2024 (4) TMI 824

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....appellant and Shri S.K. Meena, learned authorised representative for the department and perused the records. 3. The appellant provides real estate consultancy and was registered with the service tax department for providing "Real Estate Agent Services". It was also availing during the relevant period, Cenvat credit under Cenvat Credit Rules, 2004 [CCR] It's records for the period 2006-2007 to 2009-2010 were audited by officers of the service tax commissionerate who felt that the appellant had: a) wrongly availed Cenvat credit of the service tax paid on the medical insurance of its employees and their families; b) incorrectly calculated and reversed under Rule 6(3) of CCR an amount which was less than what was to be reversed; c) short paid interest on service tax paid on transactions related to associated enterprises; and d) had not paid service tax on certain services imported by it viz., legal fees, global website cost sharing, allocated share of annual premium for indemnity insurance. 4. The SCN dated 01.02.2012 was issued to the appellant proposing to demand and recover service tax and the alleged short reversed amount under Rule 6(3) wi....

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....,15,14,385/- for the period 2008-2009 to 2010-2011 on the ground that the reversal of Cenvat credit under Rule 6(3) was wrongly calculated 10. The demand of Rs. 1,15,14,385/- for the period 2008-2009 to 2010-2011 was confirmed on the ground that the appellant had short reversed the Cenvat credit under Rule 6(3) by wrongly reversing the amount based on the "amounts received for providing exempted services" instead of reversing on the basis of "the value of exempted services provided". 11. According to the appellant all their exempted services were rendered to SEZ units and in Rule 6 of CCR, 2004, sub-rule (6A) was inserted by notification no. 3/2011-CE (NT) dated 1 March 2011 with retrospective application since 10.2.2006. This excluded the services provided to SEZ areas from the requirements of reversal of Cenvat credit under Rule 6 (3). Therefore, according to the appellant, the demand on this count needs to be set aside. Reliance is placed on SIFY Technologies Ltd. versus Commissioner of C. Ex. & ST, LTU, Chennai [2011(21) STR 252 (Tri-Chennai)] 12. The Commissioner agreed with the above legal position but declined to allow the benefit stating that during audit, the appe....

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....pted services and the amounts received from them were examined, if the Commissioner doubts that the receivers of service were SEZs, he must have some basis to say so. Nothing to the effect is coming out of the order. 15. We, therefore, find it proper to remand this part of the demand to the Commissioner with a direction to examine the invoices and record if the exempted services in question were rendered to units in SEZ or not and accordingly, re-calculate the demand, if any. Short payment of interest on late paid service tax on services received from an Associated Enterprise from outside India 16. The appellant received services from its Associated Enterprises viz., CBRE Inc., from outside India in March 2008. It paid for these services in August 2008. The undisputed legal position is that the appellant was required to pay service tax on reverse charge mechanism on the services rendered to it by its Associated Enterprise M/s. CBRE, Inc. It had paid CBRE for the services in August 2008 but paid service tax on the value of this service only in July 2011 along with interest. 17. On 10 May 2008, Rule 6 of the Service Tax Rules, 1994 was amended and an Explanation was inser....

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....on being given retrospective effect but in the absence of any such stipulation, all laws should be treated as having only prospective effect. We, therefore, respectfully follow the decision of a coordinate bench in Sify Technologies and hold the amendment dated 10.5.2008 was only prospective and it does not apply to services rendered and accounted for prior to this date. Therefore, for the past transactions, the liability to pay service tax fell on the appellant only in August 2008 when it paid its Associated Enterprise and interest was correctly calculated and paid from August 2008. No interest was payable from 10.5.2008 to August 2008. The demand on this head needs to be set aside and we do so. Non payment of service tax on certain imported services 23. The demand on this count is on three types of services (a) Allocated share of annual premium for indemnity insurance; (b) Legal fees for obtaining visa; and (c) Cost sharing of the global website. 24. Of the above, learned counsel submitted that they are not pressing on the third service related to cost sharing of global website. Regarding the indemnity insurance, its parent company abroad obtai....

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....llant paid to a company outside India, some legal fees to obtain visas on which it was liable to pay service tax under the head "support service for business or commerce'. 29. The case of the appellant is that legal service was not covered under 'Support Service for Business of Commerce" under section 65(104c). Service tax on legal service was introduced only from 1.9.2009. It had paid the amounts for the period August 2008 to September 2008 when it was not taxable. The department has incorrectly considered it as a service rendered during 2009-2010. 30. Since this issue requires verification of facts, we find that this also needs to be remanded to the Commissioner for verification of facts and determining the service tax payable, if any. 31. In the factual matrix of this case, considering that we have already found in favour of the appellant with respect to most demands, we set aside all penalties under section 80 of the Finance Act. 32. In view of the above we partly allow, partly reject and partly remand the appeal and modify the impugned order as follows: (a) The denial of Cenvat credit of Rs. 44,19,319/- service tax paid on medical insurance of employees an....