TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 141
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....ue of taxable service. This demand pertain to the period from May 2006 to March 2010. Appropriate interest on the above demand, under Section 75 of the Finance Act, 1994 and a penalty equal to the tax amount under Section 78 of the Act have also been confirmed in the impugned order. Further, CENVAT credit of Rs.5,27,64,905 availed by the Appellant during the period from 2006-07 to 2009-10 on various input services such as, architect services, consulting engineering services, management consultant services, commercial or industrial construction services, etc. has also been disallowed on the ground that as a result of these services, what emerges is the immovable property in the form of Hotel and hence such CENVAT credit is not admissible. In this connection, the Commissioner has also relied on CBEC's Circular No. 98/1/2008 dated 04.01.2008, wherein it has been clarified that such services relating to construction of immovable property are not entitled for credit, as neither any excise duty nor any service tax was paid on such immovable property. The Assessee contented that upon construction of the Hotel, the same would be used to provide various taxable services, such as Mandap Keep....
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....lso similar demands have been set aside after considering relevant provisions of Income Tax Act and precedent judgments. In this case, the demand was also set aside on the ground of limitation, as the issue is wholly interpretational and litigative; appropriate Service Tax has already been paid and the demand is only on the TDS portion. 3. Per Contra Shri V.R. Pawan Kumar, the learned Authorized Representative for the Department, has referred to Section 67 of the Finance Act, 1994 and Rule 7 of the Service Tax (Determination of Value) Rules, 2006 and contended that the withholding tax paid by the Appellant shall also form part of the consideration. He argued that the tax deductor is bound to furnish Form 16A to the service provider and file quarterly return. He also referred to Section 90 and 91 of the Income Tax Act and submitted that the income earned by the foreign service provider is prima facie liable to Income Tax in India and subject to the Double Taxation Avoidance agreements, if any; if tax is paid in one country the income would be exempted in another country. He also relied on the decision of the Tribunal in the case of Sheladia Rites v. CCE - 2019 (27) GSTL 707 Tri-Hyd....
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....In his rejoinder, the Counsel of the Appellant submitted that, the decisions relied on by the opponent counsel are in the context of 'input' whereas the present dispute is on 'input services' which is covered in favour of the Appellant in various decisions cited supra. He also submitted that, in so far as the service providers are concerned, the CENVAT Credit rules have been framed under Section 94 of the Finance Act, 1994 and the reference to Section 37 is unwarranted. 8. We have carefully considered the arguments advanced before us by both sides and also perused the case records. 9. With regard to the issue of Service Tax liability on the withholding tax component, it is true that, the issue is covered in favour of the Appellant in various decisions relied upon by the learned counsel for the Appellant. However, it is observed that, the issue as to how the withholding tax paid in India would be treated by the Foreign Service provider, while determining his tax liabilities, has not clearly come out in those decisions. In TVS Motor Company supra, after referring to the provisions of the Income Tax Act and various precedent decisions, it has been held as below. 14.5 The above dec....
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....earned Departmental Representative, are distinguishable. The definition of the term "input" has been amended from 07.07.2009 so as to specifically exclude the goods used for construction of immovable property from the scope of "inputs", whereas there is no such restriction in the definition of "input service". 10.1 In Lemon Tree Hotel v. CCE-2018-(10)-GSTL-241-Try- Hyd., this Tribunal has held as below. "7. It is undisputed that the services are utilized for brining to existence building which is used by the appellants for hospitability business and is used for rendering output services like mandap keeper and health club and fitness centre and dry cleaning service and internet cafe services. It is an unimaginable that a hotel can render these services without a building in its place. In our considered view, the input services are availed by the appellant in respect of Works Contract Services, Project Management Services and Architectural Professional Services used for construction of a building, which subsequently is put into use for rendering taxable output services. We find that the adjudicating authority was in error to rely upon the Board Circular No. 98/1/2008-S.T., dated 4....
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....(supra) the ratio is in paragraph No. 7, 8 & 9 which we with respect reproduce : 7. It is not disputed that jetty was constructed and input credit was claimed on cement and steel. The aforesaid definition of Rule 2(k) was applicable and Explanation 2 did not provide that cement and steel would not be eligible for input credit. According to learned Counsel for the appellant, the appellant is not manufacturer and, therefore, the provisions of Explanation 2 of Rule 2(k) would be applicable only to the factory and manufacturer. The appellant is neither having any factory nor he is manufacturer. The appellant is a service provider of port. We need not go into this question as to whether the appellant is a factory or manufacturer or service provider in view of the fact that it is not disputed by Mr. Y.N. Ravani, learned counsel appearing for the Revenue in this Tax Appeal that the appellant provides service on port for which he is getting jetty constructed through the contractor and the appellant has claimed input credit on cement and steel. The cement and steel were not included in Explanation 2 from 2004 up to March, 2006. The Cenvat Credit Rules, 2004 were amended in exercise of the....
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....t will be new amendment and cannot be treated to be clarification of particular thing or goods and/or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited v. Union of India and Others, reported in (2011) 11 SCC 408 = 2011 (266) E.L.T. 145 (S.C.) would not be applicable to the facts of the instant case. 9. Mr. Ravani has also vehemently urged that since jetty was constructed by the appellant through the contractor and construction of jetty is exempted and, therefore, input credit would not be available to the appellant as construction of jetty is exempted service. The argument though attractive cannot be accepted. The jetty is constructed by the appellant ....