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2024 (12) TMI 1362
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....ated enterprises. Further they have also delayed the payment of service tax in violation of the provisions of Point of Taxation Rules, 2012 and had not taken registration for 'Sponsorship' services and Information Technology Software' services. Accordingly, a SCN dated 06.02.2014 was issued for the period from April 2011 to March 2012 demanding service tax and interest. Thereafter, Adjudicating authority as per the impugned order confirmed the demand with interest and penalty. Aggrieved by the said order, present appeal is filed before the Tribunal. 2. When the appeal came up for hearing, the Learned Counsel for the Appellant submitted that the Appellant is an Indian Pvt., Ltd., Company engaged in marketing and distribution of 'Apparel and Garments' under various brands of Levi Strauss & Co and operates through network of distributors and franchises. The Learned Counsel drew our attention to the table describing the various demands confirmed by the Adjudicating authority against the Appellant. Sl. No. Description Amount (Rs.) 1 Demand for Sponsorship Services availed 1,01,86,502 2 Short payment on intercompany services 13,30,558 ....
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....charge basis and the vendors have duly discharged service tax as applicable. The same is evidenced on the basis of the sample invoices enclosed as Annexure 19 to the Appeal Donation 2,00,000 The instant category of services are not subject to Service Tax, since the same does not tantamount to provision of service. Entry Fee for Retail Awards 25,000 The amount pertains to Entry fee paid by the Appellant for participating in Retail Award. Service tax liability in the instant case falls on the service provider under forward charge basis and the vendors have duly discharged service tax as applicable. The Appellant being the service receiver has no liability to pay service tax under Reverse Charge Mechanism (RCM) in whatsoever manner. Event Management Fee 6.61,054 In the instant case the Appellant organizes certain events in relation with their business for which they receive services from event management companies. The liability to discharge service tax on such service is on the service provider under forward charge basis and the vendors have duly discharged service tax as applicable. The Appellant is receiving services from the event management companies an....
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....harge Mechanism (RCM) basis and hence the Appellant had appropriately discharged their liability of service tax under reverse charge mechanism. The same is evidenced as per the challan copies enclosed as Annexure 18 to the Appeal. 5. Thus, the total amount spent by the Appellant under the category of sponsorship fee is only Rs. 2,15,55,828/- and not the consideration of Rs. 8,75,84,325/- as confirmed in the impugned order. The expenses towards the advertisement and promotions, expenses for, etc. cannot be considered under the category of 'sponsorship' services and all these categories are not subject to payment on Reverse Charge Mechanism (RCM). The Learned Counsel also drew our attention to the invoices issued by the service provider in such cases and submitted that as evident from the invoices, service tax was charged by the service providers for availing such services, including the same under the category of 'sponsorship' service and demanding service tax under Reverse Charge Mechanism (RCM) basis from the Appellant amounts to double taxation and prima facie illegal and unsustainable. 6. Learned Counsel further submitted that it was only as per instruction....
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.... trading activities at no stretch of imagination, it can be considered as receipt of any commission. Thus, the demand of Rs. 73,00,732/- under the above category is also unsustainable. The Learned Counsel also submitted that the above said contention was also rejected by the Adjudication authority on the ground that the Chartered Accountant (CA) certificate produced by the Appellant is cryptic and ambiguous. 9. As regards nonpayment of service tax of Rs.2,80,40,921/- on Software License Fee, Learned Counsel drew our attention to the finding in the impugned order, where the Adjudication authority held that in respect of software license and maintenance/support agreements, the parties to the contract are M/s Levi Strauss & Co., and M/s Ray Marks Expert Business System Ltd. The onus on payment of license fee both for new licenses as well as for maintenance and support is on M/s Levi Strauss & Co both in respect of company owned/operated stores as well as for franchises. The Learned Adjudication authority given a finding that there is no privity of contract between the franchises and M/s Ray Marks Expert Business System Ltd., and the assessee's attempt to pass as a mere collection a....
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.... support fee to be paid by the franchises. The Appellant was just acting as a collecting agent and collecting such software license and maintenance support fee from the franchises in India and remitting it back to overseas entity. No invoice raised or received for collection of such remittance and no accounting entries evidencing such transaction have been made in books of account of the Appellant. Thus, even if service tax is payable for such services of maintenance, it should have been discharged by the franchise on reverse charge mechanism and not by the Appellant. The Adjudication Authority wrongly concluded that the appellant has been billing and collecting software license fee for maintenance of Raymark software from the franchise/clients. The learned counsel for the appellant also relied on the decision of this Tribunal in the matter of M/s Global Vision Cable TV Network vs CC, Cochin (2008 (9) STR 58 (Tri. Bang), wherein it is held that the appellant being an agent of this parent company, if collected dues on behalf of the parent company, appellant cannot be held responsible for payment of Service Tax. Thus, the finding of the Learned Adjudication authority that "though the....
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...., service tax of Rs. 58,28,607/- was already deposited by landlords and for Rs. 10,74,075/- the amount represents rent less charged by landlords, who were not liable to register under the service tax registration, since their turnover during the impugned period was below the threshold limit prescribed in this regard. Thus, such amount cannot be recovered from the Appellant. The Learned Counsel also produced a chart evidencing details of payments and the Chartered Accountant (CA) certificate to support the same. Learned Counsel for the Appellant drew our attention to the finding of the Adjudication authority in the impugned order, where it is held that:- 3(vi) Short payment of Service Tax on Renting of Immovable Property : "During the discussion while conducting the audit, it was revealed that the assessee has short paid service tax for Renting of Immovable Property Service as per the Supreme Court directions in Civil Appeal No.8390 of 2011. As per the Court's order the assessee had to deposit 50% of the total service tax liability in three equated instalments within six months, on or before 01/03/2012. As per the details provided by the assessee, their 50% service t....
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....nt had suppressed the facts regarding value of taxable service received with an intent to evade payment of service tax. Learned Counsel further submitted that as per the law laid down by Hon'ble Apex Court in the matter of M/s Anand Nishkawa Co Ltd Vs. CC Meerut (2005) TIOL-118-SC-CX, if any correct information is not disclosed deliberately to evade payment of duty and when facts are known to both the parties, omission by one to do so would not render suppression of facts. Mere failure to declare will amount not amount to wilful suppression. There must be some positive act from the side of assessee to find wilful suppression as per Section 11A of the Central Excise Act, 1994. Similarly in the matter of M/s Padmini Products Ltd Vs. CCE (1989 (43) E.L.T 195 (SC), Hon'ble Supreme Court held that in the absence of any proof of suppression of facts, the longer period of five year would not be applicable and the demand for the duty was sustainable only for normal period of 6 months prior to issue of SCN under Section 11A of the Central Excise and Salt Act, 1944. The Learned Counsel further submitted that the issue involved is legal interpretation and when there is a conflicting view ....
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....yment of service tax, there is no substantial finding given by Adjudication Authority for invoking the extended period of limitation. As per the law laid down by Hon'ble Apex Court in the matter of M/s Anand Nishkawa Co Ltd Vs. CC Meerut (2005) TIOL-118-SC-CX, if correct information is not disclosed deliberately to evade payment of duty and when facts are known to both the parties, omission by one to do so be would not render suppression of facts. Mere failure to declare will not amounts to wilful suppression. There must be some positive act from the side of assessee to find wilful suppression as per Section 11A of the Central Excise Act, 1994. Thus, the impugned order confirming demand beyond the normal period of limitation is unsustainable. 18. As regards nonpayment of service tax of Rs. 1,01,6,502/- under 'sponsorship' services, as per the details furnished by the Appellant, it is evident that major part of the expenses are spent for different services and without considering the nature of service and payment of service tax made by service provider, they was clubbed together to demand service tax under section 68(2) of Finance Act, 1994 by classifying the service ....
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....ere not liable to register under the service tax registration, since their turnover during the impugned period was below the threshold limit prescribed in this regard. However, Adjudication Authority confirmed higher amount on the ground that during the course of audit the assessee could produce only two challans of Rs.41,00,483/- each dated 31.10.2011 and 28.12.2011 and the third challan of Rs.6,49,143/- dated 31.03.2012. But the assessee has failed to produce any challan for the payment of the remaining amount of Rs.34,29,130/-. Since the assessed has not fulfilled the Court's order, they are not eligible for the concession i.e. deposit of 50% of the service tax liability with the department. Hence Adjudication Authority confirmed Service Tax of Rs. 2,45,58,483/- under the above head. We find that there is an omission on the part of appellant and as well as Adjudication Authority to appreciate the facts in right perception. Once the amount is settled as per the order of the Hon'ble Supreme Court, it is not proper to re-open the issue and confirm Service Tax of Rs. 2,45,58,483/-on the ground that there is no evidence produced by the appellant regarding payment of remaining amo....