2026-VIL-1430-CESTAT-ALH-ST
  1. Home
  2. 2026-VIL-1430-CESTAT-ALH-ST

SERVICE TAX CESTAT Cases

Service Tax – Business Support Services – Reimbursement of operating costs of employees by Group companies – Appellant's employees worked for Group companies and Appellant raised debit notes on Group companies for reimbursement of operating costs of such employees – Whether such reimbursement amounts to 'Business Support Service' requiring 'outsourcing' of business functions – HELD – For any activity to be covered under Business Support Service, the service recipient must be a business entity using services in relation to business or commerce and must have 'outsourced' its functions to the service provider. In the present case, Group companies had not 'outsourced' any of their business functions to the Appellant; rather Appellant had excess manpower which was utilized by performing activities in relation to business functions of Group companies – Since there is no 'outsourcing' of activities or business functions involved, merely sharing of expenses or cost relating to employees performing common activities cannot be categorized as rendering of Business Support Service – Further, no Service Tax is payable on reimbursement of expenses – The demand of service tax confirmed on 'reimbursement of employee costs' under the category of Business Support Services is not sustainable and is set aside – The appeal is allowed - Service Tax – 'Deemed Sale' of goods – Appellant entered into contractual arrangements with entities wherein multi-function printers installed by Appellant remained in possession of customers for their use throughout contract period – Appellant charged customers on basis of number of prints or copies at pre-determined per page price and was responsible for supplying toner and consumables – Whether transaction involving transfer of right to use goods amounts to 'deemed sale' beyond purview of service tax – HELD – A transaction involving transfer of right to use goods would amount to 'deemed sale' which is beyond the purview of service tax – Appellant satisfied all five attributes for transfer of right to use goods as laid down in Supreme Court judgment. Once the printers were delivered to customers and installed at their location, there was exclusion of transferor – Merely because maintenance of equipment was undertaken by Appellant, absence of effective control or right to use by customers cannot be presumed – Further, Notification No. 12/2003-ST dated 20.6.2003 provides exemption from Service Tax to value equivalent to value of goods and materials sold by service provider to service recipient – In present case, Appellant transferred possession and property in spare parts, toner, consumables during maintenance of multi-function printers and regularly discharged VAT on said materials. The value of goods and materials supplied is thus exempted from Service Tax under Notification No. 12/2003-ST – The demand of service tax confirmed on consideration received for provision of print services is not sustainable and is set aside - Service Tax – Commercial Training and Coaching Services – Supply of course material – Appellant engaged independent service providers to impart courses and operate Career Development Centers – Students approached service providers, enrolled and paid fees directly to them – Appellant merely sold course material to independent service providers as evidenced by Agreement dated 1.12.2010 and invoices – Whether Appellant was engaged in providing 'Commercial Training or Coaching Service' or was merely selling course material – HELD – Appellant is not engaged in providing Commercial Training or Coaching Service – Instead it merely sold course material to independent service providers – The transaction is between student and service provider and Appellant is not party to it. Even if it were assumed that Appellant is engaged in providing Commercial Training or Coaching Service, the value of goods sold in course of provision of such service is liable to be excluded from value of such services – This view is supported by decision in Cerebral Learning Solutions Pvt Limited case wherein it was held that value of books or course material supplied by assessee to students is required to be included in value of taxable service but Notification No. 12/2003-ST dated 20.6.2003 exempts so much of value of taxable services as is equal to value of goods and material sold by service provider – The demand of service tax confirmed on value of course material supplied under category of Commercial Training or Coaching Service is not sustainable - Service Tax – Advertising Agency Service – Display of Intel logo on computers – Appellant merely displayed logo of Intel on computers manufactured by it – Logos were provided by Intel and Appellant did not design or make such logos – Whether activity of mere printing, displaying of Intel logo qualifies as 'Advertising Agency Service' – HELD – Term 'Advertising Agency' is not defined under Section 65B of Act prevailing under negative list regime. Under positive list regime prevailing till 30.6.2012, scope of 'advertising agency' covered making, preparation, display or exhibition of advertisement – The CBIC vide Circular No. 345/4/97-TRU dated 16.8.1999 clarified that if assessees were engaged in designing, visualizing and conceptualizing advertisements, then only they would be liable to pay service tax – Thus, Circular has interpreted 'Advertising Agency Service' as something more than mere printing of advertisement – In present case, Appellant is merely displaying logo of Intel on computers manufactured by it. Such logos are provided by Intel and Appellant does not design or make such logos – Appellant has not rendered any service in relation to conceptualizing, visualizing or designing advertisement – Activity of mere printing, displaying of Intel logo does not qualify as 'Advertising Agency Service' and no service tax is leviable on said transaction - Service Tax – Comprehensive Service and Maintenance Contracts – Abatement under Notification No. 12/2003-ST – Appellant provided Comprehensive Service and Maintenance Contracts services supplying toner, developer, spares during provision of maintenance services and paid appropriate sales tax on value of materials and goods involved – Commissioner denied benefit of abatement under Notification No. 12/2003-ST on ground that Appellant did not provide details relating to value of goods used for providing services – Whether Appellant entitled to benefit of abatement under Notification No. 12/2003-ST when VAT already paid on goods supplied – HELD – It is undisputed fact that Appellant provided goods like toner, developer, spares during provision of maintenance service and paid appropriate VAT on value of materials and goods involved as per State sales tax legislations, evidenced by invoices and Chartered Accountant certificate – Appellant has not availed any CENVAT credit on such spare parts, toner, consumables – Appellant has been regularly discharging VAT liability on spare parts, toner, consumables supplied during provision of CSMC services. Thus, Appellant fulfilled all conditions prescribed in Notification 12/2003-ST for goods supplied in course of provision of CSMC services – Appellant entitled to avail benefit of abatement under Notification No. 12/2003-ST – Once VAT or Sales Tax has been paid on said transaction, demand of service tax on same transaction is untenable – The demand of service tax confirmed on CSMC services is not legally sustainable and is set aside - Service Tax – Extended Period of Limitation – Time bar – SCN issued on 23.10.2015 for period July 2010 to June 2015 – Demand raised for period up to September 2014 is beyond normal period of limitation – Special audit conducted approximately 3.5 years prior to issuance of SCN; relevant documents and information available with Department since 2012 – Whether demand for period up to September 2014 is time-barred and whether inordinate delay of 3 years in issuing
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GST Critical issues: ITC on...
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

Security-Code
New Code?

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.

Security-Code
New Code?

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?