https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=760747 https://www.taxtmi.com/caselaws?id=760747 Levy of service tax on Business Support Service - Denial of CENVAT Credit on club membership renewal fees in terms of Rule 2(l) of the CENVAT Credit Rules, 2004 - Suo-Moto recredit to the CENVAT account taken on account of service tax paid twice or in excess of the service tax liability done without documentary evidence as prescribed under Rule 9 of the CENVAT Credit Rules, 2004 - Imposition of penalty for non-payment of Service Tax under the category of Intellectual Propery Service other than copyright - time limitation. Levy of service tax on Business Support Service - HELD THAT:- The appellant and EPML were operating in two completely different products and were catering to two completely different sets of customers. As such, EPML could not have outsourced the activities of evaluation of prospective customers, processing of purchase orders and fulfilment of services to the Appellant, as alleged in the impugned Show Cause Notice. Moreover, the exports were not being made by the appellant to its own goods and accounting of the same was made in the books of the appellant only. It is an admitted position in the impugned order that none of the parties were undertaking the export of goods manufactured by the other. Therefore, by exporting its own goods, the appellant has not provided any kind of support service to EPML, but the same is to themselves only. The appellant was not undertaking the activity of evaluation of prospective customers, processing of purchase orders or fulfilment of service as the Appellant and EPML were dealing in varied products and were catering to varied customers - the activity of export of goods by the appellant through their group company viz. EPML cannot be termed as business support service . Therefore, on merit, the appellant is not liable to pay Service Tax under the said category. Accordingly, the demand of Rs.1,54,77,549/- under the category of Business Support Service , is dropped. Denial of CENVAT Credit on club membership renewal fees in terms of Rule 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT:- In this case, the charges paid by the Appellant were towards corporate club membership which were used for organising meeting with various stakeholders viz., promoters, distributors and vendors in order to carry out sales promotion activities - the appellant is entitled to avail CENVAT Credit on club membership renewal fees. Hence, the CENVAT Credit of Rs.82,400/- cannot be denied to the appellant. Suo-moto recredit to the CENVAT account without documentary evidence - HELD THAT:- The the appellant is entitled to avail CENVAT Credit on club membership renewal fees. Hence, the CENVAT Credit of Rs.82,400/- cannot be denied to the appellant. Imposition of penalty for non-payment of Service Tax - HELD THAT:- The appellant has paid the entire amount of tax along with interest before issuance of the Show Cause Notice upon being pointed out by the audit. In these circumstances, no penalty is imposable on the appellant. Accordingly, the penalty of Rs.1,49,822/- imposed against the appellant is dropped. Time limitation - HELD THAT:- The fact is noted that periodical audits took place from time to time, at the premises of the appellant. Therefore, the Show Cause Notice issued on 15.12.2016 for the period 2011-12 is barred by limitation. Hence, the appellant also succeeds on the ground of limitation. The impugned order is set aside - appeal allowed. Case-Laws Service Tax Thu, 24 Oct 2024 00:00:00 +0530