TaxTMI 
TaxTMI 
2025 (2) TMI 419
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....rd for the input services used for provision of taxable as well as exempted services. The Appellant did not reverse the CENVAT Credit attributable to exempted services as the applicability of Service Tax was new to the Appellant. After getting the SCN, they computed the amount of credit attributable to exempt service and paid a sum of Rs.10,26,482/- by way of reversal and paid a sum of Rs.14,75,879/- by cash along with applicable interest amounting to Rs.6,71,531/- and also communicated the same to the department. 2. After scrutinizing the Service Tax Returns and after obtaining the information and clarification, the department issued Show Cause Cum Demand Notice C. No. V(15) 107/ST-‐Adjn./Commr./13/9125dated 19.04.2013 by invoking extended period of limitation in terms of the proviso to Section 73(1) of the Act. The Appellant filed detail reply vide its letter dated 21.10.2013, explaining mistakes in certain calculations, furnishing evidences and relevant legal position against each allegation of the SCN. The Appellant, in its reply denied and disputed the allegations made in the SCN except to the extent admitted and paid. The Adjudicating authority passed the impugned OI....
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....entral Excise & Service Tax, Chandigarh -II [ 2023 (8) TMI 407 (CESTAT Chandigarh)] [ Pg 42 - 48 of Index of Cases] 4 Demand under Health Care Service as Pure Agent 19,69,383 Clerical Error 1. Page-305(Vol-II), ST-3 Return where the amount was reported 2. Page -311 to 366 (Vol-II)- Details of Bills with Summary 5 Demand under Renting of immovable property 1,95,934 Cum Tax Benefit not given, The Appellant has already paid Rs. 167181/- under cum tax with Interest amounting to Rs.86,406/- before adjudication, however the same was not taken into consideration in OIO. No amount is payable by the Appellant Commissioner of Central Excise, Delhi Vs. Maruti Udyog Ltd. [(2002) 141 ELT 3] -Pg 54 to 57 of the Index of Cases [ Pg 54-57 of Index of Cases] 6 Demand under Health Care Service on Balance of Sundry Debtors on 31.03.2011 4,73,252 Tax Payment was done as and when amount is collected as per Rule 9 of POTR - CA Certificate enclosed in Pg 408 of Paper Book, Vol-II Rajasthan State Road Transport Corporation Vs. Joint Commissioner of Central Excise and Service Tax, Jaipur [ 2024 (3) TMI 1103 - CESTAT New Delhi] [ Pg 58-63 of Index of Cases....
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....utput service provider who does not maintain separate accounts in relation to receipt, consumption and inventory of inputs/input services used for provision of output services which are chargeable to duty/tax as well as exempted services. If such options are not exercised by the service provider, the provision does not contemplate that the Service Tax Authorities can choose one of the options on behalf of the service provider. At the most the authorities can reject the disputed Cenvat credit taken by the Appellant. In this regard the Appellant relies upon the decision of the Telangana and Andhra Pradesh High Court in the case of M/s. Tiara Advertising Vs. Union of India [2019 (10) TMI 27 - Telangana and Andhra Pradesh High Court]. (5) The Appellant further submits that the recovery of CENVAT credit amounting to Rs.1,00,76,186/- is highly disproportionate to the credit of Rs.25,02,361/- availed on common input services which could be attributed to the service on which no Service Tax was payable. The Appellant in this regard relies upon the decision of the Hon'ble High Court, Gujarat in the case of CCE, Ahmedabad-II Vs. Maize Products [2009 (234) E.L.T. 431 (Guj.)]. (6) The App....
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....fter referred to as "Gowdown Space" for the purpose of selling medicine and other surgical instruments and equipments to indoor and/or outdoor patients and to public at large visiting the said premises." (2) The Appellant submits that the scope and ambit of the service can be judged from the definition and the clarification given by the department. From the relevant definition and the clarification issued by the Department, it is clear that to classify any service under "Business Support Service", the very essential ingredient is that such service shall be an outsourced service which the entity instead of doing himself, preferred it to outsource to some other service provider for various reasons. Whereas, in the instant case M/s. Neotia Healthcare Pvt. Ltd. Has not outsourced any of its activities to the Appellant and instead it had taken a portion of the hospital space from the Appellant on rent to be calculated on the basis of 18% of the sale proceeds of the medicines on principal to principal basis. Therefore, by no stretch of imagination, this service can be classified under "Business Support Service". (3) The Appellant further submits that conjoint reading of the definit....
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....ounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, ................................ [Emphasis supplied] (3) The Appellant submits that in the impugned show cause notice, the department nowhere specified under which clause of the definition of "Business Auxiliary Service" the liability shall be fastened on the Appellant. It is well settled that to bring any activity under the definition of "Business Auxiliary Service" for levy of tax, it is to be clearly mentioned in the show cause notice under which clause of the definition shall apply to fasten that service under the classification of "Business Auxiliary Service". Since the demand has been proposed under omnibus definition of "Business Auxiliary Service" without specifying the clause under which the activity qualifies to be "Business Auxiliary Service", the impugned show cause notice is bad in law and therefore, the confirmation of demand by the Ld. Commissioner shall be set aside on this ground alone. (4) The Appellant in this regard relies upon the following Tribunal decisions: A. Balaji Enterprises Vs. Co....
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....n the nature of exempt service and the same can be verified from the details provided in Annexure -A/13 above. Therefore, the Appellant is not liable to pay service tax amounting to Rs.19,69,383/- calculated on the aforesaid reported figure in the return. E. Demand of Rs.1,95,934/- under 'renting of immovable property service'. (1) The Appellant submits that due to ongoing controversy about the levy of service tax on renting of immovable property, during the relevant period the Appellant neither collected nor paid any service tax on the rent received from its various tenants. Considering the retrospective amendment in Section 65(105)(zzzz) of the Finance Act, 1994, the Appellant after admitting the service tax liability on the rent collected from the various tenants during the relevant period, calculated the service tax liability amounting to Rs.1,67,181/- under cum-tax basis in terms of Section 67(2) of the Act and deposited the same along with applicable interest amounting to Rs.86,406/- on 02.09.2013. [Copy of the receipted challans and the requisite calculations are available in Annexure -A/14, page no. 367 to 389 of the Appeal paper book.] (2) The Appellant submits th....
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.... on collection basis and not on the invoice raised basis. It is a fact that the sundry debtors as on 31.03.2011 is a sum total of value of services provided prior to 31.03.2011 for which invoice was raised within 31.03.2011 but the payment against those invoices were not collected till 31.03.2011 but realised at a later date. The service tax liability becomes due only on collection but not on raising the invoice. Therefore, the confirmation of the demand of Rs.4,73,252/- on the unrealised invoice is not permissible under the law and hence the demand is liable to be set aside. (3) The Appellant in this regard relies upon the decision of the CESTAT, New Delhi in the case of Rajasthan State Road Transport Corporation Vs. Joint Commissioner of Central Excise and Service Tax, Jaipur [ 2024 (3) TMI 1103 - CESTAT New Delhi] G. Demand of Rs.3,28,957/- under 'health care service' in respect of amount received from corporates for treatment of their employees. (1) The Appellant states that it is enlisted with various corporates who send their employees / family members for treatment. In terms of the agreement, the employees after the treatment, do not pay any consideration to the App....
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....ign currency to the tune of Rs.47,00,048/- (details are available in Annexure-A to the SCN, running page no. 143 of the Appeal paper book) on which the impugned SCN proposed to levy service tax under Section 66A without mentioning any specific classification whatsoever. However, on production of the documentary evidences along with the reply to the SCN, the Ld. Commissioner finally retained Rs.7,27,129/- and Rs.1,38,583/- as expenditure in foreign currency for the years 2008-09 and 2010-11 respectively and confirmed demand of Rs.1,03,133/- under three taxable classifications namely 'Business Support Service', Commercial Coaching Centre and Tutorial Service' and 'Scientific or Technical Consultancy Service' knowing fully that the demand proposed in the impugned show cause notice without mentioning any taxable service under which the demand was proposed. (2) The Appellant submits that the Ld. Commissioner travelled beyond the show cause notice while confirming the demand under Section 66A in as much as the impugned show cause notice has not proposed the demand under any taxable classification of service but only mentioned that the assessee has incurred expenses towards payment of ....
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....law has become applicable to the Appellant on 01.07.2010 only. But immediately on getting the SCN the Appellant deposited the admitted tax along with the applicable interest also reversed the Cenvat Credit attributable to exempted service along with applicable interest. (2) The Appellant further submits that from the above submissions, it is abundantly clear that there was no deliberate, wilful and fraudulent suppression of material facts and information with an intent to evade payment of service tax on the part of the Appellant as alleged in the impugned OIO. (3) All the data towards the quantification was gathered based on the details given in the ST 3 Returns, P & L Accounts and Balance Sheets. This shows that all the details were properly recorded in the books of account and there was no deliberate act of suppression in order evade payment of Service Tax. (4) The Appellant in this regard further relies upon the decisions of the Hon'ble Supreme Court if the case of Uniworth Textiles Ltd. Vs. CCE, Raipur [2013] 31 Taxmann.com 67 (S.C.), wherein the Apex Court observed and held that 'Every non-payment /non-levy of duty does not attract extended period, t....
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....Authority. 8. Heard both the sides. Perused the Appeal Papers and additional Written submissions made along with the documentary evidence placed by the appellant. 9. We take the issues one by one in the same order as has been done by the appellant : A. Demand of Rs.1,00,76,186 on account of Cenvat Taken : 9.1 On going through the facts, we find that the appellant initially did not opt for reversal of the Cenvat Credit on proportionate basis. For this they have given the explanation that since the appellant was not required to be registered as they were Hospital and were providing the related services, they were not aware of the statutory provisions. Had they known the same, they would have ensured that the cenvat credit is taken only in respect of the taxable output services. After the Show Cause Notice was issued, on their own they have reversed Rs.25,02,361/-‐[Rs.14,75,879 + Rs.10,26,482] along with applicable interest of Rs.6,71,531/- on 2nd September, 2013. This fact is also certified by their Chartered Accountant. We have gone through page 464 to 484 of the Appeal and find the claim of the appellant to be correct. We find that Tribunals and High Courts have b....
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....ch of the Tribunal, and is also contrary to the ratio of the decision of the Supreme Court in the case of Chandrapur Magnet Wire (supra). 24. In fact the decision of the five Member Larger Bench of the Tribunal in Franco Italian Company (supra) was followed by three Member Bench of the Appellate Tribunal in the case of ICON Pharma and Surgical (P) Ltd., 2000 (40) RLT 918. 25. The Tribunal again in a three Member Bench decision in the case of Tube Investment of India, Final Order No. 795/2002, wherein the specific issue was whether the reversal of credit subsequent to removal of goods, was fetal to the extension of benefits of the notification considered the matter at length. The majority decision upheld the argument of the assessee therein and held that reversal of credit subsequent to the clearance of exempted product is in line with the ratio of the Supreme Court judgment laid down in Chandrapur Magnet Wires Co. (supra). 31. In view of the above decision the writ petition is allowed and the demand of duty and penalty created by order dated 30-10-2001 and confirmed by the Tribunal is set aside. Any amount already deposited by the petitioner shall be refunded to the petiti....
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....04 empowered the authorities to recover such credit which had been taken or utilised wrongly along with interest. However, the second respondent did not choose to exercise power under this Rule but relied upon Rule 6(3)(i) and made the choice of the option thereunder for the petitioner, viz., to pay 5%/6% of the value of the exempted services. The statutory scheme did not vest the second respondent with the power of making such a choice on behalf of the petitioner. The Order-in-Original, to the extent that it proceeded on these lines, therefore cannot be countenanced. Tuticorin Alkali Chemicals & Fertilisers Ltd. Vs. CCE, Tirunelveli 2009 (248) E.L.T. 514 (Tri. - Chennai) 2. We have heard both sides. We find that the assessees reversed the credit taken on the input services used in non-dutiable goods subsequent to the clearance of such goods. They have also paid interest for the delay in reversal of the credit. In this circumstance, applying the ratio of the decision of the larger Bench of the Tribunal in Franco Italian Co. Pvt. Ltd. v. CCE - 2000 (120) E.L.T. 792 and the recent decision of the Tribunal in Mount Mettur Pharmaceuticals Ltd. vide Final O....
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.... Rs.25,02,361/-‐ taken on exempted output services along with interest of Rs.6,71,531 in September 2013, after the Show Cause Notice was issued. These details have been certified by the Chartered Accountant and they are not being disputed by the Revenue. In the cited High Court decision in the case of Hello Minerals, it has been held that reversal of cenvat credit would result in a situation of no cenvat credit being taken in the first place. In the Tiara decision, the Telangana High Court has gone one step further ahead holding that there is no statutory provision available to demand 6% / 8 %/ 10% in case the assessee does not fullfil the conditions of Rule 6 (3). It went on to hold that at the most the cenvat credit taken can be asked to be reversed. We also find that these decisions have been followed by the Chennai Tribunal and Kolkata Tribunal. Therefore, applying the ratio of these case laws, we hold that the confirmed demand of Rs. Rs.1,00,76,186/-, is legally not sustainable. Accordingly, we set aside the demand and allow the appeal to this extent. 10. The next confirmed demand being considered is as under : B. Demand of Rs.42,94,470/- under 'business support se....
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....therance of business or commerce". Business support service is defined in clause (104c) of Section 65 as follows :- "Support services of business or commerce" means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational or administrative assistance in any manner, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation. - for the purposes of this clause, the expression "infrastructural support services" includes providing of office space along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security." 5.9 A reading of the above definition makes it very clear that mere renting of office space does not come within the definition. Such providing of space should be along with other fac....
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....n of "Business Auxiliary Service" the liability shall be fastened on the Appellant. It is well settled that to bring any activity under the definition of "Business Auxiliary Service" for levy of tax, it is to be clearly mentioned in the show cause notice under which clause of the definition shall apply to fasten that service under the classification of "Business Auxiliary Service". 11.3 It the case law of BALAJI ENTERPRISES Versus COMMISSIONER OF C. EX. & S.T., JAIPUR -2020 (33) G.S.T.L. 97 (Tri. - Del.), wherein an identical issue was being considered, it is held as under : 21. The submission of Learned Counsel for the Appellant is that it was necessary for the Department to specify the activity and the nature of service that was to be taxed and for this it was necessary for the Department to point out the specific clause out of seven clauses mentioned in Section 65(19) of the Act but that was not mentioned in the show cause notice. In support of this contention, Learned Counsel has placed reliance upon the decisions of the Tribunal in Commissioner of Customs & Central Excise, Goa v. Swapnil Asnodkar [2018 (10) G..S.T.L. 479 (Tri. - Mumbai)] and United Telecoms Ltd. v.....
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.... the demand to be not sustainable." 24. The aforesaid two decisions of the Tribunal clearly hold that it is imperative for the Department to specify which specific service contained in the seven clauses of Section 65(19) of the Act is being provided and in the absence of any specific service pointed out in show cause notice, the demand cannot be confirmed as the noticee will not be aware as to which precise service contained in the sub-clause has been rendered by him. 25. In the present case, as noticed above, the show cause notice, even after reproducing the seven clauses of Section 65(19), does not specify which particular clause was attracted and it only mentions that "the assessee is an authorized distributor appointed by M/s. TTSL for selling CDMA handsets along with connection to the customers. The expenditure incurred by the distributor is reimbursed by M/s. TTSL in the guise of subsidy and the same appears to be covered under the definition of "Business Auxiliary Service" and chargeable to Service Tax since, the amount received by the assessee was in respect of providing Business Auxiliary Service to M/s. TTSL." 29. The impugned order, therefore, ....
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....ve amendment in Section 65(105)(zzzz) of the Finance Act, 1994, the appellant calculated the service tax liability amounting to Rs.1,67,181/- on cum-tax basis in terms of Section 67(2) of the Act and deposited the same along with applicable interest amounting to Rs.86,406/- on 02.09.2013. We have gone through the challans and calculation sheet provided by the appellant at page Nos.367 to 389 and find the appellant's claims to be correct. Since, the Revenue has not adduced any evidence to the effect that the appellants have charged and recovered the Service Tax from their tenants, we hold that they are entitled for cum-tax benefit in terms of Section 67(2) of the Finance Act 1994. 13.2 Therefore, we hold that the demand is required to be re-quantified as Rs.1,67,181 and not at Rs.1,95,934/- as calculated by the Revenue. We find the appellant has also paid the interest of Rs.86,406 on account of delayed payment to the Service Tax amount. Hence, we direct the Adjudicating authority to appropriate the amount of Rs.1,67,181 of Service Tax and Rs.86,046 towards interest and we set aside the balance confirmed demand, interest and the entire penalty under this category of confirmed dema....
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...., where the payment for such health check-‐up or treatment is made by the insurance company directly to such hospital, nursing home or multi-‐specialty clinic." 15.3 It gets clarified that if the payment is made towards health checkup and preventive care, then such service would become taxable under the category "health service'. In the present case, we find that the amount being paid by the corporates is not account of such services, but is on account of in-patient hospitalization charges, which is being paid by the corporates to the appellant. 15.4 Therefore, we set aside the demand of Rs.3,28,957 and allow the appeal to this extent. 16. Confirmed demand on account of import of Services : H. Demand of Rs.1,03,133/- under Section 66A of the Act. 16.1 The appellant during the period 2007-08 to 2010-11 incurred various expenses in foreign currency to the tune of Rs.47,00,048/-. The SCN proposed to levy service tax under Section 66A without mentioning any specific classification whatsoever. However, on production of the documentary evidences along with the reply to the SCN, the Adjudcating authority dropped a portion of the demand and confirmed the demand o....