SERVICE TAX

2018-TIOL-3559-CESTAT-MUM + Case Story

3I Infotech Ltd Vs CST

ST - Transaction undertaken involves sale of software purchased from third parties, such as Oracle, Sybase, etc. on which VAT has been paid - sale of hardware and supply of customized software as per clients specification chargeable to service tax under the category of ‘Information Technology Software Service' after 16.05.2008 and prior to that under ‘Intellectual Property Services' - approach of the adjudicating authority while dealing with the issues is in accordance with the international practices of treatment of software related transactions as elucidated in the deliberations in the Conference of "Committee of Experts on International Co-operation in Tax Matters" , Fifteenth Session at Geneva from 17 to 20th October 2017; the paper presented at the said Conference on "Software Payments as Royalties under Article 12" which has considered the treatment of the payments received for transaction in software's and findings from the UN Art. 12 Commentary and the OECD Commentary - However, the first SCN dated 19.10.2009 has been issued demanding service tax under the category of "Management, Maintenance & Repair Service" and, therefore, confirmation of demand under another category viz. Intellectual Property Rights service cannot be justified and to that extent the matter is definitely not maintainable - value of the goods for the provision of the taxable service cannot be excluded from the gross amount charged as consideration for the services provided just for the reason that Sales tax/VAT has been paid on the said goods and value is shown separately, however, the entitlement of notification 12/2003-ST is required to be examined by the adjudicating authority - In the matter of services provided to the SEZ, adjudicating authority to examine adjudicating authority to consider the exemption extended via refund mechanism in terms of notification 9/2009-ST, 17/2011-ST - as Octroi charges are in nature of levy for transportation of goods and cannot be said to be part of value of taxable service; that since the adjudicating has not considered the issue, the matter needs to be remanded - service tax is not payable in respect of services rendered in J&K, therefore, Commissioner to re-quantify the demand - ground of limitation loses relevance as demand for the period prior to 16.05.2008 has been held as not maintainable - Appeal partly allowed/matter remanded: CESTAT [para 10, 11]

- Appeal partly allowed/Matter remanded: MUMBAI CESTAT

CST Vs Scope International Pvt Ltd

ST - The assessee is a 100% EOU and cleared their finished products / services for export without payment of duty under bond with bank guarantee - They availed CENVAT credit on service tax paid on such input services - Since the credit remained unutilized as their output services were exported, the assessee filed refund claim under Rule 5 of CCR, 2004 r/w Notfn 5/2006-CE(NT) - Same was rejected on various grounds - One of the ground of rejection of refund claim by Commissioner (A) is that the assessee has claimed refund of credit which was availed prior to 14.3.2006 - Said issue stands decided in case of WNS Global Services (P) Ltd. which has been upheld by High Court of Bombay - Notfn 5/2006 does not state that exports have to be made after 14.3.2006 to be eligible for refund of unutilized credit - So also it does not debar the refund of unutilized credit pending in the CENVAT account of the assessee on the date when the notification has come into existence - With regard to the issue where commissioner (A) has remanded the matter for verification whether the input services are eligible for credit, as jurisdictional High Court in case of M/s. A.S. Babu SAH Desgins has held that Commissioner (A) has powers to remand, no bar found to Commissioner (A) ordering such remand - The Commissioner (A) has also directed the assessee to file a declaration in terms of Circular dated 19.1.2010 - Such direction is not in order as said circular has come into force only with effect from 19.1.2010 and was not available to assessee at the time of filing refund claim - However, no irregularity found in remanding the matter to adjudicating authority to verify the eligibility of refund in respect of input services - With regard to issue of Rule 4A, which is challenged by department in their appeal, raising invoice within 14 days is merely a procedural requirement - There is no condition imposed in Notfn or Rule 5 that the invoices should comply such condition laid in Rule 4A - The view taken by Commissioner (A) is upheld - Assessee is eligible for credit availed prior to 14.3.2006 - The adjudicating authority shall process the refund claim in accordance with findings: CESTAT

- Appeals disposed of: CHENNAI CESTAT

Janoschka Graphic Services India Pvt Ltd Vs CCE & ST

ST - Issue is regarding refund of service tax paid on hotel accommodation extended by appellant to various individuals who were visiting their facilities in connection with the exported services rendered by the appellant.

Held: Said hotel accommodation was provided to various individuals who were visiting the appellant's premises for sorting out their problems in respect of the services which are exported - Following the Tribunal decision in case of Tata Management Training Centre - 2014-TIOL-1504-CESTAT-MUM the impugned order to the extent it is contested is set aside and the appeals are allowed with consequential relief: CESTAT [para 4]

- Appeals allowed: MUMBAI CESTAT

Intas Pharma Ltd Vs CST

ST - The issue involved in the present case is that in respect of services consumed within the SEZ unit, whether the Service Tax paid on such services is refundable even before the amendment of notfn 09/2009-ST by amendment notfn 15/2009-ST - Identical issue had come up before Mumbai Tribunal in case of Sears IT And Management Services India Private Ltd. - A similar issue has been taken by Tribunal in assessee's own case in - 2013-TIOL-1091-CESTAT-AHM which was held in favour of assessee - In view of said judgments, the issue is no longer res integra - Therefore, following the same, impugned order is modified: CESTAT

- Appeals allowed: AHMEDABAD CESTAT

CENTRAL EXCISE

2018-TIOL-3555-CESTAT-MAD

Terex India Pvt Ltd Vs Commissioner of GST & CE

CX - Assessee is engaged in manufacture of crushing machines and screening machines - During verification, it was noticed that they have availed CENVAT Credit of service tax paid in respect of Rent-a-Cab Services - It appeared to Department that said services are not eligible for credit as it falls within the exclusion Clause of definition of input services - SCN was issued proposing to disallow the credit and for recovery of same along with interest and for imposing penalty - After due process of law, Original Authority confirmed the demand, interest and imposed penalties - The services of Rent-a-Cab will not qualify as input service and will not be eligible for credit if motor vehicle is not a capital good for service provider - It can be seen from definition of capital goods that when the motor vehicle which is used for transporting of passengers or for renting of vehicles, is registered in name of service provider, the same would be a capital good for service provider - Thus, if the motor vehicles are capital goods for the service provider who is providing service of Rent-a-Cab / renting of cabs, then the said services would be eligible for credit - The said fact as to whether these vehicles are capital goods for the service provider requires verification - The matter, thus, remanded to the adjudicating authority: CESTAT

- Matter remanded: CHENNAI CESTAT

Sanofi India Ltd Vs CCE

CX - The assessee company availed cenvat credit in respect of Construction service - The Department contested such availment on grounds that the amended scope of 'input service' under Rule 2(l) exluded 'Construction service' from its scope.

Held: The nature of the input services in question is of civil work on an existing building - The input service provider paid service tax & also claimed 30% rebate as is available on 'Repair and Maintenance' service - Also considering the findings of the Tribunal in the assessee's own case, credit is admissible on Construction Services used for Repair and Maintenance - The inclusion clause of Rule 2(l) includes Modernisation, Renovation and Repair of the factory premises of manufacturer within scope of input service - Hence the order denying credit is set aside: CESTAT (Para 1,4)

- Assessee's appeal allowed: AHMEDABAD CESTAT

Ramco Cements Ltd Vs CC, CE & ST

CX - Assessee is engaged in manufacture of cement - Dispute relates to admissibility of CENVAT Credit for Clean Energy Cess paid on imported / indigenous coal, Lignite - It is a fact that the Clean Energy Cess on coal has been levied by Section 83 of FA, 2010 and as per Section 83(3), it is provided that Clean Energy Cess in respect of goods specified in Tenth Schedule is levied as duty of excise and sub-section (7) of Section 83 also declares that any of provisions of CEA, 1944 relating to levy, exemption from duty of excise, refund, offences, penalties and confiscation will be applicable in respect of Clean Energy Cess levied under sub-section 3 - As per statutory provisions, Clean Energy Cess contains the reference to provision of CEA, 1944 and even if CCRs, 2004 do not specifically mention in Section 3 but still the assessee is entitled to CENVAT credit because the Cess has been paid as duty of excise and the same has been levied under Section 83 of FA, 2010 - While interpreting the provisions of Sugar Cess Act, 1982 and the CCR, High Court of Karnataka in case of Sri Renuka Sugars Ltd. - 2014-TIOL-98-HC-KAR-CX held that Sugar Cess levied and collected as additional duty on imported sugar would qualify for CENVAT credit - Therefore, by relying upon the ratio of said decision, impugned order denying CENVAT credit of Clean Energy Cess is not sustainable in law: CESTAT

- Appeals allowed: BANGALORE CESTAT