Tribunal
1.
[2019-TIOL-530-CESTAT-MAD]
The Leigh Bazar Merchants Association Ltd vs. Commissioner of GST and Central
Excise Date of Order: 24th January, 2019
Demand of
service tax on rent received from members is not sustainable on account of
principles of mutuality.
Facts
The appellant is an
association formed for the purpose of facilitating merchants to store and trade
food grains from the demarcated premises. They received certain amounts from
its members, who are merchants for utilising the land owned by them. A show
cause notice was issued demanding service tax under the category of
“Renting of Immovable Property”.
Appellant contended that
members are able to take lease of the lands only because they are members of
the association and therefore the principle of mutuality prevails. Further it
was also stated where the property is leased to non-members, the total taxable
value would be within the threshold limit and therefore, the demand cannot
sustain.
Held
The Tribunal relying on
Appellant’s own case held that the rent collected from members cannot be
subject to levy of service tax due to the principle of mutuality as laid down
in the case of Saturday Club Ltd. [2004-TIOL-48-HC-KOL-ST] and Ranchi Club
Ltd. [2012-TIOL-1031-HC-JHARKHAND-ST]. Further the benefit of threshold
limit was extended for the rent collected from non-members and the demand on
such rent from non-members was also set aside.
2.
[2019-TIOL-722-CESTAT-MUM]
Commissioner of Service Tax, Mumbai-II vs. Reliance Communications
Infrastructure Ltd Date of Order: 8th February, 2019
Not
considering the written submissions while passing the order is an error
apparent on record.
Facts
Revenue has filed this
miscellaneous application, seeking rectification of mistake in the order passed
by the Tribunal. The appeal was heard in presence of both sides and the order
was reserved. Both sides were directed to file written submissions within two
weeks’ time. Revenue filed the written submissions in the Registry but they
were not placed on the file.
Held
The Tribunal held that it
is evident that without considering the submissions made by Revenue, the order
was passed which is an apparent mistake on the face of the record. Accordingly,
the miscellaneous application merits consideration for recalling the order and
for hearing of appeals afresh.
3.
[2019-TIOL-725-CESTAT-DEL]
Premium Real Estate Developers vs. CST Service Tax, Delhi Date of Order: 27th
November, 2018
In
absence of any defined consideration for alleged service, there is no contract
of service at all and hence is not liable for service tax.
Facts
The assessee, a partnership
firm in the business of real estate trade entered into a Memorandum of
Understanding with Sahara India Limited. On perusal of the MOU, it is obvious
that MOU is not only for providing purely service for acquisition of the land but
also involves many other functions such as verification of title deeds of the
persons from whom the lands are to be acquired, obtaining necessary rights for
development of the land from the Competent Authority etc. The remuneration or
payment for providing this activity was not quantified in the MOU. The MOU
provided “the difference, if any, of the amount being actually paid to the
owner of the land and the average rate shall be payable to the second party
(appellant).” A show cause notice was issued demanding service tax under the
category of Real Estate Agent.
Held
The Tribunal noted that no
fixed amount was agreed in the MOU, the amount of remuneration for service, if
any is not clear in this case. It was noticed that for levy of service tax, a
specific amount has to be agreed between the service recipient and the service
provider. Reliance was placed on the decision of Mormugao Port Trust vs. CC,
CE&ST, Goa [2016-TIOL-2843-CESTAT-MUM]. Accordingly it was held that
since the specific remuneration was not fixed in the deal for acquisition of
the land, both the parties have worked more as partners in the deal rather than
as an agent and the principal. Therefore the taxable value itself did not
acquire finality. Further it was also held that the issue relates to
interpretation and there is no malafide intention on the part of the
appellant. It was noted that the transaction is duly recorded in the books of
accounts. Therefore there is no suppression of information. Thus extended
period is also not invokable.
4.
2018
[19] G.S.T.L. 270 (Tri. Mumbai) Raymond Ltd. vs. Commissioner of Service Tax,
Mumbai-II
Date of Order: 23rd March, 2018
Amount
deducted by foreign banks in foreign currency from the bank in India as
collection charges from export proceeds not taxable in the hands of Indian
exporter.
Facts
Appellant assessee incurred
certain expenditure on account of bank charges in foreign currency in respect
of which the Revenue authorities confirmed the demand contending that the said
charges were liable for service tax along with interest and penalty.
Held
Relying on its decision
passed in an identical case of Greenply Industries Ltd. vs. CCE, Jaipur,
Final Order No. 50149 dated 03.01.2014 of the Hon. Tribunal held that an
amount collected as bank charges by the foreign bank was collected from the
Indian bank and not from the assessee and thus the assessee cannot be construed
as service recipient and thereby not liable to service tax. The appeal was thus
allowed.
5.
2018 [19] G.S.T.L. 277 (Tri.
All.) P.V.S. Construction Pvt. Ltd. vs. Commissioner of Central Excise &
Service Tax, Ghaziabad Date of Order: 23rd March, 2018
No
service tax on security deposit received as pure agent on behalf of flat owners
and subsequently given to society after its formation by flat owners.
Facts
Appellant,
a builder, did not discharge his service tax liability on account of late
registration and late filing of ST-3 returns. Consequent upon the audit by the
department, Appellant paid not only the tax amount, interest and late fee, but
also an excess amount at regular intervals except for the time when the
Appellant’s bank account was frozen. Despite paying more than the proposed tax
liability, the demand was confirmed along with interest, late fee and penalty.
Also tax was confirmed on amounts received by the Appellant as “Security
Deposit” from the prospective flat owners which were later handed over to the
Society.
Held
The Hon’ble Tribunal held
that the Appellant had no intentions of evasion of tax and freezing of bank
account was a reasonable cause for delay in submission of payment of taxes and
accordingly filing of returns were delayed. Therefore, penalty was liable to be
set aside. Further, Appellant suo motu applied for registration and also
did not have any taxable receipts prior to the date of registration. As regards
service tax liability on the amount of security deposit, it was held that said
amount received was in the nature of pure agent as it was later given to the
society when formed. Further it was also held that the amount paid in excess
was eligible for refund and such claim applied in respect of it shall be
granted with interest as per the rules.
6.
2018 [19] G.S.T.L. 653 (Tri.
All.) Commissioner of Central Excise and Service Tax, Allahabad vs. Balrampur
Chini Mills Ltd Date of Order: 2nd August, 2018.
In case
of an exempt service, payment under reverse charge does not arise.
Facts
Appellant assessee obtained
certain amount from the International Finance Corporation as “External
Commercial Borrowings” for the purpose of purchase of a plant. Authorities
opined that service recipient was liable to pay tax on reverse charge basis
since supplier of service did not have an office in India. On perusal of facts
it was clearly seen that service supplier i.e. IFC was exempt from payment of
any tax and duty in India as per the IFC Act, 1958 and hence question of
payment of tax on reverse charge basis should not arise on something that was
already exempt. Thus, demand against assessee was set aside by Ld. Commissioner
(Appeals). The Revenue filed this appeal.
Held
On perusal of records and
facts of the case, the Tribunal held that the assessee had obtained services
from an institution that enjoys relief in the form of exemption given to it
vide the IFC Act, 1958 and thereby payment of tax by the service provider does
not arise. Therefore, the question of shifting any obligation on service
recipient does not arise. The Revenue’s appeal was thus dismissed.
7.
2019 [20] G.S.T.L. 88 (Tri.-
Mumbai.) Pushpak Steel Industries Pvt. Ltd. vs. Commissioner of Central Excise
& Service Tax, Pune-III Date of Order: 7th May, 2018
Arrangement
of transportation merely to facilitate delivery of duty paid excisable goods at
buyers’ premises cannot be categorised as “Business Support Service”.
Facts
Appellant collected
delivery charges separately from the buyers along with assessable value of
goods, statutory dues etc., for delivery of excisable goods to buyers’
premises. No other agreement existed between the parties for providing any
service, over and above the supply of goods. Delivery charges were collected
from the buyers which were incurred for delivery of goods at buyers’ premises
for which appellant paid lump sum amount for transportation of goods and the
balance was shown as “Freight Reimbursement” in the books. Service tax and
penalty was imposed considering the balance amount retained by the appellant as
taxable service under the category of “Business Support Service”.
Held
The Hon’ble Tribunal held
that the appellant did not support the business of his clients in any manner.
The activity of the appellant cannot be held liable for service tax as Business
Support Service as they were outside the ambit of taxable services, thereby
allowing the appeal.
8. 2019 [21] G.S.T.L. 33 (Tri. All.)
Commissioner of Customs, Central Excise & Service Tax, Noida vs. Fortune
Cookie Date of Order: 26th July, 2018
Restaurant
Services provided from rented premise in Golf Course would not amount to
Outdoor Catering Service.
Facts
Revenue
initiated proceeding against Respondent alleging that activity of providing
food in premises of Noida Golf Course to their members through Noida Golf
Course by the respondent would fall under “outdoor catering service” and not
under “restaurant service”. The demand was confirmed and penalty was imposed
vide adjudication order holding the assessee liable to pay service tax 2007
onwards. The adjudication order was quashed by the Ld. Commissioner (Appeals).
Held
It was held that since the
place from where service was provided was taken on rent from Noida Golf Course,
the services are considered as provided from premises of respondent assessee
only. Further, relying on the decision in the case of Tamil Nadu Kalyana
Mandapam Assn. vs. UOI 2006 (3) STR 206 SC, it was observed that the
service of restaurant and outdoor catering are distinguishable and the service
provided by respondent are in nature of “restaurant service”.
9.
2019 [21] G.S.T.L. 37 (Tri.
Chennai) MAS Logistics vs. Principal Commissioner of C.T. & Central Excise,
GST, Chennai Date of Order: 25th September, 2018
Logistic
services provided from India to foreign company for re-export of returned goods
amounts to export of service. Eligible for refund of tax on input services used
for such re-export of returned goods.
Facts
The Appellant provided
Logistic Support Service of return of imported goods under instruction of a
foreign shipper and received consideration in convertible foreign exchange.
Also availed various input services for the export of logistic services and
hence filed a refund claim. The said refund claim was rejected by the Revenue
stating that it did not appear to be in relation to export of service.
Held
The Hon’ble Tribunal held
that the allegation of department that Appellant acted as intermediary and so
place of provision of service as India cannot be sustained in light of the fact
that as Appellant was engaged by H & H, China, to whom they actually
provided service and raised invoices on account of facilitating re-export of
goods. As contract between shipper and importer cancelled, the delivery of
goods was not taken by the importer and the goods were taken back to China
resulting in re-export. The input services availed for doing such return of
goods to China are services availed for exports of services. It was H & H,
China who acted as intermediary and as recipient of logistic services situated
outside India and which paid consideration in convertible foreign exchange.
Therefore Appellant’s service is export of service. Consequently the appeal was
allowed and the refund along with consequential relief was granted.
