2023-TIOL-1533-HC-AHM-VAT
State of Gujarat Vs Dharampal Satyapal Ltd
Whether where entire exercise undertaken as precursor to assessment and orders of assessment itself are under challenge, amount of pre-deposit in respective appeal has to be tax amount payable - YES : HC
- Revenue's appeal dismissed: GUJARAT HIGH COURT
2023-TIOL-1532-HC-AHM-CT
Zed Vitrified Pvt Ltd Vs State of Gujarat
Whether where taxpayer to avail benefit of Vera Samadhan Yojna, 2019 could not file its application before cut off date, such benefit of scheme cannot be extended to it - YES: HC
- Assessee's petition dismissed: GUJARAT HIGH COURT
2023-TIOL-1009-CESTAT-MUM
Thyssenkrupp System Engineering India Pvt Ltd Vs CCGST & CE
ST - The appellant is a wholly owned subsidiary of M/s ThyssenKrupp System Engineering, Germany and provides business and marketing related support services to such parent company - For providing such services, appellant got itself registered with Service Tax Department - On detailed investigation into matter, Department came to conclusion that during disputed period, appellant was working as an intermediary between parent company and its customers located in India and thus, is liable to pay service tax in terms of Place of Provision of Service Rules, 2012 - Appellant has not facilitated or assisted parent company in connection with supply of goods or services - Further, there was no contractual obligation on part of appellant to ensure participation of appellant to provide services or goods between overseas parent company and any other defined party /customer - Therefore, in absence of necessary pre-requisites of facilitating actual supply of goods or services between two or more identifiable persons, transaction made by appellant should not qualify as an intermediary service, rather, services rendered by appellant qualify as business and marketing support service - CBEC vide circular no. 159/15/2021-GST has clarified the scope of an intermediary service - According to said circular, in order to constitute intermediary service, the conditions to be fulfilled are that there should be minimum of three parties to contract, two distinct supplies i.e., main supply and ancillary supply, and intermediary service provider to have the character of an agent, broker or any other similar persons - None of ingredients, itemized in definition of intermediary service are fulfilled by appellant, inasmuch as it is not a facilitator between parent company and its customers located in India with regard to either supply of goods or provision of service - Conditions prescribed under sub-rule (1) of Rule 6A of Service Tax Rules, 1994 have been duly fulfilled by appellant inasmuch as service recipient was located outside India, the payment towards provision of service has been received in convertible foreign exchange - Thus, place of provision of service in this case would be governed by Rule 3 of Place of Provision of Services Rules, 2012 - In absence of any documentary evidence that appellant had acted as an intermediary between overseas entity and its Indian customer and that the location of service receiver is in Germany, the transaction should appropriately be considered as export of service - No merits found in impugned order, insofar as it has upheld confirmation of adjudged demands on appellants - Therefore, impugned order is set aside: CESTAT
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-1008-CESTAT-AHM
Enbee Education Centre Pvt Ltd Vs CCE & ST
ST - The issue to be decided is, whether subsidiary company of appellant located in USA is acting as C&F Agent or as a Commission Agent and if it is a commission agent whether the service tax is payable on commission received by them in view of provisions of Section 66A of Finance Act, 1994 read with Rule 2(1)(d)(iv) of Service Tax Rules, 1994 - Case of revenue is that Subsidiary Company of appellant at USA had taken delivery of goods from port of destination i.e from Port in USA and effected sale of goods on behalf of appellant with some consideration - Therefore, services received by appellant i.e commission agent service' will classifiable under category of 'Business Auxiliary Services' and are chargeable to Service tax - Department alleged that appellant are receiving services of 'Commission Agent' from subsidiary Company - Whereas as per appellant subsidiary company is acting as consignment cum clearing and forwarding agent - However, there is difference between terms 'consignment agent' and 'commission agent' - This distinction is also clarified in Board Circular No. 59/8/2003-ST - As per agreement entered between appellant and subsidiary company, it is found that subsidiary company is merely clearing the goods in USA and forwarding the same to Customers of appellant - This fact also evident from clause 2 of agreement between appellant and subsidiary company in which it is mentioned that the books sold/shipped to subsidiary company is on 'consignment basis' - Clause 6 of said agreement provides that all import expenses on cargo at the port of destination, are sole responsibility of buyer and he is responsible for cargo discharge, including all charges incurred in supervision of discharge - The Subsidiary company is also undertaking activity of clearing and forwarding agent - No clause of agreement provides that subsidiary company also undertaking any marketing or promotion activity for sale of books exported by appellant - In such a scenario, the subsidiary company who is service provider had to be held as consignment agent rather than commission agent - The conclusion of Adjudicating authority that appellant is liable to pay service tax under taxable service 'Business Auxiliary Services' cannot be sustained - Accordingly, impugned order is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-1007-CESTAT-AHM
Haver Ibau India Pvt Ltd Vs CCE & ST
CX - This appeal has been filed by assessee against demand of reversal of cenvat credit on certain amounts written off by vendor - Assessee have vehemently asserted that goods have been used in manufacture of final products - This assertion was also made before lower authorities as well as in present appeal - No evidence has been produced by Revenue to show that said goods were not used in manufacture of final product - In this background Rule 3(5B) itself cannot be invoked for recovery of cenvat credit - The primary condition for invoking Rule 3(5B) is non use of inputs/ capital goods on which credit has been taken - The instant case is only of non-payment / waiver of price which the assessee were require to pay to the vendor - This interpretation is also supported by proviso to said rule which clearly indicates that once the goods are used for manufacture of final products or for provision of taxable services, credit can be allowed - It is apparent that recovery provisions for amount recoverable under Rule 3(5B) was introduced only w.e.f. 01.03.2013 - The dispute is for period prior to said date - In these circumstances, notification of Rule 14 to recover these amounts is doubtful - No merit found in impugned order, same is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT
2023-TIOL-1006-CESTAT-DEL
Manaksia Ltd Vs CGST & CE
CX - Appellant, a 100% EOU Depot has taken dealer registration for purpose of passing cenvat credit to buyers - During perusal of cenvat credit passing invoices issued by appellant depot it was found that the depot was passing on incorrect cenvat credit without applying the formula as set out in Rule 3(7)(a) of Cenvat Credit Rules, 2004 with respect to clearances made from 100% EOU - SCN was issued alleging contravention of Rule 3(7)(a) of Cenvat Credit Rules, 2004 and proposing to impose penalty under Rule 15(2) of CCR, 2004 - The appellant being a dealer has not availed or utilized the credit - Further it is also stated that the manufacturer shall be liable to pay penalty - This means that the manufacturer or the service provider who avails the credit wrongly or utilizes the credit wrongly is held liable to pay penalty for such wrongful act - There is no allegation in SCN that appellant availed credit or utilized the same - In such circumstances, the penalty imposed cannot sustain - The impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-1005-CESTAT-ALL
Computer Science Corporation India Pvt Ltd Vs CC, CE & ST
ST - The Appellant is engaged in providing IT support services to its clients in and outside India - The services include installation of customised software, customisation of software to be installed, development of patches/intermediary software which enable smooth operation of the main software, upgradation of software to newer versions; and enhancement/modification of software by opening or closing in-built features of the software - During course of the scrutiny of the records of the appellant it was observed that during the year 2006-07, appellant had received Rs. 19,08,03,156/- from its indigenous clients namely, M/s Sahara Life Insurance Corporation Lucknow, ICICI Prudential LIC Mumbai - They did not paid any service tax on these services provided by them under the category of Management, Maintenance and Repair Services as defined by Section 65(105)(zzg) of the Finance Act, 1994 - Show Cause Notice was issued to the Appellants proposing to raise tax demand under Section 73(1) of the Finance Act 1994, along with interest under Section 75 of the Act and imposition of penalties under Sections 76, 77 & 78 of the Act - On adjudication, the tax demands were confirmed.
Held - The Appellant relied upon series of decisions to argue that the services provided by them are not taxable under the taxable category of " Management, Maintenance and Repair Services " as defined under Section 65(105)(zzg) of the Finance Act, 1994 - It is observed that on the issue of the taxation under category of "Management Maintenance and Repair Services", various benches of tribunal has consistently taken the view that the software maintenance services which are akin to the services provided by the appellant in present case are only taxable from 01.06.2007 - Nothing contrary is available on records - The Appellant has been paying service tax in respect of these services as submitted by the counsel for appellant with effect from 01.06.2007 - Hence there is no merit in the Order-in-Original in question - Hence the tax demands, interest demand and penalties imposed under the Finance Act, 1994, are all set aside: CESTAT
- Appeal allowed: ALLAHABAD CESTAT
2023-TIOL-1004-CESTAT-KOL
R J Tradewings Pvt Ltd Vs CST
ST - The Appellant is an Air Travel Agent book and sell airline tickets for which they receive commission from the Airline concerned. The airline tickets can be booked through Computer Reservation System (CRS) - The Appellant entered into an agreement with M/s. Galileo India Pvt.Ltd., through Amex - The CRS provided by Galileo is an advanced computerized reservation system which works as an interface between the CRS user and different service provider, viz., airlines, hotels car Rental Company, rail road, tour operation or other supplier of other travel relates services included or accessible through the Galileo system - The Galileo CRS provides the user information regarding schedule, fares, availability of air transport and other travel related services and through which reservation can be made and/or tickets issued - It therefore appeared that the said incentive/commission has been given to the Appellant by M/s. Galileo for promoting the business of M/s. Galileo/Amex to work as an interface between the service provider, as aforesaid, and the clients/customers - Thus the said activity of the Appellant appears to be classifiable under ‘Business Auxiliary Service' within the meaning of sub-section 19 of section 65 of Chapter V of the Finance Act, 1994 as amended and service tax at appropriate rate appears to be payable on the commission/incentive so earned by the Appellant in terms of section 66 of the Finance Act, 1994, as amended - Therefore, two show cause notices were issued to the appellant which were adjudicated and it was held that the incentive/commission received by the appellant from M/s.Galileo India Pvt. Ltd. qualify as business auxiliary service under section 65(19) of the Finance Act, 1994 and they are liable to pay service tax - Accordingly, the demand of service tax was confirmed along with interest and penalties were also imposed.
Held - The issue to be decided by us is that whether the incentive/commission received by the Appellant for using CRS service is subject to service tax or not - The said issue has been settled by the Larger Bench of this Tribunal in the case of Kafila Hospitality & Travels Pvt.Ltd. wherein it was held that that incentives paid for achieving targets cannot termed as “consideration” and, therefore, are not leviable to service tax under Section 67 of the Finance Act - Therefore, the incentive/commission received by the appellant from M/s. Galileo India Pvt.Ltd. is not liable to service tax, in terms of section 65(19) of the Finance Act, 1994 - The orders in question merit being set aside: CESTAT
- Appeal allowed: KOLKATA CESTAT |
