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Finance Bill, 2014 enacted into Finance Act, 2014, Date of Enactment 06.08.2014Budget 2014-15 : Sale of space for advertising has been made taxable except for print media.Budget 2014-15 : Radio Taxis are now taxable.Budget 2014-15 : Education : The definition of Auxiliary Education Services has been scraped.Budget 2014-15 : Works Contract : 2 slab rates prescribed in place of earlier 3 slabs.Budget 2014-15 : E-payment of Service tax is being made mandatory with effect from 01.10.2014.Budget 2014-15 : POPS: Definition of intermediary is being amended to include the intermediary of goods in its scope.

Case Laws
STO 2014 CESTAT 56
[Date of Order: 2014-01-08]

Service Tax: Works contract services/ Commercial or industrial construction service, during 01/06/2007 to 31/03/2011 for different departments of several State Governments: Activity of supply and construction of pipelines for supply of drinking water, evacuation of drainage and irrigation: Scope and liability: Since the works contract service provided is towards construction of pipeline falling within sub-clause (b) of Section 65(105)(zzzza) of the Finance. Act, 1994 and the service was provided not for business or industrial purposes but for facilitating Governmental works of drinking water supply, irrigation and drainage, these works and the services provided thereunder are excluded from the purview of works contract service in view of the restricted trajectory of sub-clause (b). The contrary conclusion in the impugned order, that these works fall within sub-clause (e) of Section 65(105)(zzzza), is prima facie unsustainable. This is the prima facie view while granting waiver of predeposit and stay. (Para 2).

Commercial or industrial construction service: Petitioner have entered into two contracts, with NTPC. One contract is exclusively for supply of manufactured goods and the other is for rendition of services under the composite contract involving incorporation of goods and rendition of services. The two contracts are however and in terms of the contracts thereunder, mutually dependant and connected. The adjudicating authority, on the basis of the Explanation to Rule 3(1) of the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007, computed the value of the transaction covering the two contracts (viz. the supply portion and the goods & services portion) for assessment of service tax, after granting the benefit of the composition scheme. The Explanation to Rule 3(1) of the 2007 rules was introduced vide Notification No. 23/2009-ST dt. 07/07/2009. Execution of the works contract had commenced prior to 07/07/2009 and receipt of the consideration for providing such works contract service to NTPC was also prior to 07/07/2009. The inclusion of the value of the transaction covered by the supply contract for assessing the service tax liability though after granting the benefit of the composition scheme is therefore, prima facie, unsustainable. (Para 3,4,5).

Partial pre-deposit ordered.

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STO 2014 CESTAT 58
[Date of Order: 2014-01-08]

Service Tax: Works contract service to the Delhi University for creation of infrastructure by way of commercial or industrial construction for facilitating the Commonwealth Games, 2010; for construction of godowns and shops etc. for the Agricultural Produce Market Committee (APMC for short); for creation of infrastructures in bus terminals for Road Transport Corporations in several States: Scope and liability: In respect of services provided to the Delhi University for creation of infrastructure for facilitating Commonwealth Games and services provided to several Road Transport Corporations for creation of infrastructure in transport terminals, the petitioner claims immunity from service tax liability under the taxable works contract service on the ground, inter alia, that works contract services provided in respect of transport terminals are excluded from the scope of the taxable service in the main part of the definition of works contract service, in Section 65 (105) (zzzza) itself and that the definition of works contract in the said provision in sub-clause (b) viz. construction of a new building or a civil structure is a taxable service only when the same is primarily for the purpose of commerce or industry; and provision of works contract services for games or sports organized under the aegis of the Government would be amount to facilitating a public utility rather than for furtherance of business or commerce. For this contention, reliance is placed on the Final Order of learned Division Bench of this Tribunal in B.G. Shirke Construction Technology Pvt. Ltd. Vs. CCE, Pune-III STO 2013 CESTAT 518. This decision, prima facie, supports the contention of the petitioner with regard to the claim for exclusion of service tax liability on works contract service provided for Commonwealth Games, 2010. The works contract services provided for creation of bus terminal infrastructure for several Road Transport Corporations is also, prima facie, outside the purview of the taxable service, in view of the provisions of Section 65(105)(zzzza). However, no prima facie case made out for exclusion from service tax liability in respect of works contract services provided for APMC since facilitation of marketing activities by market committees is clearly for furtherance of business and commerce.(Para 1,2).

Partial pre-deposit ordered.

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STO 2014 CESTAT 59
[Date of Order: 2014-01-08]

Service Tax: Erection, commissioning or installation service during June 2005 to June 2007 under an agreement with the Government of Andhra Pradesh for execution of works described as design, supply, installation, testing, commissioning of pumping machinery, transformer sub-station, raising mains including construction of pump house and delivery cistern, etc. of Tadipudi Lift Irrigation Scheme: Scope and liability: Since the works executed by the petitioner are not for commerce or industry but in furtherance of irrigation and as public utility infrastructure, the entire transaction prima facie falls outside the taxable 'commercial or industrial construction' service. Adjudicating authority was also conscious of the fact that civil works and pipe line works fall outside the scope of "erection, commissioning or installation" service and had therefore artificially vivisected the contract and extracted a proportionate value of the contract, relatable to hydro mechanical works and electro mechanical works and brought to tax the presumptive value of these components of the composite contract. The basis of vivisection is conjectural and impermissible. Pre-deposit waived.(Para 4).

Stay granted.

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STO 2014 CESTAT 62
[Date of Order: 2014-01-08]

Service Tax: Loan-licence agreement for manufacture of bulk medicines on job-work basis at the Petitioner's factory premises: Scope and liability: Similar services provided by M/s. Jubilant Industries Ltd. to Jubilant Life Sciences Ltd. was classified as 'Business Support Services' (BSS) and the consideration received therefore borough to service tax. Jubilant preferred an appeal to this Tribunal. In the final order reported in STO 2013 CESTAT 142 this Tribunal concluded that the activity of the appellant-Jubilant did not amount to Business Support Services. The Tribunal agreed with the assessee-Jubilant that since the activity amounted to manufacture and was subject to excise levy, it would not amount to a taxable service falling within Section 65(19)(v). Pre-deposit waived.(Para 4).

Stay granted.

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STO 2014 CESTAT 64
[Date of Order: 2014-01-08]

Service Tax: Cenvat credit distribution under Rule 7 of the CENVAT Credit Rules 2004: Scope: In the CCE, Bangalore Vs. Ecof Industries Pvt. Ltd. STO 2011 Kar 1174, the Hon'ble High Court of Karnataka had held that there are only two restrictions regarding distribution of credit -- the first restriction is that credit distributed should not exceed the amount of service tax paid and the second restriction is that the credit should not be attributable to services used in the manufacture of exempted goods or rendering exempted services. Other than these restrictions, there are no fetters placed on the distribution of the credit and credit can be distributed to any of the manufacturing units of the assessee irrespective of whether the services were received or consumed there. In view of the aforesaid decision of the Hon'ble High Court of Karnataka, the appellant has made out a prima facie case for grant of stay. Accordingly, pre-deposit of the dues waived un-conditionally(Para 5).

Stay allowed.

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STO 2014 CESTAT 17
[Date of Order: 2014-01-07]

Service Tax: Whether Section 76 and 78 penalty can be simultaneously imposed: Waiver of pre-deposit of penalty and stay: Scope: On the issue involved in this case, there are contrary decisions of the High Courts as to whether Section 76 and 78 penalty can be simultaneously imposed by a show cause notice which was issued after the amendment to the provisions in Section 78. The issue needs deeper consideration of the bench. Pre-deposit of penalty waived(Para 2).

Stay granted.

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STO 2014 CESTAT 100
[Date of Order: 2014-01-07]

Penalty: Section 76 & 78: Penalty under section 78 not contested: Penalty under Section 76 set aside as there was sufficient cause for non deposit of tax.

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STO 2014 CESTAT 24
[Date of Order: 2014-01-07]

Service Tax: Activity of polishing of utensils, on job work basis, during the period 2005-2006 to 2006-2007: Business Auxiliary Services: Scope and liability: Polishing of raw utensils amounts to manufacture in as much as the same is covered by the definition of manufacture as appearing in Section 2 (f) of Central Excise Act, 1944. If that be so, he cannot be held to be providing any service. The Tribunal in the case of MR SHARWANKUMAR Vs. CCE, Chandigarh - I reported in STO 2012 CESTAT 982 has held that processes of denting and painting are essential for completion of manufacture of bus bodies and, therefore, these processes are to be considered as manufacturing activities within the meaning of Section 2 (f) of Central Excise Act, 1944. By applying the ratio of the same, processes of polishing of raw utensils have to be held as manufacturing activity. Pre-deposit waived(Para 2,4).

Stay granted.

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STO 2014 CESTAT 33
[Date of Order: 2014-01-07]

Service Tax: CENVAT credit on "Civil Construction Service" and "Rent a Cab" operator services: Admissibility: There is an error in the computation of service tax demand. However; this fact was not brought to the notice of the adjudicating authority when the impugned order was passed. Further, the eligibility to CENVAT credit in respect of construction service stands decided in favour of the appellant by the decision of Hon'ble High Court of Andhra Pradesh in the case of C.C.E., Visakhapatnam-II Vs. Sai Sahmita Storages (P) Ltd. CEO 2011 AP 10. Invoices in respect of availment of CENVAT credit on rent a cab services, wherein the particulars of the service provider along with the registration number, particulars of the service recipient, value of service provided and service tax charged are clearly indicated. Therefore, CENVAT credit on the strength of these documents could not have been denied to the appellant. (Para 5.1, 5.2).

Appeal allowed by way of remand.

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STO 2014 CESTAT 45
[Date of Order: 2014-01-07]

Service Tax: Works Contract service, namely, Turnkey Projects including engineering, procurement and construction or commissioning (EPC) projects: Works were executed for the Govt. of Andhra Pradesh for supply of drinking water, whether these were not primarily for commerce or industry but for public utility and are excluded from the scope of the taxable service in sub-clause (b) of Section 65 (105) (zzzza): Scope: Substantially similarly nature of works came up for consideration in Stay Application No.309/2012 in ST Appeal No. 501/2012 and it was held that works were for pipe-line construction since the pipe-line construction was for provision of drinking water supply and irrigation, the works were outside the ambit of the taxable service enumerated in 65 (105) (zzzza) (b). For the reasons alike as recorded there is a strong prima facie case in favour of the petitioner and grant waiver of pre-deposit in full(Para 4,5).

Stay granted.

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STO 2014 CESTAT 225
[Date of Order: 2014-01-07]

Cenvat credit: Input service GTA for bringing motor cycles: Outward service “Authorised Service Station”: Credit admissible.

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STO 2014 CESTAT 13
[Date of Order: 2014-01-07]

Service Tax: Services for construction of residential complex: Demand for construction activities carried out by the appellant at 12 - 13 different places: Jurisdiction: Scope: The summons were being issued to Director of the appellant unit, to their registered Mumbai Office. Even the show cause notice is addressed to their Mumbai Office. This reflects that the appellant was having registered office in Mumbai and as per the appellant all the services were being offered from Mumbai. As per the service tax Order No. 1194 dated 29.06.1994 issued by the Board, the jurisdiction of various officers to decide the service tax dispute stands detailed. In terms of the said order, Commissioner of Central Excise will have the jurisdiction as defined in sub-rule (ii) of Rule 2 of Central Excise Rule, 1994 in terms of the Notification No. 14/2002-CE (NT) dated 8.3.2002, as amended, Commissioner of Central Excise, Noida will have jurisdiction to decide the cases in the Districts specified therein and admittedly the State of Maharashtra or Delhi is not one of the specified territories. The appellant's reliance on the decision of the Tribunal in Vihar Ahar Pvt. Ltd. Vs. CST, Ahmedabad- STO 2012 CESTAT 875 and Ores India Pvt. Ltd. VS. CCE, Cus. & ST, Bhubaneshwar-II- STO 2007 CESTAT 1216 is supportive. Inasmuch as the Commissioner has not examined the angle of jurisdiction from the above point of view and also non consideration of non availament of abatement in terms of Notification in the light of the Larger Bench decision of the Tribunal in the case of Bhayana Builders (P) Ltd. Vs. CST, Delhi - STO 2013 CESTAT 743 LB, matter remanded to Commissioner for fresh look into the angle of jurisdiction.(Para 8).

Appeal disposed off.

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STO 2014 CESTAT 14
[Date of Order: 2014-01-07]

Service Tax: Business of providing mandap keeper: Cenvat credit: Scope and admissibility: Appellant were availing cenvat credit of service tax paid by Indian Hotels Limited on Management or Business Consultancy which is one of the specified services in terms of provisions of Rule 6(5) of Cenvat Credit Rules, the appellant was availing 100% of the credit of tan paid. Revenue entertained a view that the service rendered by Indian Hotels Limited were franchisee services. It is a well settled proposition of law that classification cannot be changed in the hands of the service recipient. Tribunal in the appellant's own case involving the same issue has granted unconditional stay vide Order No. S/579/12 dated 12.03.2012. As such by following the same, pre-deposit of the same is waived.(Para 2,4). The provision of Notification No. 21/97-ST. dated 26-06-1997, as amended by Notification No 12/2004-ST dated 10.09.2004, the debar in the said notification was only in respect of availment of credit for duty paid on input or capital goods and not of service tax paid on input services. The said debarring was introduced w.e.f. 1.3.2006 vide Notification No. 1/2006-CE dated 1.3.2006. As such the appellant has a good prime-facie case for the period prior to 1.3.2006.(Para 5).

Appeal disposed off.

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STO 2014 CESTAT 43
[Date of Order: 2014-01-06]

Service Tax: Tour operator service' and 'rent-a-cab service rendered to SEZ unit: Demand: Scope: In view of the provisions of Rule 31 of the Special Economic Zone Rules, 2006, issued in conformity with provisions of Section 26(1)(e) of the SEZ Act, 2005; provisions of exemption Notification No. 4/2004-S.T. dated 31/03/2004 [providing exemption from liability to service tax on providing of any taxable service to a developer of the Special Economic Zone or a unit (including a unit under construction) of a Special Economic Zone by any service provider, for consumption of service within the Special Economic Zone]; and the judgment of the learned Division Bench of this Tribunal in Norasia Container Lines Vs. Commissioner of Central Excise, New Delhi reported in STO 2011 CESTAT 251, the petitioner have made out a strong prima facie case for grant of waiver of pre-deposit(Para 3).

Stay granted.

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STO 2014 CESTAT 150
[Date of Order: 2014-01-06]

Valuation: Issue regarding non-inclusion of value of free supply of inputs in gross value of discharge of tax is covered by decision of larger bench of Tribunal in the case of Bhayana Builders: Demand set aside.

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STO 2014 CESTAT 52
[Date of Order: 2014-01-06]

Service Tax: Mandap Keeper Service, Renting of immovable property, during 2009-10 and 2010-11: Scope and liability: The income or property of the State which is immune to federal taxation under the provision of article 289 of the Constitution does not accommodate the property of a body create by a statute, such as the appellant. The property and income of the State, in Article 289, connotes the State as enumerated in the first schedule of the constitution and not every authority or body falling within the scope of an the instrumentality of the State or other authority, in Article 12 of the Constitution. The decision of the Supreme Court in APSRTC Vs Commissioner of Income Tax - AIR 1968 Supreme Court 1486 and in New Delhi Municipal Committee Vs. State of Punjab - (1997) 7.sec 339, conclude the issue on this aspect, against the appellant petitioner. In respect of renting of immovable property, given on lease to the Director General Special Protection Force; the A.P. Women's Commission and to the State Election Commission are not for or in furtherance of Commerce of Business, hence are outside the purview of the definition of renting of immovable property in Section 65(105)(zzzz) of the Act. Therefore, renting of the petitioner's immovable property may not amount to renting of immovable property for the use or in furtherance of business of commerce. (Para 2,3).

Service of Sale of space or time for advertisement: Larger bench in Municipal Corporation, Jalandhar Vs. CCE, Ludhiana reported in STO 2011 CESTAT 1013 held that permitting the use of property for fixing poles/structures for putting up bill boards for advertisement or a permission granted by the Municipal Corporation for fixation of Kiosks for advertisement on street light poles would not amount to selling space for advertisement nor amount to providing any service in relation to sale of space for advertisements(Para 5).

Pre-deposit ordered.

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STO 2014 CESTAT 7
[Date of Order: 2014-01-06]

Service Tax: Excess credit availed on capital goods in excess of 50%, which is not utilized by the assessee and remained unutilized: Demand of interest: Scope: Hon'ble Supreme Court's decision in the case of UOl Vs. Ind-Swift Lab. Ltd. reported in CEO 2011 SC 1 was taken note of by the Hon'ble Kanataka High Court in the case of CCE, Bangalore Vs. Bill Forge Pvt. Ltd. reported in CEO 2011 Kar 557 and after interpreting the declaration of law by the Hon'ble Supreme Court, the Hon'ble High Court held that where the excess credit availed is not utilized by the assessee and remained unutilized in their account books, the assessee cannot held liable to pay any interest. The said decisions of the Karnataka High Court in the case of CCE, Bangalore Vs. Bill Forge Pvt. Ltd. reported in 2011-TIOL-799-HC-KAR-CX stands followed by the Tribunal in the number of decisions. One such reference can be made to the Tribunal's decision in the case of Gartex reported in CEO 2013 CESTAT 34. Commissioner (Appeals) has categorically given a finding that credit was un-utilised and there is no dispute about the same, the ratio of law declared by the Hon'ble Karnataka High Court would be fully applicable. Accordingly confirmation of interest is set aside(Para 5).

Appeal allowed.

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STO 2014 CESTAT 8
[Date of Order: 2014-01-06]

Service Tax: Activity of undertaking the job of fabrication and erection of various steel structurals at site for and on behalf of their client: Erection, comissioning and installation service: Scope and liability: Tribunal's decision in the case of Neo Structo Construction Ltd. STO 2010 CESTAT 120 dealt with the activity of the fabrication and erection of the structurals for various industrial project at their client's site. Identical activity is involved in the present case also. The Tribunal concluded that such an activity would amount to manufacture and not rendering of any service at this stage. Apart from the above, as the main contractor has discharged we service tax liability on the gross value of the contract given to him and the present appellant is only a sub-contractor, the entire exercise would be revenue neutral. Pre-deposit waived (Para 5,6,8).

Stay granted.

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STO 2014 CESTAT 11
[Date of Order: 2014-01-06]

Service Tax: Club services for the period 16.06.2005 to 31.3.2009: Demand: Waiver of pre-deposit and stay: Scope: Club services category stands stuck-down or ultra-virus by the Hon'ble Gujarat High Court in the case of Sports Club of Gujarat Ltd. Vs. Union of India reported in STO 2013 Guj 898 Further, the Hon'ble High Court of Jharkhand in the case of Ranchi Club Ltd. reported in STO 2012 Jhar 974 has held that even though the club had distinct legal entity, it was acting only as an agent for its members and no service tax can be charged on the said club services. Pre-deposit waived(Para 1,2).

Stay granted unconditionally.

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STO 2014 CESTAT 12
[Date of Order: 2014-01-06]

Service Tax: Tour operator's service: Activity of logistic arrangement for Kailash Manasarovar Yatra: Limitation: Scope and liability: The letter dated 30/5/08 of the Joint Secretary, Ministry of External Affairs to the CBEC giving details about the role of Kumaon Mandal Vikas Nigam in organizing Kailash Manasarovar Yatra and the rates being charged in respect of the same and also requesting the CBEC to exempt this activity from service tax, it is clear that the department was aware about the activity of Kumaon Mandai Vikas Nigam in respect of Kailash Manasarovar Yatra. Moreover, the appellant are a undertaking of the Government of Uttranchal and the Kailash Manasarovar Yatra was being organized by the Ministry of External Affairs. Thus, it would not be correct to accuse the appellant, of suppressing the relevant facts, from the department with intent to evade the service tax and as such the extended limitation period for demand of service tax under proviso to Section 73 (1) of the Finance Act would not be applicable. Since, the show cause notice for demand of service tax for the period from 2005-2006 to 2008-2009 has been issued on 20th October 2010, the same is prima facie time barred. Thus, the appellant have a strong prima facie case on limitation. The requirement of pre-deposit of the service tax demand, interest thereon and penalty is, therefore, waived(Para 6).

Stay granted.

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