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2023-TIOL-1144-CESTAT-CHD
Channel Management And Marketing Vs CCE
ST - Appellants are engaged in business of collection of all the fees/dues payable to T.V Channels by cable operators as per contract, with their principals M/s SETD, on their sole cost and expense besides promoting and marketing on behalf of T.V Channels - It was alleged that principals have discharged duty whereas the appellants were under obligation to discharge the same - Contrary to findings of impugned order that appellants have not submitted proof of payment of duty by M/s SETD, SCN is categorical in stating that disputed tax stands paid albeit by M/s SETD - It is clear that M/s SETD have discharged service tax payable by Agent - Payment of service tax into Revenue Exchequer is not in dispute - What is in dispute is who has to discharge the service tax liability - Service tax having been paid, though, by principal on services rendered by appellant, it cannot be a case of non-payment of applicable service tax - Once service tax is paid, there is no loss to revenue of Government, the question as to who has paid the same, remains a procedural issue and thereto, an empty one - Appellants have kept the Department informed of the fact that applicable service tax is being paid or has been paid by their principals i.e., M/s SETD - Therefore, there are cogent reasons for appellant to believe that they are not obliged to pay service tax again; therefore, ambiguity in the minds of appellant is a bona fide one - Therefore, extended period cannot be invoked - Apex Court in case of M/s Northern India Operating System 2022-TIOL-48-SC-ST-LB relied upon by appellants also, find that extended period is not invocable - Thus, no case has been made for invocation of extended period - Therefore, appeal succeeds both on merits and limitation: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-1143-CESTAT-DEL
Balaji Medical And Diagnostic Research Centre Vs Pr.CCGST
ST - Non-payment of service tax on 'Notice Pay' recovered from ex-employees - Demand for an amount of Rs. 6,29,329/- has been confirmed with respect to 'notice pay' received by the appellant - Being aggrieved, the appellant is before the Tribunal. Held: Issue stands already decided by this Tribunal, Principal Bench vide order dated 14.01.2022 in Appeal No. 53020 of 2018 title as M/s Rajasthan Rajya Vidhyut Prasaran Nigam Ltd. = 2022-TIOL-134-CESTAT-DEL - Held therein that any compensation paid is not a consideration for the contract; that compensation for failure under a contract is NOT consideration for service under the contract; that order upholding confirmation of a demand of service tax on the notice pay received/recovered by the appellant from its employees for premature resignation cannot be sustained and needs to be set aside - No reason to differ with those findings - Order set aside and appeal allowed: CESTAT [para 5, 6]
- Appeal allowed: DELHI CESTAT
2023-TIOL-1142-CESTAT-KOL
Mahanadi Coalfields Ltd Vs CCGST & CX
ST - The Assessee-company has been granted the lease of mines by the Central Government - In terms of Section 2 of the Forest Conservation Act, 1980, the Assessee is required to obtain clearance from the State Forest Department so that forest land can be diverted for non-forest purpose - Mining is one of the activities constituting non-forest purpose as per the aforesaid Forest Act - For the purpose of diversion of forest land and consequential loss of benefits accruing from the forests, the Assessee is required to make payment of Net Present Value (NPV) of such diverted land so as to utilize the said amount for getting back in long run the benefits which are lost by such diversion - The underlying principle for recovery of NPV is that the plantations raised under the compensatory afforestation scheme could never adequately compensate for the loss of natural forests as the plantations require more time to mature and even then, they are a poor substitute to natural forest - The object of amount of NPV is to utilize the fund to conserve the ecology without in any manner affecting proprietary rights of the State Government over the land, timber or the minerals - The payment of NPV is purely for protection of environment and not in relation to any propriety rights - Campa Fund has been created having regard to the principles of intergenerational justice and to undertake short term and long-term measures - The Departmental officers contended that such payment of NPV to Govt. of India, appeared to be in lieu of Declared Service of toleration of the act of use of forest land for non-forest purposes rendered by Government and attracts service tax under reverse charge mechanism in terms of Notification No.30/2012-Service Tax dated 20.06.2012, which the Appellant failed to discharge - A Show Cause Notice dated 04.10.2021 was issued to the Assessee demanding service tax of Rs. Rs.89,58,060/- (Incl. Cess) for the period April 2016 to June 2017, along with interest and penalty - The said Notice was adjudicated by the Commissioner, Rourkela vide Order-in-Original dated 28.03.2022, wherein he confirmed the demand of service tax made in the Notice along with interest and imposed equal amount of tax as penalty - Hence the present appeal. Held - This Tribunal has decided the same issue in respect of Appellant's own case, in respect of another unit located at 'Orient Area' vide Final Order No. 76176/2023, wherein the proceedings initiated by the Department on the same has been dropped - It is observed that the facts of the present appeal are similar to that of the decisions cited above - Relying on the above decisions, we hold that the clearance granted by Ministry of Environment, Forest and Climate Change for usage of the forest land falling under the said project for non forest purposes, cannot be considered as a 'Declared Service' as defined under Section 66E(e) of the Finance Act, 1944 and the charges of NPV paid by the Appellant cannot be considered as 'Consideration' for the said service - Accordingly, it is held that the demand of service tax along with interest, in the impugned order is not sustainable - It is observed that the Appellant has not suppressed any information from the Department - In fact the entire NPV was paid to the CAMPA Fund as per law - Hence, extended period cannot be invoked to demand Service tax - As there is no suppression established, penalty under Section 78 of the Finance Act, 1994 not imposable in this case: CESTAT + the Revenue has considered the clearance granted by Ministry of Environment, Forest and Climate Change for usage of the forest land falling under the said project for non forest purposes, as a 'Declared Service' and the charges of NPV paid by the Appellant as 'Consideration' for the said service and demanded service tax under Reverse Charge. The allegation of the Revenue is that the payments made to CAMPA Fund is for the purpose of toleration of an act or a situation. In the present case the act of the Appellant tolerated by the Government is the act of conversion/diversion of forest land and use of the same for non forestry purposes and consideration has been paid for the purpose of tolerating the mining activity by the Government. And for such act of toleration by the Govt., the appellant have paid compensatory levies/charges to CAMPA Fund which is being administered under the aegis of Central Government. Accordingly, the impugned order justified the demand and confirmed the same; + the payment of NPV to the CAMPA Fund has been made by operation of law and the Appellant has no choice whatsoever. Thus, the amounts paid cannot be called as 'consideration' by any stretch of imagination, for the alleged 'service'. Furthermore, the Government is duty bound by the Constitutional Mandate (Article 48 of the Constitution of India) and by the Parliament (The CAMPA Act, 2016, Forest Conservation Act 1980) to collect the charges for granting diversion of forest land for non-forest purposes like mining to preserve, conserve and regeneration of lost ecological balance; + when a patch of forest is diverted for non-forestry purposes, its implications are felt at various spatial and temporal scales on account of possible loss of natural resources of the country. While developmental activities are essential for economic growth of the country, at the same time it is necessary to ensure that this development does not come at the cost of India's invaluable natural capital, particularly the forests. Therefore, a payment in the form of Net Present Value, Compensatory Afforestation Charges and other such site specific charges are required to be paid to make good the damage caused by such user agency. In the process, application for non-forestry use of forest land is made by the user agency to Ministry of Environment & Forest, Govt. of India, and final approval for such non forestry use of such forest land is given by Ministry of Environment & Forest, Govt. of India, on payment of specified charges as mentioned above and after receiving recommendation of the concerned State Government.
- Appeal allowed: KOLKATA CESTAT |
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