2019-TIOL-31-HC-MAD-VAT

Sri Sai Agencies Vs Assistant Commissioner (CT)

Whether dealer's registration under VAT Act can be cancelled per se, without affording him an opportunity to show cause - NO: HC

- Assessee's petition allowed : MADRAS HIGH COURT

SERVICE TAX

2019-TIOL-36-CESTAT-BANG

Eagleton The Golf Resort Vs CCE & ST

ST - 'Club and Association Service' - Appellant is running an international golf resort and star hotel with various facilities and these rooms are let-out to employees of corporates who pay room tariff and use facilities for outing and formal meetings - corporates are also allowed to use the mandap and conference facilities free of charges on complimentary basis in order to attract customers - SCN issued alleging that the appellant was rendering convention service to various corporates by letting their 108 rooms and other facilities at the Golf Resorts to the employees of the corporates, for which they are liable to pay service tax, interest and penalty - demand confirmed by CST, Bangalore hence appeal to CESTAT.

Held: Appellants have produced the bills which have been issued to various customers during the impugned period and it is found that appellants have not charged any tariff for conference halls and they have only charged for renting of the rooms - Revenue has not been able to bring on record any evidence to show that the appellants are charging service tax on convention service - ratio of the decisions in Dukes Retreat Ltd. 2017-TIOL-1624-CESTAT-MUM , Merwara Estates 2009-TIOL-871-CESTAT-DEL , Rambagh Palace Hotels Pvt. Ltd. 2012-TIOL-673-CESTAT-DEL , Chokhi-Dhani Resorts Pvt. Ltd. 2017-TIOL-878-CESTAT-DEL are squarely applicable in the facts and circumstances of the present case - following the same, impugned order set aside since not sustainable in law - appeal allowed with consequential relief: CESTAT [para 6, 6.1]

-Appeal allowed : MUMBAI CESTAT

2019-TIOL-29-CESTAT-MUM + Case Story

August Marketing Vs CCE

ST - Appellant had rendered services to the local exporters in the sale of the seafood and received commission from them - cannot be considered as ‘export of service’ - service tax payable - as facts not disclosed, demand rightly confirmed along with penalty and interest by invoking the extended period of limitation - Appeal dismissed: CESTAT [para 7, 8]

- Appeal dismissed: MUMBAI CESTAT

2019-TIOL-28-CESTAT-BANG

Canara Bank Vs CCT

ST - The assessee is a Banking company and is providing various services falling under the category of ‘Banking and Other Financial Services’ - The bank charges commission on the same and offer the same to service tax - They also incurred expenditure on behalf of customer while offering services and gets it reimbursed from the customer - Since it was only a reimbursement of expenses, the same was not offered to tax and the bank have not collected any tax from the customers - Based on audit observation, a SCN was issued alleging short payment of tax by assessee - The only issue to be decided is whether the reimbursement of expenses is to be included in value of taxable service or not during the relevant period - This issue was examined by Supreme Court in case of Intercontinental Consultants and Technocrats Pvt. Ltd. - 2018-TIOL-76-SC-ST and the Supreme Court has held that reimbursable expenses are not to be included in the value of taxable service for the purpose of service tax - By following the ratio of Apex Court decision in Intercontinental Consultants and Technocrats Pvt. Ltd., the Tribunal in various cases has held in favour of the assessee - Therefore, by following the said ratio of the decision, the impugned order is not sustainable in law - Consequently, the impugned order is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

2019-TIOL-27-CESTAT-ALL

Sahara India Life Insurance Company Ltd Vs CCE & ST

ST - Whether the demand towards Policy Administration Charges for period prior to 1st May, 2011 is taxable - The second issue is that IRDA had permitted maximum rate of 1.35% chargeable as administrative charges vide circular by way of overall guideline, whereas the assessee took permission for charging a lower percentage varying from 0.65% to 1%, whether on such nominal difference between 1.35% and the charges at a lower percentage collected by assessee, whether they are liable to service tax - So far the first issue is concerned regarding chargeability of service tax on administration charges, such levy have been introduced w.e.f. 1st May, 2011, when the definition in Section 65(105)(zx) was amended, and for the words "in relation to the risk cover in the life insurance" the words "by an insurer, including re-insurer carrying on life insurance business" where substituted - Thus evidently administrative charges also became taxable w.e.f. 01/05/2011 - The period of dispute is July, 2010 to 31st March, 2011, which is prior to the amendment w.e.f. 01/05/2011 - Accordingly, administration charges are not subject to service tax prior to 01/05/2011 and accordingly set aside the demand - So far the next demand is concerned regarding levy of service tax on notional 'fund management charges' assessee have paid service tax on fund management charges as collected by them, out of the premium, which is at the same percentage as permitted by Insurance Regulatory & Development Authority, was correct - No service tax can be demanded on such notional value which have not been collected and not charged by service provider - Such view has also been expressed by Supreme Court in its judgment in M/s Bhayana Builders Private Ltd. - 2018-TIOL-66-SC-ST - So far the third issue is concerned, the value on which Revenue has demanded amount under Sub Rule (3) of Rule 6 of CCR, 2004, does not represent value of exempted services - Accordingly, the impugned order is set aside: CESTAT

- Assessee's appeal allowed: ALLAHABAD CESTAT

 

 

 

 

CENTRAL EXCISE

2019-TIOL-29-HC-MUM-CX

CCT & CE Vs Axis Bank Ltd

CX - Respondent is a Banking Company and is engaged in providing various banking and financial services - The respondent during period April, 2003 to March, 2011, took CENVAT Credit of service tax paid to the Insurance Companies - The amounts paid to the Insurance Companies for Insurance of the employees is input service - This is particularly, so as there is no exclusion clause therein, as was provided by the amendment in April, 2011 - Therefore, the benefit, if any, to the employee is incidental and not the primary purpose/object of taking insurance cover for its employees - In any case, this service would also stand covered by inclusive part of the definition of input services as provided in Rule 2(1) of CCR, prior to April, 2011 - As regards to CENVAT of service tax paid to Real Estate Agent while obtaining their services to procure residential accommodation, the services of a Real Estate Agent is obtained by the Respondent - This for the purpose of allotting accommodation to its employees when posted at a particular station - These services enable the Respondent to keep its personnel available to provide services at a particular station - Thus, it has a nexus to the output services being provided by Respondent - Therefore, the Respondent would be entitled to avail of Cenvat Credit to the extent service tax is paid to Real Estate Agents.

As regards to CENVAT Credit of service tax paid to Event Management Services, the Tribunal has rendered a finding of fact that the services of Event Managements are obtained to organize the events - These events are held/ organized by the Respondent to target people with high net worth so as to attract/ retain them as their constituents - Thus, these services are in the nature of sales promotion service and would eonomine fall within the inclusive part of definition of input service - Therefore, no fault can be found with the view of Tribunal - More particularly, in the absence of Revenue being able to point out that this finding of Tribunal is perverse: HC

- Appeal dismissed: BOMBAY HIGH COURT

2019-TIOL-28-HC-AHM-CX

Linde Engineering India Pvt Ltd Vs UoI

CX - On the merits of case, it was submitted that percentage of completion (POC) sales is recognition of revenue as per Accounting Standards7 and that the same does not reflect consideration for service provided - It was submitted that the mode and method of accounting adopted by service provider is of no relevance to determination of liability to pay service tax - The attention of Court was invited to the findings recorded by adjudicating authority wherein he has recorded that understandably, the contract revenue is POC sales for which invoices are issued and thus forms the billed revenue - From the formula, adding billed revenue to POC sales is absurd and incongruous and therefore, the formula is incorrect - Thus, addition of billed revenue to POC sales is wrong and the gross revenue arrived at by the audit is totally illogical and is against accounting standards - It was submitted that therefore, the very basis of the SCN has not been accepted - Having regard to the submissions advanced by petitioner, issue Notice returnable on 23.01.2019 - By way of ad interim relief, the respondents are restrained from making any coercive recovery pursuant to the impugned O-I-O: HC

- Issue notice returnable: GUJARAT HIGH COURT

2019-TIOL-26-CESTAT-MAD

Fenesta Buildings Systems Vs CGST & CE

CX - The assessee is engaged in manufacture of UPVC Doors & Windows and parts - They availed CENVAT Credit on inputs, capital goods and input services and utilized the same for payment of duty - Based on audit observations, a SCN was issued on assessee for recovering the amount being the CENVAT Credit wrongly availed along with interest and for imposing penalty under Rule 15(2) of CCR, 2004 r/w Section 11AC of CEA, 1944 on the allegations that assessee had wrongly availed service tax credit on ‘Gardening Services’ during period from 30.08.2011 to 28.10.2013 which according to Revenue was not used either directly or indirectly in manufacture of final products as stipulated in Rule 2(l)(ii) of CCR, 2004 - The jurisdictional High Court of Madras in M/s. Wipro Ltd. - 2017-TIOL-897-HC-MAD-ST has considered an issue relating to Housekeeping, Landscaping and Gardening Services - The issue involved in the case on hand is therefore squarely covered by ruling of jurisdictional High Court and by the principle of stare decisis, appeal allowed with consequential reliefs: CESTAT

- Appeal allowed: CHENNAI CESTAT

 

 

 

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