I.
HIGH COURT
7. [2020-TIOL-593-HC-Del.]
Aargus
Global Logistics Private Ltd. vs. Union of India & Anr.
Date
of order: 6th March, 2020
The Central Government has the
powers to frame Rule 5A of the Service Tax Rules, 1994 and the same is also
saved w.e.f. 1st July, 2017
FACTS
The petitioner preferred the
present petition to seek directions to quash Rule 5A of the Service Tax Rules,
1994 by declaring that it is in conflict with various provisions of the Finance
Act, 1994. Further, it also sought a writ of certiorari declaring Rule
5A as having lapsed w.e.f. 1st July, 2017 on the grounds that there
is no saving of the said provision under the CGST Act.
HELD
The Court noted that section 94
empowers the Central Government to make rules for carrying out the provisions
of the Finance Act. In addition to the specific matters in relation to which
Rules can be framed, there is also a general rule-making power. The only
statutory limitation is to ensure that rules are framed to enforce the
provisions of the Finance Act. The Court held that the powers granted were
exhaustive and included the power to frame Rule 5A of the Service Tax Rules,
1994.
Further, w.e.f. 1st
July, 2017, the Court noted that Rules are framed to carry out the provisions
of the Act and are framed under the Act. Thus, the Rules are saved by clause
(b) of section 174(2) which states that anything done under the Finance Act
shall not be affected by the amendment of the Finance Act. It was also noted
that the powers of the competent authorities stood preserved by virtue of section
6 of the General Clauses Act. Thus, it was held that the petitioner is obliged
to maintain and provide all records which they are required to maintain in the
normal course of business to the respondent and dismissed the writ.
8
[2020 116 taxmann.com 4 Guj.]
Deendayal
Port Trust vs. UOI
Date
of order: 12th February, 2020
Provisions of Rule 7B of Service
Tax Rules permit the assessee to revise the ST-3 returns multiple times within
the prescribed period. Hence, the ACES portal not allowing it to revise the
Form ST-3 for the second time within a prescribed period resulting in technical
glitches is contrary to the provisions of the said Rule 7B
FACTS
The
petitioner filed ST-3 return for the period April, 2017 to June, 2017 in
August, 2017 and after filing the return realised that there were certain
invoices pertaining to the said period which remained unaccounted;
consequently, the Input Tax Credit involved in such invoices could not be
claimed in the return of service tax in Form ST-3. The petitioner therefore
revised its return and claimed such ITC in the revised return filed in
September, 2017. Thereafter, the petitioner further realised that a few more
invoices for the said period remained to be included in the revised ST-3
returns as well. Therefore, it again tried to file a second revised return to
claim the correct amount; however, ACES did not permit it to file a revised
return for the second time. Therefore, credit of Rs. 99,46,810 remained
unclaimed.
The Department was requested to
consider the additional claim of credit. Thereafter the entire ITC (including
the ITC of Rs. 99,46,810) was claimed in TRAN-1. On scrutiny, the said credit
was denied. It was contended (by the petitioner) that credit should be allowed
as it was well within its right to revise the return a second time as per Rule
7B of the Service Tax Rules; however, the ACES portal did not allow the same.
Therefore, it should be given the benefit of Order No. 01/2020-GST dated 7th
February, 2020 to submit its claim manually.
HELD
The High Court examined the
provisions of Rule 7B of the Service Tax Rules, 1994 and held that the said
Rule permits revision of the original return multiple times within the time
limit prescribed. Hence, the ACES portal not allowing it to revise the Form
ST-3 for a second time within the prescribed period resulting in technical
glitches is contrary to the provisions of the said Rule 7B. Accordingly, the
High Court directed the respondent to consider the claim of Rs. 99,46,810
manually under Rule 7B of the Rules, 1994 and order dated 7th
February, 2020.
II.
TRIBUNAL
9. [2020-TIOL-493-CESTAT-Bang.]
M/s
TPI Advisory Services India Pvt. Ltd. vs. Commissioner of Central Tax
Date
of order: 27th January, 2020
Service Tax paid legitimately on
invoice raised cannot be refunded
FACTS
The appellant raised credit notes
in the GST regime relating to the service tax regime and issued fresh invoices
in the GST regime and paid GST thereon. Subsequently, a refund claim was filed
for the service tax paid prior to July, 2017 u/s 11B of the Central Excise Act,
1944. It was stated that the clients did not accept the service tax invoice and
thus they raised credit notes with respect to those invoices and paid GST on
the fresh invoices raised. The refund claim was rejected on the ground that
raising subsequent invoices under GST as per the request of the clients and
claiming for the refund of service tax already paid under the erstwhile Finance
Act, 1994 is not under the purview of the law to consider for refund of service
tax paid for the correctly declared invoice value in the ST-3 returns.
HELD
The Tribunal noted that the
appellant issued the GST invoices subsequently simply at the instance of their
clients. When the service tax was paid for the services rendered during the
relevant period, the same was liable to be paid. The four invoices issued
subsequently were without any supplies under the GST regime which in itself is
a violation warranting rejection of refund. The tax paid during April to June,
2017 against the service tax invoices was the legitimate tax that was due to
the government as per the prevailing Finance Act, 1994. Hence, the service tax
paid is in order and correct and there is no provision for the refund of duty /
tax that was liable to be paid legitimately.
10. [2020-TIOL-549-CESTAT-Del.]
M/s
Regency Park Property Management
Services P. Ltd. vs. Commissioner, Service Tax
Date
of order: 29th January, 2020
Inputs, input services and
capital goods used for construction of mall which is rented out services
received prior to April 11 is available as CENVAT credit post April 11
FACTS
The appellant availed CENVAT
credit on inputs, input services and capital goods for construction of a mall
and thereafter rented out the same for commercial purposes. Service tax was
paid under renting of immovable property service. The said credit availed was
held as inadmissible. Two show cause notices were issued for the periods April,
2007 to March, 2010 and April, 2011 to March, 2012.
HELD
Relying on the decisions of
various High Courts, including the case of Sai Sahmita Storages (P) Ltd.
(23) STR 241 (AP) and various Tribunals, it was held that there
is no doubt that CENVAT credit availed on inputs, input services and capital
goods used for construction of the mall, which was ultimately let out, cannot
be denied. With respect to the period April, 2011 to March, 2012, it is argued
that the CENVAT credit availed for the period 2011 to 2012 pertains to input
services received prior to 1st April, 2011. In this connection, the
relevant pages of the CENVAT Register for the period 2011-2012 were enclosed.
Relying on Board Circular No. 943/04/2011 dated 29th April, 2011
that credit on such service shall be available if its provision had been
completed before 1st April, 2011, CENVAT credit was allowed.
11. [2020-TIOL-500-CESTAT-Bang.]
Commissioner
of Central Tax vs. M/s Karnataka Golf Association
Date
of order: 17th February, 2020
No service tax on advance
entrance / enrolment fee levied by club from its members as there exists
mutuality of interest
FACTS
The assessee is an Association of
Persons. The issue at hand is whether it is liable to pay service tax on
‘advance entrance / enrolment fee’ collected from prospective members.
HELD
Relying on the decision in the case of State of
West Bengal vs. Calcutta Club Ltd. 2019 (29) GSTL 545 (SC) and of the
Jharkhand High Court in Ranchi Club Ltd. 2012 (26) STR 401 (Jharkhand),
the Court held that since there is mutuality of interest between the club and
its members, there is no transfer of ownership of the service and accordingly
the appeals are disposed of.
