Cenvat credit taken on inputs cannot be denied merely because original manufacturer of inputs is not traceable
Kirtida Silk Mills Vs. Commissioner of Central Excise & Customs, Surat-1 [(2014) 50 taxmann.com 264 (Gujarat)]
In the instant case, Kirtida Silk Mills (the Appellant) availed Cenvat credit of duty paid on inputs, which was denied by the Department and the proceedings were initiated for recovery of Cenvat credit wrongly taken. The Department invoked extended period of limitation to deny Cenvat credit taken by the Appellant on the ground that original manufacturer of the inputs could not be traced.
Being aggrieved, the Appellant preferred an appeal before the Hon'ble Tribunal, wherein the Hon'ble Tribunal relying upon its earlier order dated January 24, 2011, upheld denial of Cenvat credit. The Appellant argued that order January 24, 2011of the Hon'ble Tribunal was reversed in Prayagraj Dyeing & Printing Mills (P.) Ltd Vs. Union of India [(2013) 30 taxmann.com 139/38 STT 525 (Guj.)](Prayagraj case)holding that "if document based on which credit is taken was issued even by practicing fraud, a holder in due course for valuable consideration unless shown to be a party to a fraud, cannot be proceeded against by invoking larger period of limitation".
Being aggrieved, the Appellant preferred an appeal before the Hon'ble High Court of Gujarat.
The Hon'ble High Court of Gujarat also relied upon the decision in the Prayagraj case and held Cenvat credit cannot be denied merely because original manufacturer of inputs is not traceable.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
Rule 37BA (credit for TDS) inserted w.e.f. 01.04.2009 is to be treated as being retrospective in nature
The assessee is a Chartered Accountant carrying on his profession under the partnership firm M/s. Tiwari & Co. for and from the year 1983. The partnership firm M/s. Tiwari & Co. got dissolved w.e.f. 30.12.2006 and assessee became proprietor of this firm. The assessee has included the income qua the TDS certificates issued in the name of M/s. Tiwari & Co. having PAN AACFT6997P, which stands for the partnership firm and also claimed the credit for TDS in the individual capacity. The AO completed the assessment whereby he included the entire income of the firm M/s. Tiwari & Co. but did not allow the credit for TDS at Rs.1,53,380/- for the reason that the TDS credit is not reflected in the PAN of Shri Parmanand Tiwari, the Chartered Accountant in his individual capacity. During the course of assessment proceedings, assessee submitted proper declaration giving the entire fact that the income of M/s. Tiwari & Co. has duly been included in the hands of its proprietor and is assessable in the hands of the assessee. M/s. Tiwari & Co. under whose PAN this TDS has been deducted, has not made any separate claim of the TDS and also not declared separate income on this account. After going through the facts in entirety, I find that this is only a technical breach and that also for the reason that these professional receipts received by the assessee are commitment of earlier years when the firm was in existence. These receipts are earned by the professional work of M/s. Tiwari & Co. as proprietary concern in individual capacity of Shri Parmanand Tiwari. Wrong submission of PAN by deductors does not debar for claiming of TDS deducted particularly when the income is included in the hands of the assessee. Now the legislature, to mitigate the rigours of law, has amended the provisions of section 37BA of the Act by the Amendment Rules, 2009 w.e.f. 01.04.2009.
From the above provisions of Rule 37BA of the Rules, wherein it has clearly been mentioned that credit for tax deducted at source and paid to the Central Government shall be given to the person provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of other person in the information relating to deduction of tax referred to in sub-rule (1) of Rule 37BA of the Rules. Further, sub-rule (3) of Rule 37BA of the Rules provides that for the purpose of giving credit in respect of tax deducted in term of provisions of Chapter XVII for the purpose of giving credit to a person other than those referred to in sub-section (1) and also the assessment year in which such credit may be given. In view of the above provision of section 37BA of the Rules and the provisions of section 199(1) of the Act, the credit for tax deduction could be given to the person from whose income tax has been deducted. The Rule as amended by the Amendment Rules, 2009 w.e.f. 01.04.2009 makes it abundantly clear that the credit will be given based on the information by deductor. The proviso to sub-rule (2) of Rule 37BA of the Rules mitigates the hardship faced by assessee for claiming credit of TDS whereby deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of other person in the information relating to deduction of tax as referred to in sub-rule (1) of Rule 37BA of the Rules. In such provisions of law, the assessee should have been allowed credit for TDS in the given set of facts and circumstances of the case. The only issue is that the amended provision is applicable w.e.f. 01.04.2009 and the relevant assessment year involved is 2008-09. Whether the amended Rule as amended by Amendment Rules, 2009 is a beneficial provision mitigating the hardship of the assessee and in turn the same can be declared as retrospective and will apply to all pending matters. Similar issue was dealt by Hon'ble Supreme Court in the case of Allied Motors Pvt. Ltd. Vs. CIT (1997) 224 ITR 677 (SC), wherein it has been held that "the provisions of the first proviso, which has newly been inserted by the Finance Act, 1987, with effect from 1st April, 1998, to section 43B is remedial in nature, designed to eliminate unintended consequences which may cause undue hardship to the assessee and which made the provision unworkable or unjust in a specific situation, and is of clarificatory nature and, therefore, has to be treated as retrospective with effect from 1st April, 1984, the date on which section 43B has newly been inserted by the Finance Act, 1983." Similarly, here also the Rule was inserted by the Amendment Rules, 2009 to remove the hardship faced by assessees and to give true meaning to the provision of section 199 of the Act. In such circumstances, I direct the AO to allow the credit of TDS after verifying declaration to be filed by deductee in term of proviso to sub-rule (2) of Rule 37BA of the Rules. In term of the above, the appeal of assessee is allowed.
In the case in hand, from the facts, it was clearly established that the assessee had put a wrongful claim of depreciation and thereby had furnished inaccurate particulars of income for the purpose of concealment of real income, hence, the penalty proceedings were correctly initiated by the AO.
Sham Transactions with object to reduce tax liability liable for Penalty
We have considered the rival submissions. A perusal of the record reveals that during the search/survey operation on M/s. Western Pacques India Ltd., which was one of the major lessees having the transaction of lease with the assessee, it was found that the alleged leased assets were neither installed nor put to use by the lessee and were in fact non existent. Even, the most of the assets stated in the lease agreement were not eligible for 100% depreciation. It was also found that there were huge over invoicing of the said assets. Even lot of old and discarded junk assets had been introduced in the lease transactions in the garb of sale and lease agreement.
The AO in the assessment order has discussed in detail the lease transactions, one by one, entered by the assessee with various lessees. A categorical finding has been given by the AO that the transactions in question were in reality loan transactions which were given the colour of lease transactions, only to avail the tax benefit of depreciation under the Income Tax Act. Even it was also agreed by the assessee with the lessees that a part of such benefit would be passed on to the borrower in the form of interest on the loan amount taken, which was agreed to be recalled in case the assessee company would not get the expected tax benefits from the Income Tax Authorities. The AO has observed that it was a case of trading in tax benefits. Even the AO in the assessment order has categorically observed that it was not only the case of transfer of tax benefits from the borrower to the assessee company, rather was a case of claim of identical benefits by the assessee company when the borrower was also in fact claiming such benefits. The borrower in this case was also claiming deduction of depreciation on the cost of new asset (though capital component of the lease rental) over the lease period at the rate of depreciation of asset at the rate of 25% whereas the lessee was availing the claim of depreciation on an accelerated rate in most of the cases. The AO had called upon the necessary explanations from the assessee on the subject matter and after duly considering the reply/explanations given by the assessee, he concluded that most of the transactions were bogus and the other were sham transactions. Explanations were not only called from the assessee but from the lessees also.
Even the assessee itself, in the statement of facts submitted before the ld. CIT(A), has mentioned that in some cases the party (lessee) had taken the assessee for a ride by cheating the assessee with regard to the purchase of assets. The assessee had come to know about this fact only from the assessment order. This explanation given by the assessee itself proves that the assessee neither purchased/owned the alleged leased assets nor was aware as to whether the said assets were ever purchased by the alleged lessees. Had the assessee leased the assets in question, the assessee firstly would have purchased those assets either from the manufacturer in case of simple lease transactions and/or from the lessee itself in case of "sale and lease back transaction". When the assessee itself was not aware about the existence of assets, it was obvious that such a transaction could not fall in the definition of lease transactions. Thorough investigations were carried out by the AO including explanations called from the respective parties and even the suppliers of the equipments and in most of the cases it was found that either the alleged assets did not exist or the assets were different from that mentioned in the assessment order or the junk assets having no value were shown as the leased assets. The transactions in most of the cases were bogus in nature and in some cases bogus bills were generated. Even the department had traced the bank account of certain parties and the movement of cheques and drafts issued by the supplier and it was found that substantial amount of money deposited in these accounts of the suppliers of machinery had been immediately transferred in the accounts of lessee e.g. in the case of 'Prakash Industries Ltd.' In some of the cases, the so called lessee had already claimed depreciation on the assets on the old assets and the assessee again claimed depreciation at the rate of 100% on such assets in the garb of sale and lease back agreements.
After detailed investigations, AO had concluded that the transactions were bogus, sham and colourable devise to evade the tax. The transactions in question at the most could be said to be loan transactions and nothing more than that. We may further note that in appeal against the assessment order, the assessee agreed to the additions made by the AO and did not contest the findings of the AO regarding the transactions being bogus and sham in nature. The assessee, though, before us has taken a plea that there were factual discrepancies in the assessment order, but such a plea was neither taken by the assessee during the appellate proceedings against the assessment order nor in its appeal before the ITAT in the said quantum proceedings, even not during the penalty proceedings before the AO. Such a plea was taken for the first time before the ld. CIT(A) in penalty appeal only. The ld. counsel for the assessee has submitted before us that such a plea was taken before the ld. CIT(A) in quantum proceedings, but since the claim of the assessee regarding capital component was accepted, hence the assessee did not contest or agitate its point. However, we have gone through the grounds of appeal of the assessee put before the ld. CIT(A) during the appellate proceedings against the assessment order and found that no such a plea of factual discrepancies in the order of the AO was taken by the assessee. However, a perusal of the statement of facts put before the ld. CIT(A) in relation to said appeal reveals that the assessee had mentioned that the AO in the assessment order had mixed up the facts which would be explained at the time of hearing. The above statement of facts shows that the assessee had not agitated about the factual findings or about any major discrepancy going to be root of the case rather it was stated that the AO has mixed up certain facts. The findings arrived at by the AO after making the detailed and elaborated investigation, inquiries and due consideration of the matter were not in fact denied by the assessee. Even, the assessee in the said appellate proceedings agreed that the transactions were loan transactions and did not contest the issue. No such plea about any defect in the findings arrived at by the AO was agitated by the assessee during the penalty proceedings also. It was only for the first time that such a plea had been taken in appellate proceedings against the penalty order. Though the ld. counsel for the assessee has relied upon various case laws to stress the point that the penalty proceedings are different from the assessment proceedings and the assessee can lead further evidence to show that the penalty could not be attracted in its case, however, it is also a settled law that the evidences taken into consideration during the assessment proceedings, though not conclusive, but have good evidentiary value. By merely pointing some discrepancies in the order of the AO that too at a belated stage during the appellate proceedings against the penalty order, which even could not be verified by the AO due to lapse of sufficient time and non traceability of the concerned folder, itself, is not sufficient to prove that the findings arrived at by the AO that the transactions in question were sham, bogus and colourable devise were not correct. The detailed findings of the AO, the assessee not agitating the findings of the AO in quantum proceedings, no plea of factual discrepancies during quantum proceedings and appeals, even no such plea before AO during penalty proceedings and no rebuttal to the findings of the AO that the transactions were bogus and sham are sufficient facts to hole that the assessee had put a false claim of depreciation during the assessment proceedings. The plea of the assessee that he did not contest the addition to avoid litigation or to buy peace etc. even does not seem plausible. The assessee during the year had claimed depreciation of huge amount of Rs.5,17,09,213/- which was not fund genuine by the AO. The Hon'ble Supreme Court, in the case of "MAK Data P. Ltd. vs. Commissioner of Income Tax-II" civil appeal No.9772 of 2013 date of decision 30.10.13, has categorically held that it is the statutory duty of the assessee to record all its transactions correctly and to clear its true income in the return of income. The AO should not be carried away by the plea of the assessee like "voluntary disclosure", "buy peace", "avoid litigation", "amicable settlement", etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to Section 27 1(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the explanation, has been discharged by him, the onus shifts on the Revenue to show that the amount in question constituted the income and not otherwise. In the case in hand, the assessee has failed to discharge its burden that it has not put a false claim of depreciation and the plea that the finding was not agitated to buy peace or to avoid litigation also does not seem to be justified. The other plea taken by the assessee is that in fact there was no tax effect when the income shown by the assessee in subsequent years is taken into consideration. The assessee on this aspect of the matter has relied upon a chart at page 322 of the paper book. We may find that such a plea of the assessee is also not convincing. The assessee in the assessment year in question has claimed a huge claim of depreciation. Merely because in the subsequent years, the net tax effect would be 'zero' or otherwise, does not lessen the burden of the assessee to state true and correct particulars of the income for the year under consideration. In the year under consideration, the assessee had made a false claim of depreciation, is the relevant fact, which we note from the record that the same was correctly noted by the AO.
So far, the contention of the ld. counsel for the assessee that whether a transaction is a lease transaction or a finance transaction is a debatable legal issue, we are not inclined to accept this argument also. Whether a transaction is a lease transaction or a loan transaction, in our view, is a factual issue which is to be decided after appreciation of the relevant facts. If the facts show that the assessee has put a wrong claim of depreciation by showing a finance or loan transaction as a lease transaction, certainly the claim is to be disallowed. However, in cases, where from the facts and evidences on the file it can be shown that the transaction was real or genuine, the relief of claim of depreciation is to be allowed. In the case in hand, from the facts, it was clearly established that the assessee had put a wrongful claim of depreciation and thereby had furnished inaccurate particulars of income for the purpose of concealment of real income, hence, the penalty proceedings were correctly initiated by the AO. It was not a case of tax planning by the assessee so as to avoid or reduce its taxes by remaining within the framework of the law. The transactions entered into by the assessee were sham and bogus transactions which were intended to defeat the provisions of law. It may be observed that tax avoidance by way of tax planning or structuring the transactions so as to reap the largest tax benefit may be permissible under law but fraudulent transfer of assets or income or engaging in sham transactions with the object of reducing the tax liability cannot be said to be a case of tax avoidance but of tax evasion. Any act or attempt to reduce the tax liability by deceit, subterfuge or concealment is not permissible under law.
In our view, it was a clear cut case of furnishing of inaccurate particulars of income and as such the penalty has been correctly levied by the lower authorities in this case. So far the reliance of the ld. counsel for the assessee on catena of judgments such as "CIT vs. Development Credit Bank Ltd." ITA No.5409/M/10 dated 06.09.11 and other decisions as mentioned in the paper book, it can be observed that in all such decisions a categorical finding has been given that the assessee had given a bonafide explanation which was accepted by the concerned judicial authorities. However, in the case in hand, we find neither the assessee offered any explanation nor the assessee could show us that the claim of the assessee regarding the depreciation was bonafide. The various case laws relied upon by the assessee are quite distinguishable when compared to the facts of the case in hand and for the sake of brevity, we do not find it necessary to discuss the facts of each and every case relied upon by the assessee.
In view of our above observations, we do not find any merit in the appeal of the assessee and the same is accordingly hereby dismissed.
Times Guaranty Ltd vs. ACIT (ITAT Mumbai), ITA No.1681/M/2007,Date of Pronouncement : 10.10.2014
Imparting computer education in schools along with providing computers/ accessories is a Works contract and liable to Sales tax
Activity of imparting computer education in schools along with providing computers/ accessories is a Works contract and computers/ accessories so installed are liable to Sales tax
NIIT Limited Vs. Deputy Commissioner (CT), Abids Division, Hyderabad and others [2014 (10) TMI 765 - Andhra Pradesh High Court]
NIIT Limited (the Petitioner) executed a contract dated June 29, 2002 (the Contract) with the Government of Andhra Pradesh for imparting computer education in High Schools in the State of Andhra Pradesh, including leasing of computer hardware, software and connected accessories on Build Own Operate Transfer (BOOT) basis.
The Department contended that the work executed by the Petitioner under the Contract is a 'Works contract' and therefore the turnover of property involved in the execution of the said Works contract is liable to be taxed at 8% under Section 5F of the A.P. General Sales Act, 1957 ("A.P. Sales Act"). Accordingly, proceedings were initiated against the Petitioner.
Being aggrieved, the Petitioner filed a writ petition before the Hon'ble High Court of Andhra Pradesh on the basis of following submissions:
- The Contract is a simple contract for imparting computer education in the schools and it does not involve the element of 'sale' as defined in Section 2(1)(n) of the A.P. Sales Act;
- Though the Petitioner had provided computers and software for teaching purpose, it is purely incidental to rendering of computer education and involves no sale of goods and there is no sale consideration;
- The contract is purely a service contract;
- Even assuming that the said transfer would amount to sale, the same would come into operation only at the end of the Contract and for the purpose of the Assessment Years 2002-03 to 2004-05, the Petitioner continues to be the owner of all those assets.
The Hon'ble High Court of Andhra Pradesh after detailed discussion on the provisions of the A.P. Sales Act and Article 366(29A)(b) of the Constitution of India held the following:
- On a careful analysis of the recitals and terms and conditions of the Contract, there cannot be any doubt that it involves certain goods in execution of the Contract and that the same would be transferred to the schools in which the equipment is installed for imparting the computer education;
- The mere fact that the ownership of the computers and the accessories passed on to the schools at the end of the Contract does not alter the nature of the Contract. Passing of ownership at a later point of time is permissible as held in Larsen and Toubro Limited's case [2013 (9) TMI 853 - SUPREME COURT] ("L&T case");
- On a combined reading of the terms and conditions of the Contact with reference to the object sought to be achieved, it is observed that the Contract involves both a contract of Service and a contract of Sale of Goods. It is a composite contract and by legal fiction provided under Article 366(29A)(b) of the Constitution, it is permissible to separate the transfer of property in goods (as goods or in some other form) from the contract of service;
- As held in L&T case, the traditional decisions which hold that the substance of the contract must be seen, have lost their significance and what was viewed traditionally has to be now understood in the light of the philosophy of Article 366(29A) of the Constitution of India;
- It is also explained in L&T case that the term 'Works contract' cannot be confined to a particular form and it encompasses a wide range of many varieties of contract. It is also laid down in the said decision that for sustaining the levy of tax on the goods deemed to have been sold in execution of a works contract three conditions must be fulfilled namely:
- there must be a Works contract,
- the goods should have been involved in the execution of a Works contract;and
- the property in those goods must be transferred to a third party either as goods or in some other form. In the instant case, all the said three conditions are satisfied.
- Hence, the Contract is a Works contract and consequently levy of Sales tax under Section 5F of the A.P. Sales Act on transfer of property in goods/equipment installed in theschools for the purpose of imparting computer education is permissible under law.
Our Comments:The five Judges Constitution Bench of the Hon'ble Supreme Court in the case of Kone Elevator India Private Limited Vs. State of Andhra Pradesh [2014-TIOL-57-SC-CT-CB], while explaining the distinction between 'Contract for sale of goods' and 'Works contract', overruled the judgment of three Judge Bench and changed the classification of contracts for supply, erection, installation and commissioning of elevators from 'Contract of sale of goods' to 'Works contract'.
It is held by the five Judges Constitution Bench of the Hon'ble Supreme Court of India that four concepts have emerged from various SC judgments, which are:
- The Works contract is an indivisible contract but, by legal fiction, is divided into two parts, one for sale of goods, and the other for supply of labour and services;
- The concept of 'Dominant nature test' or for that matter, the 'Degree of intention test' or 'Overwhelming component test' for treating a contract as a Works contract is not applicable;
- The term 'Works contract' as used in Clause (29A) of Article 366 of the Constitution takes in its sweep all genre of Works contract and is not to be narrowly construed to cover one species of contract to provide for labour and service alone; and
- Once the characteristics of Works contract are met within a contract entered into between the parties, any additional obligation incorporated in the contract would not change the nature of the contract.
'Dominant nature test' or 'overwhelming component test' or 'the degrees of labour and service test' are really not applicable.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
Doctrine of unjust enrichment would apply to the pre-deposit amount but same can be substantiated by support of CA certificate that incidence of duty has not been passed on
Doctrine of unjust enrichment would apply to the pre-deposit amount but same can be substantiated by support of CA certificate that incidence of duty has not been passed on
Siddhi Vinayak Steel Vs. Commissioner of Customs, Mumbai [2014 (10) TMI 689 - CESTAT MUMBAI]
Certain goods belonging to Siddhi Vinayak Steel (the Appellant) and lying at Shreenath Warehouse were seized when the SIIB found that certain goods were illegally imported through Chennai port under DEEC license for local market in Mumbai. The Appellant challenged the seizure of the goods by filing a writ petition before the Hon'ble High Court of Bombay. The Hon'ble High Court directed the Appellant to pre-deposit Rs 12 Lakhs and further directed the Department to issue a Show Cause Notice. Accordingly Show Cause Notice was issued and the Commissioner (Import) while adjudicating the case, ordered confiscation of the goods under Section 111(d) of the Customs Act, 1962 (the Customs Act), imposed redemption fine of Rs. 2,15,000/-,duty of Rs. 13,17,733/- along with penalty of Rs. 1 lakh.
The Appellant aggrieved by the order of the Commissioner (Import) filed an appeal before the Hon'ble CESTAT, Mumbai on ground of jurisdiction, which was allowed. Thereafter, the Department challenged the same, before the Hon'ble High Court of Bombay where also contentions of the Department were rejected.
Subsequently, the Appellant filed refund claim of pre-deposit amount, which was sanctioned by the lower Adjudicating Authority, but credited the same to Consumer Welfare Fund in terms of Section 27(2) of the Customs Act on the ground that the Appellant had failed to discharge the onus that incidence of duty has not been passed on.
Being aggrieved, the Appellant preferred an appeal before the Commissioner (Appeals) who upheld the order of lower Adjudicating Authority. Thereafter, the Appellant preferred an Appeal before the Hon'ble CESTAT, Mumbai.
The Hon'ble CESTAT, Mumbai relying upon the decisions made in case of UOI Vs. Jain Spinners Ltd [1992 (61) E.L.T. 321 (S.C.)]and Pride Foramer Vs. CC [2006 (200) E.L.T. 259 = 2008 (12) S.T.R. 657.] held that doctrine of unjust enrichment would be applicable in the case of pre-deposited amount. It was further held that since, in the instant case the amount of pre-deposit was shown as receivable in the balance sheet of the Appellant and the same has been substantiated by Chartered Accountant certificate dated November 24, 2006 which has not been challenged by the Department, unjust enrichment could not be alleged.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
Service tax in respect of same transaction cannot be demanded again for payment under different category
Service tax in respect of same transaction cannot be demanded again on ground that deposit of Service tax was under different category whereas different category of service has been provided
Coca Cola India Pvt. Ltd. Vs. Commissioner Of Service Tax, Delhi III [2014-TIOL-2198-CESTAT-DEL]
Coca Cola India Pvt. Ltd.(the Appellant) entered into an Agreement with KPH Dream Cricket Pvt. Ltd. (KPH) for sponsoring the cricket team Kings XI Punjab. On the said contractual consideration, a Service tax of Rs. 37,08,000/- was collected by KPH from the Appellant, which was deposited with the Central Government under the category of Business Auxiliary Service (BAS).
Later on, the Revenue entertained a view that the Agreement between the Appellant and KPH was falling under the category of 'Sponsorship Service' and, as such, the tax liability falls on the Appellant under reverse charge mechanism.
Notwithstanding that Service tax already stood paid by KPH, proceedings were initiated against the Appellant for recovery of the said tax amount of Rs.37,08,000/- which was further affirmed by the Adjudicating Authority, confirming the demand with interest and penalty.
Being aggrieved, the Appellant preferred an appeal before the Hon'ble Commissioner (Appeals). The Hon'ble Commissioner (Appeals) also found the decision of the Adjudicating Authority proper &legal and accordingly dismissed the appeal filed by the Appellant.It was held by the Commissioner (Appeals) that such liability would fall upon the Appellant and sponsoring of a cricket teamis not outside the scope of sponsorship service.Thereafter, the Appellant filed an appeal before the Hon'ble CESTAT, Delhi.
The Hon'ble CESTAT, Delhi relying upon the decision in the case of Hero Motocorp Limited Vs. CST, Delhi [2013-TIOL-873-CESTAT-DEL]held that the demand of Service tax in respect of the same transaction on which Service tax had already been deposited, on the ground that the deposit of Service tax was under a different category whereas a different category of service has been provided cannot be held to be justifiable.
Accordingly, the order of the Adjudicating Authority was set aside and the appeal was allowed with consequential relief.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
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