I.
HIGH COURT
26. [2020-TIOL-397-HC-AP-ST] Vasudha
Bommireddy vs. Assistant Commissioner
of Service Tax, Hyderabad Date of
order: 20th December, 2019
Tax collected without
authority of law is liable to be refunded with interest
FACTS
A writ petition was filed for refund of
service tax consequent upon the decision of the Delhi High Court in Suresh
Kumar Bansal’s case, 2016-TIOL-1077-HC-DEL-ST, wherein it was
held that in respect of the composite contracts for purchase of immovable
property along with goods used therein and also a part of the undivided land,
service tax cannot be levied on the composite price as per the provisions of
the Act as the statute did not contain any mechanism to segregate / bifurcate
the value of goods and the cost of the land from the gross value for
determining the value of the service.
HELD
The Court noted that the refund (plea)
is filed within two months of the decision of the Delhi High Court. Article 265
of the Constitution of India provides that ‘no tax shall be levied or collected
except by authority of law’. Therefore, refund was sanctioned with interest of
9% per annum from the date of payment.
II. TRIBUNAL
27. [2020-TIOL-249-CESTAT-Ahm.] Surya
Shipping vs. Commissioner of Central Excise and Service Tax Date of
order: 22nd August, 2019
The difference
between freight received and freight paid is not a service liable to service
tax
FACTS
The assessee is engaged in purchasing
space on ocean-going vessels from shipping companies and selling the same to
various exporters. The shipping companies raise invoices on the assessee for
freight and the assessee in turn raises its own invoices on the exporters for
the freight. The difference in freight represents the profit or loss, as the
case may be, in respect of the said activity of buying and selling space on the
ocean-going vessels. The Revenue claimed that the profit or excess freight is
taxable under Business Support Service. The demand was confirmed by the
Commissioner (Appeals). Hence, the present appeal was filed.
HELD
The Tribunal noted that there is no
service involved in such transaction as the purchase and sale of the space is
an activity of sale and purchase and hence not liable to service tax. Further,
relying on several judgments it is held that any amount charged for space on
ocean-going vessels, over and above the purchase price, is not liable to
service tax.
28. [2020-TIOL-324-CESTAT-Mad.] M/s
Broekman Logistics India Private Limited vs. Commissioner of GST and Central
Excise Date of
order: 31st January, 2020
The intention of
creating a Free Trade Zone is to give exemption from levy of all duties and
taxes and therefore by application of service tax rules, place of provision of
service rules, the activities undertaken by such units cannot be made taxable
FACTS
The appellants are engaged in the
business of logistics supply, chain management, clearing and forwarding,
licensed CHA, etc. They did not pay any service tax on the services provided by
them from the Free Trade Warehousing Zone (FTWZ) exclusively to foreign-based
clients. It was contended by the Revenue that the service does not qualify as
export of services, therefore tax is payable.
HELD
The Tribunal primarily noted that the
Special Economic Zone Act, 2005 provides for exemption from service tax.
Section 51 states that the Act will have overriding effect notwithstanding
anything inconsistent in any other law. The Act, therefore, overrides the
Finance Act, 1994. Accordingly, it was held that the Department cannot press
the application of service tax rules, place of provision of service rules or
other rules to hold that the appellant has not exported any service. The
meaning of service and export contained in the special legislation by which SEZ
or FTWZ has been created has to be given effect. Thus, the demand was set
aside.
29. [2020-TIOL-209-CESTAT-All.] M/s Radhey
Krishna Technobuild Pvt. Ltd. vs. Commissioner of Central Excise Date of
order: 17th December, 2019
Electric meter
charges collected along with the sale of residential units is a bundled service
u/s 66F of the Finance Act, 1994; therefore, the electric charges collected is
also admissible for abatement
FACTS
During the time of sale of residential
units the assessee was also collecting some charges from the buyers under the
head ‘electric meter main load supply charges’ and was discharging service tax
by claiming an abatement. The Revenue opined that such charges collected were
other than the construction of residential complex service and therefore
abatement was inadmissible.
HELD
The Tribunal noted
that section 66F(3) of the Finance Act, 1994 provides that taxability of a
bundled service shall be determined if various elements of such services are
naturally bundled in the ordinary course of business. The charges for electric
meter main load supply were collected along with the consideration for sale of
residential unit and they were collected from every person to whom the
residential unit was sold; further, as explained, the same was for providing
electricity supply during power failure/s to the residents of the complex.
Therefore, such service is bundled service u/s 66F of the Finance Act, 1994.
Accordingly, the abatement is admissible and the demand is set aside.
