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2026 (4) TMI 1665
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....service tax department for rendering taxable services viz., Cargo handling services as defined under Section 65(105) of the Finance Act, 1994. During the course of audit and verification of the records, the Department observed the that the Appellant were providing taxable as well as exempted (services provided to SEZ) services and taking full Cenvat credit without maintaining separate records, nor has reversed such Cenvat credit under Rule 6(3) of the Cenvat Credit Rules. Further on scrutiny of documents, the audit observed that the Appellant had not paid service tax under reverse charge for procuring services of renting of motor vehicle. It was also noted that the Appellant had availed Cenvat credit on bills related to services of rent a cab, health insurance and security services provided at the guest house owned by the Appellant. The Appellant had also availed Cenvat Credit on debit notes which was not prescribed document for taking Cenvat credit. Audit also noted that Cenvat Credit was taken on works contract related to building and civil structures which was inadmissible as per Rule 2(l) of Cenvat Credit Rules, 2004. Further credit notes amounting to Rs.11,29,72,594/- was rece....
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....e fees in advance to DIAL computed at the rate of Rs. 2,098 per square meter of the land area to be granted in terms of the concession agreement. The Appellant had regularly paid license fees to DIAL for the cargo terminal site from the effective date of the Concession Agreement. On December 15, 2012 the appellant lodged a claim of Rs. 15,43,26,072/- with DIAL, on the grounds of incomplete and delayed handover of land which had led to inordinate delays in the completion of the construction and development works at Cargo terminal site. Ld Counsel submitted that the Appellant had submitted to DIAL that they should not be charged Land License Fee for the duration of delay in handing over the complete site, and filed a claim for the refund of license fees already paid on such portion of land not handed over to the Appellant. After several rounds of discussions, the claims were finally settled and DIAL issued credit notes referred below towards refund of license fees paid by the Appellant to DIAL; Credit Note Number Credit Note Date Description in Credit Note Amount (Rs.) 330000462/63 16-Dec-13 Reversal of Land Lic Fee 4,15,52,209 330000123 30-Sep-14 Cre....
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.... counsel stated that the Appellant had availed CENVAT on Group Health & Group Personal Accident Policy. He further stated that the Appellant had availed services of a caretaker from one supplier towards guest house for use by the employees and other professionals who visited Delhi to oversee the development of Cargo terminal at the airport. Learned Counsel contended that such visits were imperative for smooth operation of the Cargo terminal and Cargo handling services provided by the Appellant. In this context, Learned counsel placed reliance on the judgment of CESTAT Chandigarh, in the matter of M/s. Honda Motorcycle & Scooter India P. Ltd. Versus CCE, Delhi-III [2019(4) TMI 927 - CESTATCHANDIGARH] The aforementioned judgment was relied upon by the CESTAT Chandigarh, in the matter of M/s Freudenberg Nok Pvt. Ltd. (Formerly Known As Sigma Freudenberg Nok Pvt Ltd) Versus CCE & ST-Chandigarh-I [2019 (11) TMI 536 - CESTAT CHANDIGARH] wherein CENVAT credit on use of guest houses was allowed as credit. 3.3 Learned counsel further submitted that as regards credit taken on rent-a-cab services, travel arrangements were made for company employees and other professionals when they would t....
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....ilised or not for the provision of service or refunded to the agent. 3.7. As regards the invocation of extended period, learned counsel placed reliance on decision of the Tribunal in the matter of M/s. GD Goenka Private Limited vs. Commissioner of Central Goods and Service Tax, Delhi. Learned counsel submitted that CESTAT in several decisions have repeatedly held that extended period of limitation cannot be invoked in the absence of conscious and deliberate withholding of information by the Appellant. He also submitted that provisions to Section 78 of the Finance Act, 1994 can be invoked only in cases of fraud or collusion or wilful misstatement or suppression of facts by the Appellant. The Impugned Order has failed to establish elements for invoking penalty under Section 78 of the Finance Act, 1994. 4. At the outset, the learned authorized representative of the department reiterated the findings given in the Order-in-Original and in the Order-in-Appeal. He also submitted that under Rule 9 of the Cenvat Credit Rules, 2004, debit notes were not valid documents for taking Cenvat Credit. In absence of documents prescribed under Rule 9 Cenvat Credit cannot be allowed to be taken.....
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....availed on work contract service 17,34,036 vi Non-payment of Service Tax under Section 66E 1,90,99,266 Total demand of tax 2,70,80,797 vii Interest on Advance receipts 1,05,681 6. We will consider each issue individually as per the table above: 6.1 (i) Non-reversal of CENVAT Credit: We find that it is an admitted fact that the appellant was providing both taxable and exempted services, and it is also admitted fact that the appellant was not maintaining separate accounts. Hence, the liability to pay 7% of exempted service arises in view of Rule 6(3) of the Cenvat Credit Rules, 2004. The demand is upheld for the normal period. 6.1 (ii) RCM on Rent-a-Cab: Learned counsel has contended that this demand was for the extended period and cannot be sustained in view of the Tribunal decision in G.D. Goenka (supra). In this context, we note that the impugned order has noted that the appellant is liable to pay service tax under RCM in compliance of Sl. No.7(b) of Notification No. 30/2012 dated 20.06.2012. In view of the legal position, we uphold this demand for the normal period. 6.1 (iii) Cenvat credit taken on Rent-a-Cab, security and health i....
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....tisfactorily. 6 Even in relation to a guest house which may not have been situated close to the manufacturing unit of the Assessee, if it is pointed out that the use thereof was not for the personal use or consumption of the employees, exclusion clause in the definition of input service, may not apply.........." In the instant case, we note that a perusal of the invoices (RUDs) clearly shows that it was raised for supply of caretaker to guest houses. Hence the credit was eligible to the appellant as held in the Tribunal decisions (supra). Health Insurance: Learned counsel has contended that group health insurance for employees for not for personal use and hence credit is eligible. We note that this Tribunal in several of its decisions has held that Cenvat credit is available for group mediclaim and insurance policies covering employees as these support the business and also fulfills employer obligation. We further draw support from the judgment of Karnataka High Court in Commissioner of Central Excise & Service Tax, LTU vs. M/s. Micro Labs Ltd. [(2011)06 KAR CK 0038] dated 09.06.2011, wherein the Hon'ble High Court held as follows: "4. The question for consi....
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.... to take credit. The service tax is leviable under Section 66 of the Finance Act and paid on any input service received by the manufacturer of a final product. Therefore under the scheme of the Cenvat Credit Rules, 2004, the service tax paid on all those services which the assessee has utilized directly or indirectly in or in relation to the final product is entitled to claim the credit. Therefore, the Judgment of the Tribunal is legal and valid and is in accordance with law and does not suffer from any legal infirmity which calls for any interference. 6. Therefore it is evident that the assessees are entitled to avail Cenvat credit of the service tax on Group Medical Policy and Group Insurance Health Policy. Under these circumstances, the question of law that arises for consideration in this appeal having since been answered by the Division Bench as mentioned hereinabove, this appeal is dismissed in view of the aforesaid reasons." In view of the foregoing, we hold that the appellant is eligible to avail credit of the same. 6.1 (iv) Credit taken on debit notes: It has been submitted by learned counsel that the debit note contains all relevant particulars as found in ....
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....MI 631- CESTAT-NEW Delhi] "In the light of these decisions when read with the definitions as collected above, it becomes abruptly clear is that the specific disallowance of availment of Cenvat credit with respect to such construction/erection, installation and commission, services which are with respect to the new construction if undertaken by the assessee, however, there is no such specific disallowance in Rule 2 (i) of CCR, 2004 with respect to repair and maintenance work of the premises of the manufacturer: I draw support from decision of this Tribunal in the case of Balkrishna Industries Ltd. versus Commissioner of CGST & C. Ex., Alwar reported as 2022(65) G.S.T.L. 247 (Tri. - Del.)." In view of the above, we hold that the said credit is eligible to the appellant. 6.1 vi. Remission of license fees: The impugned order has held that such refund is an income to Appellant on account of tolerating an act of DIAL in the form of late handing over of possession of land. Section 66E of the Finance Act, 1994 lists specific declared services' taxable under service tax such services, inter alia, include renting of immovable property construction services, agreeing to tolerat....
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....t as specified in the contract shall be deemed to be the date of completion of provision of service; (ii) wherever the provider of taxable service receives a payment up to rupees one thousand in excess of the amount indicated in the invoice, the point of taxation to the extent of such excess amount, at the option of the provider of taxable service, shall be determined in accordance with the provisions of clause (a). Explanation For the purpose of this rule, wherever any advance by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance." it is amply clear that the liability to pay service tax arises when advance is received. Therefore, the liability to pay service tax arose when the Noticee received advance but in the instant case the Noticee paid the Service tax later on at the time of issuance of invoice. Thus, I find that they are liable to pay interest on late payment of service tax on advance receipt and liable to pay interest to the tune of Rs.1,05,681/-." In view of the above, we uphold that the interest amount confirmed in the impu....