2025-VIL-1280-CESTAT-DEL-ST
  1. Home
  2. 2025-VIL-1280-CESTAT-DEL-ST

SERVICE TAX CESTAT Cases

Service Tax – Grant of mining right – Payment of royalty – Tax liability – Appellant is engaged in construction of roads & other civil constructions – After audit, department issued show cause notice to Appellant, proposing demand of Service Tax and Cenvat Credit, by invoking extended period of limitation – Commissioner confirmed demands as proposed in show cause notice – Whether Appellant is liable to pay Service Tax on royalty charges paid against grant of mining right – HELD – Undisputedly, Appellant was quarrying stones from designated mines allocated to them by Government. In order to determine either levy of services tax is applicable on a particular activity, it is necessary to determine point of time when such activity is provided or agreed to be provided. Since agreements between Appellant and State Government regarding grant of mining right were executed prior to date the transaction in mining of right to use natural resources became taxable, Appellant would not be liable to pay service tax. Demand confirmed on this count is set aside – The appeal is partly allowed - Cenvat Credit on Capital goods – Demand of credit – Whether demand confirmed on account of denial of Cenvat Credit availed in respect of capital goods is sustainable – HELD – Appellant is providing taxable and exempted services. Capital goods against which Appellant have claimed CENVAT credit were not used exclusively for providing exempted services, but were used for providing both taxable and exempted services. It is settled law that, if capital goods are used for providing both taxable and exempted services, CENVAT credit in respect of such capital goods cannot be denied or varied. There is no merit in denial of credit availed in respect of capital goods. Demand confirmed on this count is set aside - Input services – Denial of cenvat credit – Whether denial of Cenvat Credit availed in respect of input services is sustainable – HELD – Law is quite clear that no credit would be admissible in respect of input and input services which have been solely used for providing exempt services or used for manufacture of exempt goods. In case of input services which are used for providing both taxable and non-taxable/exempt services, credit is to be reversed as per formula provided under Rule 6(3) of the Rules. Impugned order fails to determine amount in correct perspective and have compared amount of credit taken in respect of input services with amount determined on basis of seven percent of value of exempted services, and asked for reversal of entire amount of credit taken in respect of input services. For determination of correct amount that needs to be reversed in terms of above observations, matter needs to be remanded back to original authority - Work contract services – Whether Commissioner is justified in holding that Appellant is liable to pay Service Tax in respect of work contract services – HELD – Commissioner in its impugned order has specifically recorded the details of work order for construction of approach road. Commissioner has examined work order specifically to conclude that these works involved transfer of property in goods and hence qualify as “work contracts” as defined under the Act. Work order specifically provided that value of work order is inclusive of service tax calculated @4.944% of work value. Appellant was well aware that service tax was being paid by service recipient to Appellant and he was duty bound to deposit same with exchequer. Impugned order has rightly confirmed demand raised in respect of work contract services - Extended period of limitation – Whether invoking of extended period of limitation is justified in facts and circumstances of case – HELD – Impugned order has recorded appropriate reasons for invoking extended period of limitation for making demand. Appellant had not filed ST-3 returns for period of dispute at time of first audit and have not produced all records before audit officers. It is not the case of second audit, but a case of re-audit of records of Appellant after taking note of fact that Appellant had not cooperated at time of first audit and have not provided all records to audit officers for relevant period. Factum of not providing records for audit itself amounts to suppression of facts with intent to evade payment of service tax. On consideration of facts and circumstances of case, invoking of extended period of limitation is justified.
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GST2.0 - Expected GST Diwali Bonaza
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?