2024-VIL-825-CESTAT-BLR-ST
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SERVICE TAX CESTAT Cases

Service Tax – Rule 2(l) of CENVAT Credit Rules, 2004 – Receipt of manpower service – Tax liability – Appellants are registered with Department for rendering various taxable services – On completion of investigation initiated on basis of intelligence, Revenue issued show cause notice to Appellant proposing demand of Service Tax under various heads – Commissioner confirmed demands proposed in show cause notice – Whether Appellant is liable to discharge service tax under reverse charge mechanism for services received under category of Manpower Supply Agency Service – HELD – Appellant had entered into a service agreement with overseas company for providing personnel to work with Appellant and salaries are agreed to be paid in convertible foreign currency – Deputed personnel under employment with Appellant was not in any way subjected to any kind of instruction or control or direction or supervision of overseas company and they would report only to Appellant’s management – There is no employer-employee relationship between overseas company and dispatched personnel – Service tax is applicable on amount paid by Appellant to overseas company for receiving manpower service – In absence of any suppression on part of Appellant, demand is restricted to normal period of limitation – Appeals disposed of - Management consultancy services – Demand of tax – Whether demand confirmed under category of Management Consultancy Services is sustainable – HELD – For demand raised on account of said services, Appellant claimed that these are in nature of reimbursable expenses – Appellant vehemently argued that reimbursable expenses could not be included in gross tax value – Commissioner has not recorded any specific finding about true nature of said expenses as claimed by Appellant – Matter remanded to Commissioner, to verify claim of Appellant and decide issue in accordance with law - Collection of amount from unsuccessful bidders – Tax liability – Whether amount collected from unsuccessful bidders is liable to service tax under category of Airport Services – HELD – Appellant has collected amount from unsuccessful bidders who participated in tender process floated by Appellant in connection with various services like cargo handling, aviation fuel facility, ground handling, flight catering, etc. in course of providing Airport Services – Amounts so collected and retained by Appellant are in no way connected to rendering of Airport Services, as there is no relationship of service receiver and service provider between Appellant and unsuccessful bidders – Amount collected as a pre-bid offer from unsuccessful bidders cannot be considered as a consideration for rendering Airport Services and accordingly not leviable to Service Tax - Admissibility of credit – Whether CENVAT Credit availed by Appellant on various input services are admissible – HELD – On issue of availing CENVAT Credit on various input services, namely, photography and videography services, asset hiring, landscaping services, office rent, civil and interior work, etc., Appellant has argued that these services are held to be ‘input services’ and duty paid is admissible to credit – All these services satisfy definition of “input service” as prescribed under Rule 2(l) of the Rules, hence, Cenvat Credit availed on various input services are admissible – Demand raised under this head set aside.
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