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One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=759249 https://www.taxtmi.com/caselaws?id=759249 Levy of service tax - operation and maintenance repair of the Ropeway - Activity of maintenance of the battery-operated vehicle and existing road train and prevailing track in the Science City Authority - Operation and maintenance of external coal handling system - Service tax under Reverse Charge Mechanism on Rent a cab, Security Service, Works Contract Service, Manpower Recruitment Service Legal Services - Demand of service Tax on the operation and maintenance repair of the Bridge at Jaleswar - Denial of CENVAT Credit utilized for discharging the Service Tax Liability - non-payment of service tax on advances - Reversal of CENVAT on account of non-payment to supplier/contractor. Operation and maintenance repair of the Ropeway - HELD THAT:- It is observed that the appellant was awarded the right to operate and maintain the ropeway for which a license fee was paid to the respective state governments. A perusal of the agreements executed by the appellant with the respective state governments clearly reveal that the appellant operated the Aerial Ropeway by charging value of tickets from the riders of the ropeway. They paid yearly license fee at specific rate to the respective governments of Sikkim and Jharkhand. Rest of the money earned is appropriated by them for operation and maintenance of the said Ropeway - the appellant has rendered the service of transportation of passengers by Rope Way, which has been specifically exempted from payment of service tax. The activities undertaken by the Appellant by way of transportation of passengers by ropeway was not taxable under any of the category under the positive list and was exempted under Serial No. 23(c) of N/N. 25/2012 ST dated 20.06.2012, under the negative list regime - the demands of service tax confirmed on this count are not sustainable. Activity of maintenance of the battery-operated vehicle and existing road train and prevailing track in the Science City Authority - HELD THAT:- The appellant was entrusted with the task to collect money from the visitors by selling tickets and giving a part of it to Science city authority as royalty. Thus, the money has been collected only for allowing the visitors in to the science city, which is not a taxable service. The said activity was not taxable under any of the category under the positive list and was exempted under Serial No. 23(c) of Notification No.25/2012-ST dated 20.06.2012, under the negative list regime. Accordingly, the demands of service tax confirmed on this count in the both the orders is not sustainable. Operation and maintenance of external coal handling system - HELD THAT:- The activities of the appellant relating to transportation of coal in a specific manner and at a specific point cannot be considered as infrastructural support and maintenance services. In this regard, reliance placed on the Board Circular No. 232/2/2006 CX 4 dated 12.11.2007, wherein it has been clarified that if transportation of coal is undertaken by mechanical systems, such as ropeway system, no service tax would be chargeable. It is further observed that the appellant started paying service tax w.e.f. 01-07-2012 on the entire activity undertaken by them and have paid Rs.42,95,835/-(through Cash of Rs.36,36,634 and CENVAT Credit of Rs. 6,59,201] out of the total demand of Rs.54,12,061/-. However, the adjudicating authority failed to adjust this amount against the demand confirmed. Since there is no service tax payable for the period prior to 01.07.2012 and appropriate service tax has already been paid by the appellant for the period after 01.07.2012, there is no further liability on the appellant. However, the issue is remanded back to the adjudicating authority for verification and confirmation of payment of Rs.42,95,835/- as claimed by the appellant. Service tax under Reverse Charge Mechanism on Rent a cab, Security Service, Works Contract Service, Manpower Recruitment Service Legal Services - HELD THAT:- The appellant claimed that they have already paid the total amount of Service Tax of Rs. 1,45,860/- along with interest of Rs. 44,853/-. It is observed that there is no suppression of facts in this case and the intention to evade payment of tax has not been established. Since the entire demand confirmed in the impugned order is paid along with interest, no penalty imposable on the appellant. Accordingly, the penalty equal to the tax confirmed on this count is set aside. Demand of service Tax on the operation and maintenance repair of the Bridge at Jaleswar - HELD THAT:- It is observed that the said service related to maintenance of bridges and thus are exempted from payment of service tax. Accordingly, the demand confirmed on this count is set aside. Denial of CENVAT Credit utilized for discharging the Service Tax Liability - non-payment of service tax on advances - Reversal of CENVAT on account of non-payment to supplier/contractor - HELD THAT:- It is observed that the appellant has not produced the relevant documents earlier. Now, they claim that they have the documents with them readily and if the issue is remanded back to the adjudicating authority, they will be able to explain the issue. Accordingly, these issues are remanded back to the adjudicating authority for the purpose of verification of the documents and pass an appropriate order regarding eligibility of the credit. Appeals disposed off. Case-Laws Service Tax Tue, 24 Sep 2024 00:00:00 +0530