TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Appellants' Service Tax Liability Appeal: Penalties & Demands Set Aside</h1> The appellants, registered under the Service Tax Department, faced issues regarding service tax liability in multiple categories and reversal of CENVAT ... Penalty - Service Tax under Information Technology Software Services paid on being pointed out - Reversal of CENVAT Credit availed on Management, Maintenance or Repair Services on being pointed out - HELD THAT:- As per Sub-Section 3 of Section 73, when the service tax amount along with interest is discharged prior to the issuance of Show Cause Notice, no penalties are required to be imposed. In fact, no Show Cause Notice even can be issued by the Department - Penalties unwarranted and is set aside. Management or Business Consultancy Services - reverse charge mechanism - demand of service tax - Revenue neutrality - HELD THAT:- Indeed, since the demand is under reverse charge mechanism, if the tax is paid, the appellant would be eligible to avail the Credit as input service. The demand is entirely invoking the extended period of limitation. Therefore, being a revenue neutral situation, demand do not sustain. Manpower Recruitment or Supply Agency Services - demand of service tax - extended period of limitation - HELD THAT:- The demand is entirely invoking the extended period - reliance placed in the case of M/S. COROMANDEL INFOTECH INDIA LTD. VERSUS THE COMMISSIONER OF G.S.T. & CENTRAL EXCISE, CHENNAI SOUTH COMMISSIONERATE [2019 (1) TMI 323 - CESTAT CHENNAI] - demand do not sustain. Appeal allowed - decided in favor of appellant. Issues:1. Service tax liability under various categories - IT Software Services, Management Consultancy, Manpower Recruitment Services2. Reversal of CENVAT Credit on Maintenance Services3. Applicability of penalties when tax amount is discharged before Show Cause Notice issuance4. Revenue neutrality in demand under reverse charge mechanism5. Extended period applicability in demand for Manpower Recruitment ServicesAnalysis:1. The appellants were providing IT-related solutions and were registered under Service Tax Department. Officers found non-payment of service tax under different categories and wrongly availed credit. Show Cause Notice was issued for the period from June 2005 to March 2009, leading to penalties and demands confirmed by the Original Authority.2. Penalties and Tax Discharge: The appellant did not contest liability for certain issues and had paid/reversed the amounts before the Show Cause Notice. Citing Section 73(3), the appellant argued against penalties, supported by a Tribunal decision. The Bench agreed, setting aside penalties based on legal precedents.3. Reverse Charge Mechanism: The demand under reverse charge for Management Consultancy Services was challenged as revenue neutral, eligible for input service credit. The Bench, considering the revenue neutrality and a legal precedent, set aside the demand.4. Manpower Recruitment Services: The demand under this category invoked the extended period, with conflicting views in past decisions. The appellant argued against an intention to evade payment due to differing interpretations. Citing a relevant case, the Bench set aside the demand, applying the principle of conflicting views and the extended period.5. Department's Arguments: The Department supported the original findings, emphasizing the applicability of a specific case to the present situation. However, the Bench considered the arguments and legal precedents cited by the appellant, ultimately allowing the appeal with consequential reliefs.This detailed analysis of the judgment showcases the legal arguments, precedents, and considerations made by the Bench in deciding the various issues raised in the case.
TaxTMI 
TaxTMI 
