TaxTMI 
TaxTMI 
2026 (7) TMI 461
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....tax; (ii) collected electricity charges from lessees without including the same in the taxable value; and (iii) availed CENVAT credit on services which were allegedly not eligible input services. Accordingly, a Show Cause Notice (SCN), dated 18.01.2012 was issued for the period 2007-08 to 2010-11 proposing demand of service tax on renting of immovable property and on electricity charges, besides denial of CENVAT credit. Thereafter, a Statement of Demand (SOD), dated 23.04.2012 was issued for the period 2010-11 proposing denial of further CENVAT credit. After due process, the adjudicating authority confirmed the service tax demands and disallowed the CENVAT credit under Section 73 of the Finance Act 1994 (FA 1994), along with interest, and imposed equal penalty under Section 78 in respect of the first Show Cause Notice and penalty under Section 76 in respect of the Statement of Demand. Aggrieved, the appellant preferred appeals before the Commissioner (Appeals). Vide the impugned order, the First Appellate Authority modified the Order-in-Original by extending cum-tax benefit and allowing CENVAT credit in respect of certain services while disallowing the same in ....
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....ervice provider has discharged tax was debatable and, therefore, the extended period was not invocable. The said ratio squarely applies; hence the impugned order is liable to be set aside. B.5 For the period prior to 10.05.2008, no Service Tax could be demanded on mere book adjustments between associated enterprises. Reliance is placed on Sempertrans Nirlon (P) Ltd. v. CCE, Raigad [2019 (20) G.S.T.L. 560 (Tri-Mumbai)]. Accordingly, the demand for the period prior to 10.05.2008 is liable to be set aside on merits. B.6 Sempertrans Nirlon further holds that the extended period is not invocable in such circumstances. Hence, the entire demand on this count is barred by limitation as well. C. Service tax on electricity C.1 Supply of electricity is a sale of goods and not a service. Reliance is placed on ICC Reality (India) Pvt. Ltd. v. CCE [2013(32) S.T.R. 427 (Tri.-Mumbai)], Pune-III and Kiran Gems Pvt. Ltd. v. CST, Surat-I [2019 (25) G.S.T.L. 62 (Tri-Ahmd.)]. C.2 In Union of India v. Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357-Supreme Court], the Hon'ble Supreme Court held that reimbursable expenses cannot be....
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.... The decision of this Tribunal at Mumbai in Sunil Hi-Tech Engineers Ltd Vs Commissioner of C. Ex., Nagpur [2014 (36) STR 408 (Tri.-Mumbai)], held that the appellant is liable to pay service tax on the taxable services rendered by it in the capacity of a subcontractor. Hence, the plea of non-liability as in the case of a subcontractor is untenable. Further, the order cannot be extended to tax on rent received from a sub-lessee. C. No agreement was produced either before the adjudicating authority or in appeal to show that the service recipient was directly liable to pay electricity charges to the Electricity Board, or that the appellant recovered only the actual electricity charges on reimbursement basis without any mark-up. D. The Appellant claimed to have reversed inadmissible credit and contended that the services supported its business/output service but failed to produce detailed statements or evidence linking the services to taxable output services or showing non-recovery from employees. E. Following the ratio of TELCO Construction Co. Ltd. [2013 (32) STR 482] (relying on Ultratech Cement Ltd. and Manikgarh Cement), CENVAT credit is admissible only w....
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....wo persons. Black's Law Dictionary, 5th Edn., p. 424 defines "dispute" as under: 'Dispute.-A conflict or controversy; a conflict of claims or rights; an assertion of a right, claim, or demand on one side, met by contrary claims or allegations on the other. The subject of litigation; the matter for which a suit is brought and upon which issue is joined, and in relation to which jurors are called and witnesses examined.' (emphasis added) In legal usage, interpretation denotes the judicial determination of the meaning of language employed by the Legislature, particularly where the text is said to admit of doubt, ambiguity, limitation, or competing constructions. It does not arise where the controversy is merely factual, such as appreciation of evidence, scrutiny of records, or factual inferences. Black's Law Dictionary, Ninth Edition, defines interpretation as under: "interpretation, n. (14c) 1. The process of determining what something, esp. the law or a legal document, means; the ascertainment of meaning to be given to words or other manifestations of intention. [Cases: Contracts "Interpretation, as applied to written law, is the art or process ....
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....se of levy of Service Tax the renting of immovable property does not cover lease simpliciter, it covers the renting of immovable property or any other service in relation to such renting, for use in the course of or for furtherance of, business or commerce. The appellant, whose activity satisfies these criteria, would prima facie be covered by the levy. 6.1 We find that the Appellant has pinned the question of time bar arising from an interpretational issue, on the ratio of the judgment in Sree Nandhee Technologies (supra). The said Order of this Bench pertains to the applicability of time-bar specifically regarding a subcontractor's Service Tax liability on outsourced work, in the light of the Larger Bench Order in the case of Commr. of S.T., New Delhi Vs Melange Developers Pvt Ltd. [2020 (33) G.S.T.L. 116 (Tri-LB)]. It would not be proper to cite an Order as a precedent by merely 'matching the colour of one case against the colour of another' ipse dixit, without examining the ratio of the judgment and its similarity to facts and law, which in this case are different. Merely because the prefix "sub" appears in the terms "sub-contract" and "sub-lease", do not make the ratio of a....
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....f another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. [Also see: Collector of Central Excise, Calcutta Vs M/s. Alnoori Tobacco Products and Anr. - 2004 (170) ELT 135 (SC)]; Escorts Ltd. Vs Commissioner of Central Excise, Delhi - II - 2004 (173) E.L.T. 113 (S.C.)] 6.5 We had also in our Order in Apeejay (supra) held that the legal point which is claimed to be an 'interpretation issue', must be debatable and unresolved, due to the lack of a clarification or binding precedent at the time the lis arose, or a subsequent clarificatory circular being issued evidencing prior ambiguity, which affect the rights of parties in rem under the statute. No submissions showing ambiguity or a dispute on the taxability of rent received from a sub-leased property has been made before us. A mere reference to Sempertrans Nirlon (supra) does not help their cause and is without merit. Demand of tax on reimbursement of electricity charges 7. The next issue pertains to the demand of tax on reimbursement of electricity charges paid as per the unit of consumption, for the period from June 2008 to June 2010. The same is a....
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....losure of tax liability in ST-3 returns, as reflecting the Appellants intention to suppress facts and evade duty, without recording any positive act of willful suppression. As held by the Apex Court in Pushpam Pharmaceutical Co. Vs Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], mere failure to disclose does not constitute suppression unless done deliberately to evade duty. Moreover, the visit by the Audit team has not unearthed transactions that were not recorded in the books of account neither was access to information being deliberately denied to the Audit team by the Appellant etc. Hence neither non-inclusion of the information in ST-3 returns nor the recording of objections by the audit team by itself is conclusive of suppression. The Principal Bench of this Tribunal at New Delhi examined a similar issue in its Order in the case of M/s GD Goenka Private Limited Vs The Commissioner of Central Goods and Services Tax, Delhi South [FINAL ORDER NO. 51088 /2023, Dated: 21.08.2023 / 2023 (8) TMI-995-CESTAT NEW DELHI], and held as under: "21. This legal position that the primary responsibility for ensuring that correct amount of service tax is paid rests on the....
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....n cases not involving fraud, suppression, or wilful misstatement was one year from the "relevant date" as defined in Section 73(6). This position continued up to 27.05.2012, when by the Finance Act, 2012, the words "one year" were substituted with "eighteen months" in section 73(1), with effect from 28.05.2012 (the date on which the Finance Bill, 2012 received Presidential assent). The Act did not specifically make this amendment retrospective in application. The SCN dated 18.10.2012 however was issued after the amendment came into force, by which time the demand for the period October 2010 to March 2011, to be made within one year was 'dead'. 9.4 Regarding the retrospectivity of limitation laws, two key judicial precedents clarify the legal position: i. The Five-Member Larger Bench Order in ATMA STEELS PVT. LTD. AND OTHERS Vs COLLECTOR OF CENTRAL EXCISE, CHANDIGARH AND OTHERS [1984 (17) E.L.T. 331 (Tribunal - LB)], held that limitation law is procedural and operates retrospectively. The applicable law is the one prevailing on the date the demand is made, not when the cause of action arises. ii. The judgment of the Hon'ble Supreme Court in UNION OF INDIA Vs UTT....
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....than is expressly mentioned, nor to authorise the Income Tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided, become barred." To similar effect is the judgment in J.P. Jani, Income Tax Officer v. Induprasad Devshanker Bhatt, AIR 1969 SC 778. The Court held : "6. In our opinion, the principle of this decision applies in the present case and it must be held that on a proper construction of Section 297(2)(d)(ii) of the new Act, the Income Tax Officer cannot issue a notice under Section 148 in order to re-open the assessment of an assessee in a case where the right to re-open the assessment was barred under the old Act at the date when the new Act came into force. It follows therefore that the notices dated 13-11-1963 and 9-1-1964 issued by the Income Tax Officer, Ahmedabad were illegal and ultra vires and were rightly quashed by the Gujarat High Court by the grant of a writ." In New India Insurance Co. Ltd. v. Shanti Misra, (1975) 2 SCC 840, this Court said : "The new law of limitation providing a longer period cannot revive a dead remedy. Nor can it suddenly extinguish vested right o....
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....at Credit Rules, 2004 gave "input service" a wide ambit, allowing credit where the service had a real and sufficient nexus with the assessees' output service and the chain of credit remained unbroken. A direct one-to-one correlation was not necessary. In Commissioner of Central Excise Vs Manikgarh Cement, 2010 (20) S.T.R. 456 (Bom.), following Maruti Suzuki Ltd. Vs Commissioner of Central Excise, Delhi, AIR 2009 SC 534, the Hon'ble Bombay High Court held that unless a nexus is established between the services rendered and the business carried on by the assessee, the benefit of CENVAT credit was not allowable. Further the expression 'relating to business' in Rule 2(l) of CCR, 2004 refers to activities which are integrally related to the business activity of the assessee and not welfare activities undertaken by the assessee. Post 01.04.2011 the definition of 'input service' was amended, primarily removing the phrase 'activities relating to business' and excluding certain specific services including services used primarily for personal use or consumption of any employee, from its definition. 10.2 The Principal Bench of this Tribunal at New Delhi had an occasion to examine the issue....
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....her used in or relation to provision of output service nor integrally connected to business of the appellant. Except these, all other impugned services are eligible for cenvat credit." The appellant's reliance on Balkrishna Industries Ltd. (supra), is misplaced. Mere allegation of a vagueness of the show cause notice is insufficient to invalidate the proceedings in the absence of prejudice being demonstrated. As held by the Hon'ble Supreme Court in Natwar Singh Vs Director of Enforcement [(2010) 13 SCC 255], a plea of violation of natural justice must be founded on actual prejudice and not on a mere technical objection. 10.4 The appellant submitted at the Bar that the inadmissible credit pertaining to the SOD works out to Rs. 12,706/- as per the impugned order. Since the First Appellate Authority has correctly examined the issue in line with our discussion above, the impugned order calls for no interference. 11. Revenue having failed to establish suppression with intent to evade tax, no case for imposition of penalties has been made out and the same is set aside. Conclusion 12. In view of the foregoing, the impugned order is partly set aside and modified as ....