TaxTMI 
TaxTMI 
2019 (3) TMI 976
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....their Service Tax as well as liability on the Service such as commission and profit earned together is a consideration. C. The Appellants failed to pay Service Tax (i). on the input services availed by them from various vendors who are providing services like Housekeeping, repairs and maintenance, carried out and works contract etc. under reverse charge mechanism. (ii). on the manpower subject to METCO during the period 2008- 2012. (iii). on Telephone Bills, which are on the personal names of the Assessee employees which is not an input services for the period 2008-09 of 2012-13. (iv). on the directors' sitting fees under business auxiliary service during the period 2009-13. D. The appellants took credit of Cenvat as well as State VAT during the period April 2012 to August 2013 and on input services provided to J &K branches which falls under the exempted territory during the period 2008-09 to 2013-14. 2. The Show Cause Notice was adjudicated by Commissioner of Service Tax, Pune vide order in original PUN-SUTAX-000-COM-048-15- 16 dated 20.01.2016 and confirmed most of the demand raised therein and dropped a few. Moreover, the commissione....
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.... Learned Counsel for the Appellants submits that they have accepted objection during the audit itself and paid alongwith interest. Therefore no penalty be imposed. 3.3. Service Tax payable in respect of manpower subject to METCO (Rs.5,16,041): Learned Counsel submits that the Appellants have only deputed their employees to their subsidiary and got reimbursed the actual salary paid to them. In view of the following case law the demand is not maintainable. (i). Commissioner Vs Krohne Marshall Pvt. Ltd. 2016 (11) TMI 831 (SC) (ii). Arvind Mills Ltd. 2014 (4) TMI 132 (Guj) (iii). The Axis Bank Ltd. 2017 (1) TMI 607 (Mum) 3.4. Cenvat Credit availed on services rendered to J & K branches: The Appellants submits that they have two branches in the state of J & K; they reversed the proportionate by considering the income from these two branches. Reversal was made on 31.03.2011 from 01.04.2011, 50% on Cenvat credit has been reversed by the Appellants bank under Rule 6 (3B) of Cenvat Credit Rule 2004, which over writes the other rules relating to proportionate reversal. The Appellants submitted a CA certificate for the year 2009-2010 - 2010-2011. However the learned commissione....
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....he demand alongwith interest. With reference to manpower recruitment and supply, he submitted that tribunal in the case INA Bearing India Ltd. Vs CCE 2018-10-GSTL-376-Tri-Mum, on same set of facts, has distinguished the decision in the cases of Arvind Mills Ltd and Paramount Communication. 5.1 Coming to review proceedings, he submitted that as per board circular dated 19.12.1999 the adjudicating authority has become functus officio when the order is issued. Therefore, addition of finding of time barred for 2007-08 to 2009-10 in corrigendum is not proper. Corrigendum can be issued only for clerical/arithmetical/typographical error. However, ST3 returns for October 9 to March 10 was issued on 25.04.2010. Therefore the demand for the said period i.e. October 9 to March 10 should have been included as the Show Cause Notice was issued on 24.04.2015. 5.2 Coming to the interest earned by the bank on its loans and advances, the Appellants submitted that it is a consideration received for its taxable services "lending" and it is not towards any exempted services. However the amount is not part of the value u/s 67 it cannot be called exempted services. The learned AR submits that the c....
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.... Whether the Appellants are required to pay service tax on the directors' sitting fees. vi) Whether the commissioner was correct in levying penalty in respect of demands where payments have been made along with interest prior to the issue of show cause notice. 6.1 Coming to the first issue of whether the Appellants are required to reverse proportionate Cenvat credit and as to whether interest etc. earned by them from cash credit, overdraft, etc. would be treated as exempted service. The Appellants submitted that in terms of section 67 of the Finance Act, 1994 the interest on loans was not includable in the value of taxable service upto 17.04.2006. As per sub- section 4 of section 67 of Finance Act 1994, the value of taxable services has to be determined in terms of Service Tax (Determination of Value) Rules, 2006. As per Rule 6 (2) (iv) the interest on loans has to be excluded from the taxable value. The Appellants submitted that irrespective of notification exempting the interest the service cannot be treated as an exempted service. The lending service which includes ODCC and bill discounting is a taxable service. However for calculating taxable value interest is to be deduc....
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....d July 01, 2009. The Tribunal has given a clear finding as follows: "7.4 From the above mentioned Master Circular issued by RBI, it is quite evident that banks are free to determine their own interest rate after taking into account all the administrative expenses and the cost of advancing the loans, cash credit or overdraft facility. However all the purpose of the customer, or the bank financial institution all the recoveries made against such facilities would be classified under the category of interest. It is not the case after deregulation of the Banking and Financial services that the interest rates are externally dictated, but are to be determined by the banks themselves taking into account their cost of funds, transaction costs etc (Para 4.1 of the Master Circular). Thus the claim of the Appellant in respect of administrative fees etc., charged by them separately in respect of the CC/ OD services appear to be contrary to the said Master Circular." In view of the above it is seen that the Banks are free to decide the interest after taking into consideration administrative expenses if any. In view of the above we don't find merit in the Appellants argument that interest i....
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....ted services = (M/N) multiplied by P, where (M) denotes total value of exempted services provided plus the total value of exempted goods manufactured and removed during the financial year, (N) denotes total value of (output) and exempted services provided, and total value of dutiable and exempted goods manufactured and removed, during the financial year, and 1(P) denotes total CENVAT credit taken on input services during the financial year;" In view of the above, we come to the conclusion that the services rendered by the Appellants in advancing loans etc. are exempt. Therefore, the amount of interest earned in advancing of loans needs to be taken into consideration while determining the amount to be reversed in term of Rule 6(3A)(c) of the CENVAT Credit Rules, 2004. Hence, we do not find any infirmity in the impugned order passed by the commissioner. We find that such a view is in conformity with decision of the Kolkata Bench of Tribunal in case of UCO Bank Vs Commissioner of Service Tax Kolkata (Supra) and these bench in the case of HDFC (Supra). 6.4 Coming to the leviability of Service Tax on the Appellants on the alleged supply of manpower to their subsidiary we find that....
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.... submitted on 02.08.2012 itself. MCM was conducted as late as 27.12.2013 Show Cause Notice was issued on 24th April, 2015 much later than the date on which facts were known to the department. They further submitted that as held by Supreme Court in the case of Chennai Petroleum Corporation Ltd (Supra), they being a public sector undertaking allegation of suppression fraud etc cannot be alleged. The commissioner has only given a cursory findings that the necessary information was not given in the ST-3 returns. We are not able to come to a conclusions on this aspect on the basis of the submission of the Appellants also. We find that at this juncture this bench is not in a position to decide whether all the material information was disclosed to the department and as to whether the necessary information was contained in the ST-3 returns submitted periodically or otherwise. We are not inclined to give a carpet ruling that since the Appellants are public sector undertaking suppression of facts cannot be alleged. The issue depends on case to case basis. Therefore we find that this issue also needs to be looked into again by the adjudicating authority. 6.8 Coming to the submission of the....