I. High Court :
1. Beauty parlour service :
Whether carrying out activities of electro homoeo-pathy consultation and certain other related activities, such as hair bonding/hair weaving, sale of wigs, clips etc. were covered under ‘Beauty treatment services’ ?
Commissioner of Central Excise, Mangalore v. Beau Monde’s Clinic, (2009) 21 STT 326 (Kar.)
The appellant carried on activities of electro homo-eopathy consultation and had allegedly undertaken certain other related activities, such as hair bonding/hair weaving, sale of wigs, clips, etc. The original authority raised demand under the category of ‘Beauty Parlor Services’ on the contention that these activities would fall within ambit of ‘Beauty Treatment’. The Commissioner (Appeals) ruled in favour of the appellant. However, further appeal was preferred by Revenue in CESTAT. The Tribunal agreed with the detailed reasoning by Commissioner (Appeals) in his order, elaborating reasons why these activities of the assessee would not fall under ‘Beauty Treatment’ and ‘Beauty Parlor Service’. Finding no merit for interference, the appeal was dismissed by the High Court.
2. Refund :
Whether refund of Service Tax can be granted when service tax is paid under wrong assumption in spite of not rendering any services and where credit notes have been issued by the assessee ?
Shiva Analyticals (I) Ltd. v. Commissioner of Service Tax, Bangalore, (2009) 21 STT 328 (Kar.)
The appellant claimed refund of service tax u/s.11B of the Central Excise Act, 1944 on contending that service tax was originally paid inadvertently considering that they were liable to pay service tax. Original authority allowed refund on finding that appellant had not rendered any service. The Order was revised by the Commissioner directing to re-credit the refund as the same was erroneously gran-ted. On appeal by the appellant, CESTAT allowed the appeal relying upon the decision in case of Mohd. Ekram Khan & Sons v. Commissioner of Trade Tax, (2004) 6 SCC 1083 and held that since the appellant issued credit notes towards refund of service tax to its clients, refund order passed by the original authority was legal and proper. On appeal by the department calling for interference in the order of CESTAT, the Hon’ble Court held that the order was perfectly legal and valid, and did not call for interference as no questions of law much less the substantial questions framed in the appeal arose for consideration.
II. Tribunal :
3. CENVAT Credit :
CENVAT credit reversed on being pointed out non-admissibility.
3.1 CST Ahmedabad v. Amola Holdings P. Ltd., 2009 (16) STR 46 (Tri.-Ahd.)
Respondent was providing commercial construction service and as such paid service tax at abated rate under Notification No. 1/2006-ST dated 1-3-2006. He also availed CENVAT credit. However, on being pointed out that benefit of abatement was available only on the condition of non-availment of CENVAT credit, voluntarily reversed credit taken but not utilised and also paid interest. Commissioner (Appeals) relying on Chandrapur Magnet Wires (P) Ltd., 1996 (81) ELT 3 SC set aside the pe-nalty proposed by the revenue. Revenue challenging this, contended that once credit is availed, they became ineligible for abatement of 67% and subsequent reversal would not help as exemption Notification has to be strictly construed and relied on Supreme Court’s decision in Bombay Dyeing’s case [2007 (215) ELT 3 (SC)]. However, distinguishing the facts of the case of Bombay Dyeing (supra) and relying on the decision in the cases of Precot Mills Ltd. 2006 (201) ELT 356 (Tri.-Chennai) and Hello Minerals Water (P) Ltd. 2004 (174) ELT 422 (All.), it was held that since credit was not utilised and precedent decision holding exemption squarely applied to the respondent, revenue’s appeal was rejected.
3.2 GHCL Ltd. v. CCE, Bhavnagar 2009 (16) STR 89 (Tri.-Ahmd.)
Appellant was disallowed CENVAT credit of service tax paid on services utilised prior to 10-9-2004 and service tax paid on credit card services, security services, repairs and maintenance services, etc. Factually, security service was used for plant, residential colony and mining and was also evident as per invoice dated 1-11-2004. The contract for repairs and maintenance services pertained to period from 1-9-2004 to 31-8-2005. Since security service was one of the sixteen services covered by Rule 6(5), the credit was considered admissible and proportionate credit in case of repair service after working out was considered admissible for the period 10-9-2004 and 31-8-2005. In case of credit card services, for want of details and the invoice being in the name of individual, credit was disallowed. Appeal accordingly was remanded for limited purpose of working out proportionate admissible credit.
3.3 Whether debit note is an admissible document for allowance of credit.
Pharmalab Process Equipments P. Ltd. v. CCE, Ahmedabad 2009 (16) STR 94 (Tri.-Ahd)
The Tribunal in this case observed that debit notes contained all relevant information required under Rule 9(2) of the CENVAT Credit Rules and therefore, the credit in principle was admissible based on such document which was not named as ‘invoice’. However, the matter was remanded to the original authority as there was no clarity whether the authority had verified the same documents which were presented before the Tribunal. Directions were issued to verify the documents and ensure receipt of service after allowing opportunity to appellant to present the case.
4. Classification : Exclusion under one entry — Whether could be taxed under another entry ?
Kiran Motors Ltd. v. CCE, 2009 (16) STR 74 (Tri.-Ahmd.)
The appellant is an authorised service station of Tata Motors. vehicles and receives reimbursements for providing free service to customers during warranty period. Revenue demanded service tax u/ s. 6S(10S)(zzb) treating the service as business auxiliary service. Since the services provided by the appellant are in respect of servicing/repairs of vehicles as authorised service station services, the ‘- services are classifiable u/s.6S(10S)(zo) as authorised service station service and not under sub-clause (zzb) as contended by revenue. Under sub-clause (zo), only motor cars, light motor vehicles and two wheelers are included and commercial vehicles are not included. The appellant paid service tax in respect of motor cars etc. and the demand of the revenue was only in respect of light commercial vehicles. Relying on the Board’s Circular No. 87/ OS/2006-ST dated 6-11-2006 and Code 36.02 in the Master Circular No. 96/7/07-ST dated 23-8-2007, it was held that transport vehicles were clearly excluded from the category of authorised service station; it could not be brought to tax under another general category of business auxiliary service.
5. Intellectual property service: Services rendered in 1990 – whether payments in installments relevant to hold the service as taxable?
Modi Mundipharma P. Ltd. v. CCE, Meerut 2009 (15) STR 713 (Tri.-Del.)
Appellant, a manufacturer of medicines under an agreement with a Swiss Company received ‘know-how’ in the form of information, data, drawing, secret formula etc. under its own brand name in India and paid royalty for a period of 10 years or more for the know-how. Service tax was demanded on royalty payment paid as receiver of intellectual property service. After perusing the agreement and Show Cause Notice, the Tribunal accepted the contention of the appellant that there was no finding as to receipt of know-how continuously. Payment whether made lumpsum or on deferred basis for know-how received in 1990 could not determine the liability of service tax as no service was provided during the disputed period and allowed the appeal. Since the appeal was allowed on this short ground, other aspects of the applicable date for ‘reverse charge’ etc. were not gone into.
6. Mandap Keeper’s service:
When a hotel rented out rooms along with gardens, whether room rentals were liable for service tax under ‘Mandap Keeper Service’ ?
Merwara Estates v. Commissioner of Central Excise, Jaipur (2009) 21 SIT 327 (New Delhi CESTAT)
The appellants were running a hotel with gardens adjacent to it. They were renting the gardens for the purpose of various functions and for which they were registered as Mandap Keeper and were paying service tax accordingly. The appellant on few occasions, also rented hotel rooms simultaneously with the garden for the purpose of stay of people arriving for the functions. The appellant’s contention was that service tax was not payable on that portion.of the charges realised which is attributable to renting of hotel rooms. Revenue cited the decision of the Tribunal in the case of Rajmahal Hotel v. CCE, (2006) 3 SIT 75 (New Delhi CESTAT) in support of department’s case.
The Tribunal held that the decision in the case of Rajmahal Hotel (supra) only authorised levy of service tax on renting of halls attached to the hotels but not in respect of renting the hotel rooms. Renting hotel rooms for the purpose of stay was not covered under ‘Mandap Keeper Service’. Hence the view taken by the Tribunal earlier that the appellants were not liable to pay service tax in respect of charges recovered for renting of the hotel rooms was confirmed.
7. Outdoor catering service:
Preparation and serving food in company premises whether can be considered outdoor caterer’s service?
Rajeev Kumar Gupia v. CCE, Jaipur 2009 (16) STR 26 (Tri.-Del. )
Appellant cooked and served food in the canteen of a corporate where place for canteen, kitchen storer, furniture, electricity and even gas stove were provided by the company. The contract also provided for payment for advance to the appellant. It was held to be not liable as outdoor caterer’s service as appellant merely prepared and served food.
8. Penalty:
Not leviable when bonafide belief exists.
8.1 Jay Canesh Auto Centre v. CCE, Rajkot 2009 (15) STR 710 (Tri.-Ahd.)
Appellant, an authorised auto dealer paid service tax with interest before issue of Show Cause Notice and pleaded that on account of confusion as to liability under business auxiliary service on incentive received, did not pay such service tax. However, on receiving clarification from CBEC vide Circular No. 87/05/2006-ST of 6-11-2006, they paid service tax and therefore, penalty u/ s.78 be set aside by extending benefit u/ s.80. Penalty u/ s.78 was set aside.
8.2. Krunal Catering Service v. CCE, Vadodara 2009 (15) STR 716 (Tri:-Ahd.)
Appellant ran a canteen in a factory in the rural area and provided meals to employees. They were ignorant of liability of service tax as outdoor caterer as they merely ran a canteen. On learning about it, they paid service tax with interest. Revenue levied penalty u/ s.78 on the ground that ignorance of law could not be the excuse. According to the Tribunal, section 80 could come into play in the circumstances as the belief as to non-applicability of service tax was bonafide and accordingly, penalty u/ s.78 was set aside.
