| Authority |
CESTAT, Bangalore |
| Party Name |
Dataware Computer |
| Department |
CCEC&ST, Guntur |
| Demand |
Rs.50,133/- |
| Judge |
Sri T.K.Jayaraman |
| Counsel |
L.N. Goyal. |
|
| Authority |
CESTAT, New Delhi |
| Party Name |
Deepak Computers |
| Department |
CCE, Chandigarh |
| Demand |
- |
| Judge |
S.S.Kang, Rakesh Kumar |
| Counsel |
B.K.Singh |
|
Dataware Computers, Progressive Computers and PRC Associates are engaged in the services of uploading and downloading data from spot billing machines on a regular basis, preparing D-list of defaulting customers, furnishing monthly returns on the input data provided by the Central Power Distribution Company of A. P Ltd., furnishing CAT rolls and sales data base, maintaining consumer accounts and modifying accounting systems to the Andhra Pradesh State Electricity Board (APSEB).
|
|
Departmental allegation that Deepak Computers managing Dharamkanta falls under Business Auxiliary service as defined in Section 65(19) of the Finance Act was rejected by the Commissioner of Central Excise (Appeals).
|
Whether weighment of goods comes within the purview of “Business Auxiliary services”? |
|
Whether computerized data processing falls within the realm of Information Technology Service and thereby excluded from the category of Business Auxiliary service?
|
|
- Deepak Computers are managing Dharamkanta and issue weighment slips in respect of the goods which were weighed at the Dharamkanta.
- Not providing any service with regard to promotion or marketing or sale of goods.
- Do not have any interest in the sale or the marketing of goods or in the nature of goods to be weighed.
- Do not even know if the goods under weighment are for sale or for captive consumption.
|
- Without weighment of goods, goods cannot be sold in the market.
- Business Auxiliary Service means any service in relation to promotion,
- Marketing or sale of goods produced. A service incidental or auxiliary to promotion or marketing is also included in the Business Auxiliary service.
- As Deepak Computers are providing service which is incidental to the promotion or marketing of goods, therefore are under the cover of Business Auxiliary Service.
|
- Deepak Computers are running the business of Dharamkanta and are involved in the weighment of goods.
- Not concerned with the promotion, marketing or sale of goods. Therefore not falling within the definition of Business Auxiliary Service.
|
|
- Vide the contract entered into by the parties with APSEB, it is very clear that the main activity of the parties is data processing.
- In lieu of the definition of “Business Auxiliary Service”, it is provided that “Information Technology service” is excluded from its purview.
- Computerized data processing falls within the scope of “Information Technology Service” and not “Business auxiliary Service”.
|
|
Parties are actually using the computer to render various services which includes maintenance of accounts etc.One cannot say that anybody using a computer is rendering “Information Technology service”.
|
|
After going through the relevant portions of the contract for understanding the scope of services rendered by the parties, it is found that the parties are required to generate various MIS reports in lieu of the clauses of the contract and to develop the software for this purpose. Therefore it is not correct to state that they had not carried out data processing task. The services clearly fall under the scope of “Information Technology Services” and thereby are excluded from the scope of “Business Auxiliary services”.
|
|
| Authority |
CESTAT, Ahmedabad |
| Party Name |
Shakti Motors |
| Department |
CST, Ahmedabad |
| Demand |
Rs. 46,225 |
| Judge |
B.S.V.Murthy |
| Counsel |
P.P.Jadeja |
|
| Authority |
CESTAT, Kolkata |
| Party Name |
Sriram Share Brokers Ltd. |
| Department |
CST, Kolkata |
| Demand |
Rs.51,83,237/- |
| Judge |
D.N.Panda,Dr.Sathapathy |
| Counsel |
B.Bhattacharjee |
|
Whether section 80 of the Finance Act, 1994 can be invoked in cases where there was confusion in the liability to pay tax and where there is no evidence to prove the intention of evading tax?
|
|
Sriram is a registered stock broking member of National Stock Exchange. They also collect transaction charges from their clients. Commissioner has demanded ST and education cess amounting to Rs.51, 83, 237/- and Rs. 82, 509/- respectively from Sriram along with interest and penalty on the ground that “transaction charge” is a part of service charge and it cannot be excluded from the gross value of service for the purpose of computing ST. CENVAT credit was also disallowed as Sriram could not produce the details in connection with their service registration.
|
Whether ST can be levied on transaction charges? |
Transaction charges paid to the stock exchanges are re-imbursed by the clients and the same does not form gross-amount received towards providing service. |
|
- If ST was paid before the issue of show-cause notice, show-cause notice need not be issued.
- Not clear about liability of payment of ST on Business Auxiliary Service, therefore not paid the ST. Although no intention to evade tax.
|
|
Benefit of section 80 should be extended. However, liability of interest cannot be set aside and if Shakti Motors has not paid the same, they should pay the interest as applicable.
|
|
| Authority |
CESTAT, Ahmedabad |
| Party Name |
G.E.India Pvt.Ltd. |
| Department |
CCE, Vadodara |
| Demand |
Rs. 25,96,626/- |
| Judge |
A. Wadhwa, B.S.V.Murthy |
| Counsel |
W.Christian |
|
Other stock brokers are paying ST on the transaction charges throughout the country as the same is a part of the service charges..
|
- As per circular dated 11th December 2000 issued by the National Stock Exchange of India, the transaction charges are payable by the trading member of the stock exchanges. The amount is determined on the basis of turnover of the trading members fixed under various slabs.
- As such, the amount is neither payable by the clients nor is relatable to the client’s turnover etc.
- Whatever amount Sriram has received from its clients are only part of the service charges and the same is required to be taxed at the hands of Sriram.
- With regard to denial of the CENVAT credit, the matter can be decided only at the time of regular hearing of the matter.
- On both accounts, Sriram does not have a prima-facie case for total waiver of pre-deposit.
- Prima facie, the transaction charges which are not required to be paid by the clients of Sriram, cannot be held to be re-imbursible amounts or excludable from service charges.
|
| Authority |
CESTAT, Kolkata |
| Party Name |
Permanent IP Systems |
| Department |
CCEC&ST, Siliguri |
| Demand |
- |
| Judge |
Dr.Sathapathy, D.N.Panda |
| Counsel |
D.Acharya, O.P.Khanduja |
|
|
GE India is engaged in the manufacture of excisable goods and had given an extrusion machine on lease under an agreement as user charges. Revenue treated this as banking and financial services and it culminated into confirmation of demand for ST with interest and penalty under various sections. While the original adjudicating authority confirmed the demand, the commissioner of Appeals set aside the order of the original authority. Hence, the Revenue filed this appeal against the order of the Commissioner.
|
Whether lease of extrusion machines can be treated under the head “Banking and Financial services”? |
- Lease of the machine by GE India amounts to providing Banking and Financial services as per the definition under 65(12) of the Finance Act, 1994 read with section 65(14) of the same Act.
- Vide Board’s Circular No.3/11/1/2002-TRU dated 1.8.2002, banking and other financial services provided by body corporates other than those already specified earlier have also been covered under Service Tax w.e.f 16.8.2002. In other words, it is not necessary that the provider of service has to be business and financial service company, but any corporate body providing the service would be liable to tax.
|
|
GE India relied upon the decision of the Tribunal in the case of M/s Thermax Ltd. Vs CCE, Pune [2007 (8) STR 487 Tri-Mum] wherein it was held that supply of goods like boilers etc. on lease basis without charging any amount on account of lease management fee or documentation does not amount to providing banking and financial services.
|
|
PIS are in the business of importing software from Taiwan and the same software is being incorporated in the Public Address System and Home Automation System being manufactured by the PIS which are exported during the material time.
|
Whether import of software can be held to be “import service”?
|
|
- Leasing is said to be a financial leasing if the ownership of assets on lease is transferred to lessee by the end of the lease term and the intention is created at the very inception of the lease itself. In this case, the agreement does not provide for transfer of assets at the end of the term. Further, the period of lease is renewable and does not effect the economic life of the asset which is invariably a consideration in lease.
- In case of leasing, the amount recovered as principle is not the consideration for services rendered but is credit to the account of the lessor. ST in the case of financial leasing including equipment leasing will be leviable only on the other charges and not on the principle amount.
|
|
- Imported software is not a service and not liable to service tax.
- Such software becomes an integral part of the PAS and HAS manufactured by the company and subject to excise duty.
- Such software can neither be said to be service nor liable to any service tax.
- Even if such services are considered to be import of services, the recipients not liable to pay ST for that material period, as the law was amended subsequently w.e.f. 18.04.2006 whereas, here the relevant period is from March 2005 to March, 2006.
- The entire demand is in any case time barred.
|
Part of the software imported can be considered as service as import of the same involves downloading of data.
|
|
|
- Since the import is in the digital form, its classification as goods or services is not free from doubt.
- Even if the import be import of services, PIS not liable to pay tax as transaction was made before the amendment.
- Order passed by the Commissioner is void as it is exceeding his jurisdiction.
|
|
| |
“We waive the requirement of pre-deposit during pendency of appeals. Question of limitation will be taken up while hearing the regular appeals. Considering the high amount of revenue involved, both sides will be at liberty to apply for early hearing of the cases, if so advised.”
|
|
| Authority |
CESTAT, Ahmedabad |
| Party Name |
Ganpati Petrochemicals |
| Department |
CCE, Vapi |
| Demand |
Rs.12,75,715/- |
| Judge |
A.Wadhwa, B.S.V.Murthy |
| Counsel |
Aparna H. |
|
| Authority |
CESTAT, New Delhi |
| Party Name |
Jindal Steel & Power Ltd. |
| Department |
CCE, Raipur |
| Demand |
Rs.49,00,634/- |
| Judge |
S.N.Jha, M.V.Veeraiyan |
| Counsel |
Reena Khair |
|
Ganpati Petrochemicals is a registered C&F agent and has entered into two separate agreements with M/s Haldia Petrochemicals Ltd. One is a consignment Stockist Agreement and the other is an agreement for appointment as a del-credre agent. Both were renewed by fresh agreements in 2002. A show cause notice was issued on 17.12.2004 for levying ST for services provided on the basis of the second agreement to the amount of Rs. 12, 75,715/- along with imposition of penalty and interest.
|
|
JSPL has entered into two agreements with JFE Corporation, Japan for getting technical assistance for putting up rail and universal beam mill, thereby receiving service. They paid education cess and after claiming deduction paid service tax to the amount of the deducted value. Show cause notice was issued by the Revenue demanding ST amounting to Rs.40,00,634/- on the ground that benefit of notification no.18/2002-ST dated16.12.2002 wherein it was held that. The commissioner had ordered recovery of Rs. 21,56,382/- on the ground that JSPL has wrongly debited the said amount from CENVAT account.
|
|
Whether services of del-credre agency are covered under the category of Clearing & Forwarding agency services and leviable to ST?
|
|
Whether JSPL is entitled to utilize CENVAT credit for payment of ST on the output services rendered by them to one M/s Vallabh Steels?
|
|
- The lower authority failed to recognize the fact that there were two types of services being rendered and there were two separate contracts for the same.
- They have been paying ST on the amount received by them for service rendered as consignment stockist.
- They are not paying ST on del-credre agency since it was not covered by C&F service.
|
|
- They need not pay the STbecause the services received by them were only relating transfer of technology and not consulting of engineer service.
- ST paid by them was as per deemed service provider as mentioned in the CENVAT Credit Rules.
- Having paid the ST, they were entitled to the CENVAT credit and that no time limit is mentioned for availing the CENVAT credit account.
- Therefore denial of CENVAT Credit was not correct.
- The fact that the value of output services was less as compared to the input services is irrelevant as input services are not directly co-related to the value of output services as input services are not used up immediately and are on a long term basis.
- Payment of educational cess on ST was wrongly made on the advice of the Department.
|
|
Lower adjudicating authority missed to consider the second agreement and only looked into the first one. Appellants were rendering two types of services and they have paid ST correctly on C&F agency services and they are not liable to pay ST on del-credre services.
|
|
- Credit taken is in order.
- Utilization of credit is permissible in view of the extended definition of output service,
- Credit taken and its utilization is regular.
- JSPL not required to pay education cess as demand relates prior to the 10.9.2004.
|
|
