vs. CST, Ahmedabad 2013 (30) STR 86
(Tri-Ahmd.)
The appellant in this case mis-declared value of service by collection
of excess amount on reverse side of Invoice and short payment of tax. They have
contended that, since SCN is issued after two years of SCN no demand is to be
raised. The Tribunal held that, judicial decision require decision of Delhi
High Court in Bajaj Travels Ltd. 2012 (25) STR 417 (Del.) to be followed
and hence, penalties under sections 76 and 78 are sustainable. Since the
appellant is partnership firm facing stringent financial difficulties and
almost 75% of tax demand paid before issue of SCN, penalty is restricted to
100% of Service tax demanded.
3. Cenvat
Credit:
3.1 CCE, Ahmedabad-II vs. Cadila Healthcare Ltd. 2013 (30) STR 3 (Guj.)
The High Court in this case allowed Cenvat
credit on following input services;
- Technical Testing and
Analysis service availed by appellant engaged in manufacture of
medicaments, for testing of clinical samples by various agencies prior to
commencement of commercial production.
- Technical Inspection and
Certification services availed in respect of instruments used for
measuring size, temperature, weight, humidity.
- Repair/maintenance of copier
machine, air conditioner, water cooler, Management consultancy, Interior
Decorator, Commercial or Industrial Construction service.
- Clearing and Forwarding
Agents services used for storage of goods after clearance from factory.
- Courier collecting parcel of
goods from factory for further transportation.
The High Court has not allowed
Cenvat credit of service tax paid on commission paid to foreign agents as
agents were directly concerned with
sales rather than sales promotion and services provided by them was neither Business Auxiliary Service nor
they were covered under the definition of input service. The said services were
not used directly or indirectly in or in relation to manufacture of final
products or clearance of final products from place of removal.
3.2 CCE, Guntur vs. Varun Motors 2013 (30) STR 31 (Tri-Bang.)
The appellant, authorized
distributor of ‘Bajaj Auto Ltd.’ distributed Cenvat credit from Sales Office to
other authorized service station. The Adjudicating Authority revoked ISD
registration as sales office not to be treated service provider. The Tribunal
held that, Input Service Distributor definition in CCR, 2004 indicating ISD to
be an office of manufacturer or provider of service provider. Sales office
undisputedly appellant office and appellant is service provider, therefore
there is no objection for treating premises as ISD premises. Hence, denial of
credit taken based on credit distributed by ISD is not irregular.
3.3 Wadpack Pvt. Ltd. vs. CCE, Bangalore 2013 (30) STR 51 (Tri-Bang.)
The department in this case
disallowed Cenvat credit of service tax paid on Business Auxiliary Service
constituting commission paid to agents for sales promotion of dutiable goods.
The Tribunal relying on Bombay High Court decision in Ultratech Cement Ltd.
2010 (20) STR 577 (Bom.) held that, where a particular activity is
expressed mentioned in the inclusion part of definition, one need not bother to
examine whether it satisfied the ingredients of main definition. Sales
promotion is expressly figures in inclusion part of definition of Input service
in Rule 2(l) of CCR, 2004.
3.4 Handa Refrigeration vs. CCE, Gurgaon 2013 (30) STR 111 (Tri-Del.)
The Tribunal in this case allowed
Cenvat credit of service tax paid on purchase of PMP certificate and royalty
paid for repair and maintenance service, both used for providing Repair &
Maintenance Service.
3.5 YGI Industries (India) P. Ltd. vs. CCE, Mumbai-III 2013 (30) STR
146 (Tri-Mumbai.)
The Tribunal in this case held
that, once the service tax has been paid on job charges for grooving and the
said service has been used in or in relation to the manufacture of the final
products of the appellant, the appellant is rightly entitled to avail Cenvat
credit. It is further held that, whether he was entitled for exemption and was
not required to pay duty at all should not be and cannot be a consideration for
the Jurisdictional Officers at the appellant’s end, who is only a service recipient.
3.6 Zydus Nycomed Healthcare Pvt. Ltd. vs. CCE, Belapur 2013 (30)
STR 197 (Tri-Mumbai.)
The Tribunal in this case allowed
Cenvat credit of service tax paid on travel and car service, catering service
and construction service used for repair and maintenance of factory premises.
3.7 Hindustan Zinc Ltd. vs. CC&CE, Jaipur-II 2013 (30) STR 199 (Tri-Del)
The department denied Cenvat
credit of input services distributed by Head Office, which distributed credit
of Service Tax paid thereon without registration as service distributor. The
Tribunal observed that, identity of head office, service recipient and provider
as well as genuinety of transaction not in doubt. It is held that, denial of
Cenvat credit only because invoices had name of head office, defeated object of
avoiding cascading effect. Also this was at initial stage of implementation of
law regarding distribution of credit, where difficulties were being experienced
because of Registration and other technical procedures involved.
3.8 Dagger Forst Tools Ltd. vs. CCE, Mumbai-I 2013 (30) STR 206 (Tri-Mumbai)
The department in this case
sought to deny distribution of credit by ISD on the ground that, the ISD is
permitted to distribute taxes paid on or after registration. The Tribunal held
that, there is no such kind of restriction provided in the Rules and therefore
denying distribution of credit on such basis is unwarranted.
3.9 Castrol India Limited vs. CCE, Vapi 2013 (30) STR 214 (Tri-Ahmd.)
The Tribunal in this case inter
alia held that, demand for disallowance of Cenvat credit distributed by HO
is required to be raised at the end of ISD (HO) and not at the unit level.
3.10 CCE, Vadodara vs. Schott Glass India Pvt. Ltd. 2013 (30) STR 219
(Tri-Ahmd.)
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