TaxTMI 
TaxTMI 
2026 (8) TMI 651
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....h the Department for rendering of taxable services viz. Consulting Engineer service, Management Consultant service, Online Information Data service, Commercial Training & Coaching service, Erection, Commissioning and Installation service, Business Auxiliary service, Maintenance or Repair service, Transportation of Goods by Road service, Renting of Immovable Property service and Information Technology Software service. The Appellant has been regularly paying service tax for the taxable services provided by It and has been filing its ST-3 returns regularly. 2.2. Verification of the accounts of the Appellant was undertaken under Section 14AA of the Central Excise Act, 1944 by the special auditor from 12.3.2012 to 16.3.2012 for the period April 2011 - February 2012. Objections raised by the special auditor were shared with the Appellant by the Superintendent of Central Excise, Range III-E, Puducherry vide Letter dated 28.6.2012. After the audit, the Department sought further details from the Appellant vide its Letter dated 19.10.2012. In response thereto, the Appellant vide its Letter dated 14.11.2012 provided the requisite details as sought by the Department. Thereafter, the Appell....
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....tent provision after advent of negative list w.e.f. 1.7.2012 is not sustainable and liable to be set aside in light of the following decisions: * Commissioner of Central Tax Goods and Service Tax, Delhi East v. Sanjay Electricals (vice-versa), Final Order No. 50105-50108/2024 dated 18.01.2024 * Hindustan Zinc Ltd v. CCE, Udaipur, Final Order dated 19.10.2022 in Appeal No. ST/53536/2015 - CESTAT Delhi * Frisco Foods Private Limited v. Commissioner, Customs, Central Excise and Service Tax, Dehradun, Final Order dated 11.11.2021 in Appeal No. ST/50126/2016 - CESTAT Delhi 3.2. In view of the aforesaid, it is submitted by them the demand of service tax confirmed for the period from 1.7.2012 to September 2013 invoking a non-existent provision of law is untenable and liable to be set aside; without prejudice to the aforesaid, it is further submitted that even after 1.7.2012 as per the applicable provisions of Section 65B(44) of Finance Act, installation of multi-function printers would still be outside the ambit of 'service' as the said transaction in dispute constitutes 'deemed sale' inasmuch as admittedly, Appellant discharged VAT/CST on receipt of the enti....
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....g judgments: * Gujarat State Fertilizers & Chemicals Ltd. v. CCE, 2016 (45) STR 489 (S.C.) * Rural Electrification Corporation Ltd. v. Commissioner of Service Tax, 2020 (40) GSTL 339 (Tri. - Del.) * Boston Scientific India Pvt. Ltd. v. CCE & GST, Gurugram, Final Order dated 12.11.2025 in Appeal No. ST/60438/2021 - CESTAT Chandigarh Without prejudice, Service Tax is not payable on reimbursement of expenses. 4.4. The Appellant submits that the Group companies had merely reimbursed the Appellant for the expenses incurred by the Appellant in relation to the employee costs for the period under dispute. It is submitted herein that no Service Tax is payable on such reimbursement of expenses. Reliance in this regard is placed on the judgment of Hon'ble Delhi High Court in Intercontinental Consultants & Technocrats (P) Ltd. v. UOI, 2013 (29) STR 9 (Del.) wherein Rule 5 of the Service Tax Valuation Rules was held to be ultra-vires Section 67 of the Finance Act. In view of the above submissions, the appellant argues that the demand confirmed vide the impugned Order on 'reimbursement of employee costs' under the category of BSS, is patently incorrect and thus, ....
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....in five attributes for a transaction to be covered under "transfer of right to use goods" were noted, which are provided below- a) There must be goods available for delivery; b) There must be consensus ad idem as to the identity of the goods; c) The transferee should have a legal right to use the goods-consequently all legal consequences of such use including any permission or licenses required therefor should be available to the transferee; d) For the period during which the transferee has such legal right, it has to be at the exclusion of the transferor this is the necessary concomitant of the plain language of the statute- -viz. a 'transfer of the right to use' and not merely a license to use the goods; e) Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. 5.3. In view of the above, it is submitted that the Appellant satisfies all the aforesaid five (5) conditions inasmuch as the goods i.e., printers were delivered and installed at the premises of the customers and the operation of the equipment so deployed was under t....
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....s and materials (spare parts, toner, consumables etc.) supplied by the Appellant is, thus, exempted from payment of Service Tax under Notification No. 12/2003-ST. Accordingly, the appellant claims that the demand of service tax is unsustainable to this extent. 6. Service Tax is not payable on supply of course material by the Appellant. 6.1. The Appellant further draws attention to the fact that the Ld. Commissioner, vide the impugned Order has confirmed Service Tax demand of Rs. 1,26,99,502/- for the period July '10 to June '12 on the value of course material supplied by the Appellant during the relevant period, on the basis of the patently erroneous assumption that the same was towards the provision of 'Commercial Training or Coaching Service'; on this score it is submitted that the Appellant is not engaged in providing 'Commercial Training or Coaching Service'; Instead, it has engaged independent service providers to impart courses and operate its Career Development Centers. Any student interested in availing services of the CDCs would approach the service provider and enroll with it and pay the fee for such course for receipt of the service; that the transactio....
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....ive list regime (i.e., up till 30.6.2012), the scope of 'advertising agency' covered the following activities: * Making of advertisement; * Preparation of advertisement; * Display of advertisement; or * Exhibition of advertisement 7.3. Further, it has also been submitted that the CBIC vide its Circular No. 345/4/97-TRU dated 16.8.1999 (in short 'Circular No. 345/4/97') and Trade Notice No. 99/GL-90/CE/PRO/CALII/99 dated 16.9.1999 has clarified that if the assessees were also engaged in designing, visualizing and conceptualizing etc. of the advertisements, then only they would be liable to pay service tax; that thus, CBIC has interpreted 'advertising agency service' as something more than mere printing of the advertisement; that in the present case, the Appellant is merely displaying the logo of Intel on the computers manufactured by it. The Appellant further takes the stand that such logos are provided by Intel and the Appellant does not design or make such logos. Therefore, it is submitted that the Appellant is not rendering and is never engaged in conceptualizing, visualizing or designing the advertisement. Thus, it is contended that the act....
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....e of Paul Merchants Ltd. v. CCE, Chandigarh, 2013 (29) STR 257 (Tri. - Del.), wherein the Tribunal, Delhi had inter-alia held that when the person on whose instructions the services in question have been provided is located abroad, the destination of the service has to be treated abroad. Submissions for demand confirmed for the period from 1.7.2012 (i.e., post negative list regime). 7.7. W.e.f. 1.7.2012, the erstwhile EOS Rules were replaced with the Place of Provision of Services Rules, 2012 (in short 'POPS Rules'). It is submitted in this connection that in terms of Rule 2(i) read with Rule 3 of the POPS Rules, the place of provision of the services provided by the Appellant were 'outside the taxable territory' and hence, the same were not leviable to Service Tax in terms of Section 66B of the Act. It is also adverted that the impugned SCN did not invoke provisions relating to 'Negative List regime' as amended vide Finance Act, 2012 for demanding service tax for the period from July, 2012 onwards. Therefore, by relying on Section 65B(2) of the Act for confirmation of demand, the appellant makes the argument that the impugned Order has travelled beyond the scope of t....
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....s leviable on the same transaction. 8.4. It is further submitted that once VAT/Sales Tax has been paid on the said transaction, demand of service tax on the same transaction is untenable. Reliance in this regard is placed on the following judgements: * Gainwell Commosales Private Limited (Formerly M/s. TIL Limited) v. Commissioner of Central Excise & Service Tax, Ranchi [Final Order No. 7575875759/2023 dated 14.06.2023 in Service Tax Appeal No. 76003 of 2016 - CESTAT Kolkata] * Gainwell Commosales Private Limited (Formerly M/s. TIL Limited) v. Commissioner of Central Excise & Service Tax, Ranchi [Final Order No. 76551- 76552/2023 dated 23.08.2023 in Service Tax Appeal No. 76174 of 2017 & 75841 of 2022 - CESTAT Kolkata] * Commissioner of C. Ex. & S.T. (LTU), Delhi v. Xerox India Ltd., 2019 (20) G.S.T.L. 96 (Tri. - Chan.) * Voltas Limited v. Commissioner of CGST & CX, Kolkata North Commissionerate, Final Order No. 76643/2023 dated 12.9.2023 in Service Tax Appeal No.182 of 2012CESTAT Kolkata * Safety Retreading Company (P) Ltd. v. CCE, Salem, 2017 (48) STR 97 (SC) * Wipro GE Medical Systems (P.) Ltd. v. Commissioner of Service T....
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.... submitted that the Appellant has not suppressed any facts. It is pleaded that where the assessee believes the correctness of a legal position, and if there is scope for such belief, such as decisions of judicial forums, it cannot be said that there has been a wilful misstatement or suppression of facts, or contravention of the provisions of the Finance Act made thereunder with intent to evade payment of duty. In this regard, the Appellant places reliance on the following case laws in support of its contention that extended period of limitation is not invokable in such a scenario: * CCE & Customs v. Reliance Industries Ltd., 2023 (385) ELT 481 (S.C.) * Mahanagar Telephone Nigam Ltd. v. UOI 2023 (73) GSTL 310 (Del.) * GD Goenka Private Limited v. Commissioner of Central Goods and Services Tax, Delhi South, Final Order No. 51088/ 2023 in Service Tax Appeal No. 51787 of 2022 * Hero MotoCorp Limited (Global Parts Centre) v. Commissioner (Appeals), Central Excise and CGST, Jaipur, Final Order No. 55631-55632/ 2024 in Excise Appeal No. 51930 of 2019 and Excise Appeal No. 50688 of 2020 * Birla Corporation Limited v. Commissioner of CGST and Cen....
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....under the amended Section 65B(44) of the Act, post introduction of negative list. Furthermore, the said activity does not amount to 'export of service' as Intel has presence in various cities in India. Thus, the supply of course material, are liable to service tax under the service category of 'Commercial Coaching & Training services'. (iv) The Appellant has arbitrarily deducted 80% value of the gross amount as the value of goods such as toner, spares etc. sold during the provision of CSMC services and have paid Service Tax only on 20% value of the total amount and thus, the benefit of Notification No. 12/2003 - ST dated 20.6.2003 is not available to the Appellant, in the absence of failure to furnish sufficient documentary evidence/basis for splitting of the value. Thus, the Comprehensive Service & Maintenance Contract' ( 'CSMC services') rendered by the Appellant are eligible for the benefit under Notification No. 12/2003 - ST dated (v) Regarding invocation of extended period of limitation, the Ld. A.R. submits that the Appellant suppressed all material information related to their activities with an intent to evade payment of Service Tax. The transactions only ....
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....that GSFC receives 60% of the HCN whereas GACL receives 40% of the supply in accordance with their respective requirement. To enable GACL to receive this HCN through common pipeline, arrangement/agreement was entered into between these two parties. For this purpose, handling facilities were installed in the premises of GSFC. However, fact remains, for which there is no dispute, that for installation of these facilities both the parties had contributed towards the investment. Since the said handling facilities are in the premises of GSFC, incineration also takes place at the said premises. Handling facilities expenditure thereof is shared equally by both the parties. That is clearly provided in the agreement/arrangement that was agreed to between the parties and is reflected in the Minutes dated 6-7-1980. Once these facts are accepted, we find that handling portion and maintenance including incineration facilities is in the nature of joint venture between two of them and the parties have simply agreed to share the expenditure. The payment which is made by GACL to GSFC is the share of GACL which is payable to GSFC. By no stretch of imagination, it can be treated as common 'service' p....
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....qually true that it should be clearly provided for and intended; at any rate, double taxation cannot be enforced by implication." 13.2. In view of the above findings, we hold that the demand of service tax of Rs.21,80,617/- confirmed vide the impugned Order on 'reimbursement of employee costs' under the category of 'Business Support Services' is not sustainable and hence we set aside the same. 14. Regarding the Service Tax demand of Rs. 1,74,56,830/- confirmed on the consideration received by the Appellant under the category of BSS, we find that the Appellant has entered into a contractual arrangement with various entities wherein the multi-function printers installed by the Appellant remain in the possession of the customers for their use throughout the contract period. Such a transaction was involving transfer of right to use goods and hence it would amount to 'deemed sale' which is beyond the purview of service tax. 14.1. Further, we find that Notification No. 12/2003-ST dated 20.6.2003 provides exemption from payment of Service Tax to part of the value equivalent to value of goods and materials sold by the service provider to the service recipient, provided there is do....
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....s could be traced to Circular No. 59/8/2003-S.T., dated 20-6-2003. The relevant legislative provision and the exemption granted vide Notification No. 12/2003-S.T., dated 206-2003 admit of no ambiguity. It is the admitted factual scenario that the assessee had provided the taxable service of Commercial Training and Coaching qua Section 65(165)(zzc) read with Section 65(26) and (27) of the Act. Section 67 of the Act enjoins that the gross amount charged by the taxable service provider/assessee on the taxable service. Accordingly, the value of the books or course material supplied by the assessees to its students/trainees is required to be included in the value of the taxable service as the gross amount charged by the service provider. The assessee however relied on the Notification dated 206-2003, issued by the Central Government in purported exercise of its powers under Section 93(1) of the Act. Under this general exemption notification, the Central Government exempted "so much of the value of all the taxable services, as is equal to the value of goods and material sold by the service provider to the recipient of service, from the Service Tax leviable thereon under Section 66 of the....
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....the clarification of the CBEC which engrafts a condition that the exemption notification is applicable only where the value of the course material (sold by a commercial or training institute) answers the description of standard text books which are priced, is illegal, unauthorised and of no effect. No notice or cognition can be taken by any authority or such unauthorised exertions by the CBEC. If this illegal and unauthorised condition, imposed on the generality of exemption granted by the Central Government vide Notification No. 12/2003-S.T., dated 20-6-2003 is ignored, as it must, the assessee/appellant is clearly entitles to the benefit of the exemption. 7. Ld. C.A. for the assessee has relied upon the decision of this Tribunal in Chate Coaching Classes Pvt. Ltd. v. CCE, Aurangabad reported in 2012-TIOL-714-CESTATMUM = 2013 (29) S.T.R. 138 (Tri-Mum.) and which in turn rely on the earlier decision of this Tribunal in Pinnacle v. CCE, Chandigarh reported in 2011 (24) S.T.R. 453 (Tri.-Del.) to support its challenge to the concurrent orders of the primary and appellate authorities. These decisions are clearly in favour of the assessee and our analysis of the relevant provis....
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...., by virtue of Section 66F of the Act, the same were liable to be taxed as 'advertising agency services'. In this regard, we find that the term 'Advertising Agency' is not defined under Section 65B of the Act prevailing under the negative list regime. However, as per the definition under Section 65(3) of the Act prevailing under the positive list regime (i.e., up till 30.6.2012), the scope of 'advertising agency' covered the following activities: * Making of advertisement; * Preparation of advertisement; * Display of advertisement; or * Exhibition of advertisement 16.1. Further, CBIC vide its Circular No. 345/4/97-TRU dated 16.8.1999 (in short 'Circular No. 345/4/97') and Trade Notice No. 99/GL-90/CE/PRO/CAL-II/99 dated 16.9.1999 has clarified that if the assessees were also engaged in designing, visualizing and conceptualizing etc. of the advertisements, then only they would be liable to pay service tax. Thus, CBIC has interpreted 'advertising agency service' as something more than mere printing of the advertisement. In the present case, the find that the Appellant is merely displaying the logo of Intel on the computers manufactured by it. Fu....
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....ted by the Appellant. We further find that the Appellant has not availed any Cenvat credit on such spare parts, toner, consumables etc. nor is there any dispute on fulfillment of this condition by the Appellant. In-fact, there is neither any allegation in this regard in the impugned SCN nor any finding in the impugned Order. We find that the Appellant has been regularly discharging VAT liability on the spare parts, toner, consumables etc. supplied during the provision of such 'CSMC services'. Thus, we find that the Appellant has fulfilled all the conditions prescribed in the said Notification 12/2003 with respect to the goods supplied in the course of provision of 'CSMC services'. Thus, we hold that the Appellant is entitled to avail the benefit of abatement under Notification No. 12/2003 - ST dated 20.6.2003. In this connection, it would be pertinent to note that once VAT/Sales Tax has been paid on the said transaction, then the demand of service tax on the same transaction is untenable. This view has been held by the Hon'ble Supreme Court in the case of Safety Retreading Company (P) Ltd. v. CCE, Salem [2017 (48) STR 97 (SC)]. The relevant part of the said decision is reproduced b....
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.... Tax on that component (70%) is concerned. A reading of the show cause notice dated 24th January, 2008 would go to show that the entire thrust of the Department's case is the alleged liability of the appellant-assessee to pay service tax on the gross value. In the aforesaid show cause notice, the details of the value of the goods, raw materials, parts, etc. and the value of the services rendered have been mentioned and service tax has been sought to be levied at the prescribed rate of ten per cent (10%) on the differential amount. It is now stated before us that the aforesaid figures have been furnished by the assessee himself and, therefore, must be understood not to be authentic. This, indeed, is strange. No dispute has been raised with regard to the correctness of the said figures furnished by the assessee in the show cause notice issued to justify the stand now taken before this Court; at no point of time such a plea had been advanced. 13.Besides the above, the affidavit of the learned Commissioner, referred to above, proceeds on the basis that the appellant assessee is also liable to pay service tax on the remaining seventy per cent (70%) towards material costs in add....
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.....9.2023 in Service Tax Appeal No.182 of 2012-CESTAT Kolkata * Wipro GE Medical Systems (P.) Ltd. v. Commissioner of Service Tax, Bangalore, 2009 (14) STR 43 (Tri.-Bang.). Affirmed by Hon'ble Supreme Court in Commissioner v. Wipro GE Medical Systems Pvt. Ltd., 2012 (28) STR J44 (SC) * Imagic Creative Pvt. Ltd. v. Commissioner of Central Taxes, 2008 (9) STR 337 (S.C.) * Commissioner of Service Tax, Mumbai v. UFO Moviez India Ltd., 2022 (61) GSTL 4 (SC) 17.2. Thus, by relying on the decisions cited supra, we hold that the Appellant is entitled to avail the benefit of abatement under Notification No. 12/2003 - ST dated 20.6.2003, as they have paid VAT/Sales on the said transaction. Accordingly, we hold that the demand of service tax confirmed in the impugned order is not legally sustainable and resultantly, we set aside the same. 18. The Appellant has contested the demand on the ground of limitation also. We find that the impugned SCN in the present case was issued on 23.10.2015 for the period from July '10 to June '15. Therefore, it is their case that the demand which has been raised for the period up till September 2014 is beyond the normal period of ....