TaxTMI 
TaxTMI 
2023 (8) TMI 50
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.... provide a comprehensive range of services such as data collection and analysis, manpower mobilization, liaison, training supervision, management consulting, software development etc. Apart from above, they provide services under a consortium arrangement in the capacity of sub-contractor. (ii) The Notice in this case was issued solely based on the audit objection raised by the AG (Orissa) during verification of Income Tax Returns, filed by them for the aforesaid period. The Notice neither states the date of scrutiny of such Income tax returns by the AG (Orissa) nor provides a copy the audit report to them. Purely on the basis of the said audit objection and without causing any independent enquiry to ascertain the correctness of the alleged short payment, the Notice was issued. (iii) The entire demand was barred by limitation. For the Financial Years 2001-02 to 2004-05, the demand is clearly barred by limitation in as much as no allegation of willful suppression, mis-statement, fraud or collusion has been made in the SCN. It is a settled position of law that in the absence of any such allegation in the SCN, extended period of limitation cannot be invoked. In support of this cont....
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.... be set aside. (ix) The demand is unsustainable on merits. The services rendered in the field of deployment of staff, software development, repair & maintenance and public relation etc., cannot be taxed under the category of management consultancy services. Deployment of mobile team, software development, repair and maintenance, and providing public relation service etc. does not come within the ambit and scope of management consultancy service during the material period. (x) Section 65(65) of the Act as applicable during the period in dispute provides that: "'Management or business Consultant' means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organisation in any manner and includes any person who renders any advice, consultancy or technical assistance, relating to conceptualizing, devising, development, modification, rectification or upgradation of any working system of any organisation" Further, taxable service has been defined in Section 65(105)(r) of the Act as: "any service provided to a client, by a management consultant in connection with the management of any organization, in an....
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....SIX & OERC etc., during the period under dispute, cannot be subjected to levy of Service tax in the hands of the Appellant in terms of the legal provisions existed at the material time. The aforesaid services cannot be considered to have been provided to "a client" in as much as the same have been provided to the main contractor engaging the Appellant as a sub-contractor. Thus, the said service provided by the Appellant is outside the ambit of Section 65(105)(r) of the Act. In support of this contention they relied on the decision of the Tribunal in the case of Indfos Industries Ltd. v. Commissioner 2012 (26) STR 129 (Tri.-Del)as affirmed in 2015 (40) S.T.R. 220 (All.). (xvi) The expenditures incurred during execution of job and reimbursed by the customers, is not to be treated as fees and made excisable to levy of Service tax. The reimbursements received by them from its customers are outside the ambit of service tax and is therefore not taxable. (xvii) Providing service to Govt. bodies and World Bank funded projects cannot be subjected to levy of service tax. (xviii) No interest is imposable and no penalty is payable. 3. The Ld. A.R. reiterated the findings in ....
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.... justice. Unless the assessee is put to such notice, he has no opportunity to meet the case against him. This is all the more so when a larger period of limitation can be invoked on a variety of grounds. Which ground is alleged against the assessee must be made known to him, and there is no scope for assuming that the ground is implicit in the issuance of the show cause notice. [See Collector of Central Excise v. H.M.M. Limited, 1995 (76) E.L.T. 497 and Raj Bahadur Narayan Singh Sugar Mills Limited v. Union of India, 1996 (88) E.L.T. 24]. 4. The appeal is allowed and the order of the Tribunal under appeal is set aside. 8. In the case of Collector v. HMM Ltd. 1995 (76) ELT 497 (SC), the Hon'ble Supreme Court has held as under: 2. The assessee contended before the Additional Collector of Central Excise that the show cause notice was time barred under the main part of Section 11A since it was issued after the expiry of the period of six months stipulated therein but the Additional Collector sustained the notice on the ground that it was within five years impliedly holding that the purported action was under the proviso to Section 11A of the Act. There is no dispute that the....
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....e duty and hence it may not have been included in their classification list. But that per se cannot go to prove that there was the intention to evade payment of duty or that the assessee was guilty of fraud, collusion, mis-conduct or suppression to attract the proviso to Section 11A(1) of the Act. There is considerable force in this contention. If the Department proposes to invoke the proviso to Section 11A(1), the show cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the excise department places reliance on the proviso it must be specifically stated in the show cause notice which is the allegation against the assessee falling within the four corners of the said proviso. In the instant case that having not been specifically stated the Additional Collector was not justified in inferring (merely because the assessee had failed to make a declaration in regard to w....
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....b-contract 2,10,000 2,52,000 10,49,478 66,29,939 20,94,636 4. Repair and maintenance 2,83,136 - - - - 5. Payment not received from client - - 5,20,000 - - 6. Software development - - - - 11,50,000 Total 18,94,196 71,16,717 30,80,469 75,68,250 41,29,200 11. For the period 2004-05, the Appellant has received income under four different heads as mentioned above. The liability of service tax on the categories mentioned above are discussed as below: (i) Consulting fee (other than Management consulting) - Rs5,67,322/- The Appellant stated that they provide a comprehensive range of services such as data collection and analysis, manpower mobilization, liaison, training supervision in addition to management consulting. These activities are not liable to be classified under 'Management Consultancy Service'. The impugned order has classified the entire activity under management consultancy and demanded service tax. To levy of Service tax under Management Consultancy service as defined in Section 65(105)(r) read with Section 65(65) of the Act , the following conditions must be satisfied. * Any service either directly or indirectly i....
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....sion of the Hon'ble CESTAT in the case of Indfos Industries Ltd. v. Commissioner 2012 (26) STR 129 (Tri.-Del)as affirmed in 2015 (40) S.T.R. 220 (All.), the relevant para of the decision is reproduced below: 14. Now the argument that they were not the main contractors but were only sub-contractors needs to be examined. This issue whether sub-contractor needs to pay service tax has arisen because of certain clarifications issued by the Board in the early stage of evolution of service tax levy and connected laws. These instructions were issued in view of different factors like, (i) Even prior to the introduction of Cenvat Scheme for service tax, the policy of the government was to tax the same service only once, that is in the hands of the main person providing the service. There was no intention to tax the same value twice in the hands of two different parties rendering different part of the same service. This situation is most aptly demonstrated by the service rendered by a stock broker and that rendered by a sub-broker to a broker. Sub-broker receives payment from the brokerage charged by the broker who was already paying tax on the full brokerage. Similar was the situat....
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....with reference to the definition the concerned taxable service at the relevant period of time and the activities carried out and the contract governing such activity. Some of the case laws quoted do not discuss any provision of any statute to come to the conclusion that there shall be no levy of service tax on sub-contractors. In fact the decision in Semac Pvt. Ltd v. CST - 2006 (4) S.T.R. 475 (Tri.-Bang.) is given considering that the main contractor had paid tax for the full value. However the policy that if the main contractor has paid service tax, the sub-contractor need not pay tax again on the same service, for periods prior to introduction of Cenvat Scheme is reasonable and acceptable based on the Board's Circulars, for maintaining equality before law. In this case no argument is raised that the main contractor namely, HAL has discharged service tax liability. But if evidence is produced to that effect the demand on the sub-contractor is not maintainable. 16. The argument that they can claim an exemption at any stage of the proceedings is now settled because of the decision of Apex Court in Share Medical Care v. UOI - 2007 (209) E.L.T. 321. The Commissioner (Appeal) has er....