In my considered opinion, the appellant fell within the ambit of “outdoor caterer” as defined at all times inasmuch as he was admittedly catering food to Dr. Reddy’s Laboratories Ltd. at a place owned by the latter and it is not the case of the appellant that he was the owner of those premises. In this view of the matter, it is held that the appellant was liable to pay service tax prior to 16.6.2005 also. For the period from 16.6.2005, there is no room for doubt inasmuch as the amended definition is explicit. Accordingly it has to be held that the appellant was liable to pay service tax under the head “outdoor catering service” on the catering charges collected from Dr. Reddy’s Laboratories Ltd. for the entire period.
In the case of Oswal Petrochemicals Ltd. (supra), the Hon’ble Supreme Court has categorically held that the statute does not provide any remedy by way of review. There are other decisions of the Hon’ble Supreme Court to the effect that in the absence of specific statutory provision. Tribunal cannot exercise review powers and only rectification of mistake can be made when such mistake is apparent on the face of the record which must be an obvious mistake and not something which has to be established by a long drawn process of reasoning or where two opinions are possible.
If on the basis of an agreement between the State authority and the concessionaire for construction of roads, the contractor is authorised to collect the toll charges from the users of the roads for the services rendered and the entire activity is done on Build-Own/Operate-Transfer basis, there is no service tax liability. Construction of roads has been specifically excluded from the scope of service tax levy both under “Commercial and Industrial Construction Service” and “Works Contract Service”. Further repair and maintenance of roads have also been exempted from service tax retrospectively in this year’s budget. Thus the intention of the Government is to keep out road construction activity from the purview of service tax. If that be so, how can service tax be levied on the very same activity under Business Auxiliary Service (BAS)? Such a view does not appeal to any reason or logic.
The appellant being an IT related service provider, undisputedly, the recruitment of manpower was, obviously for rendering those services and what further details were required by the department are not forthcoming. Similarly, the ‘security agency services’ are used for securing their office premises. Therefore, there is no justification for interfering with the order of the Commissioner (Appeals) allowing refund of credit in respect of these services.
Appellant is a registered mandap keeper and was issued a show cause notice. There could be a situation where the appellant could be under a bona fide belief as to not to discharge the Service Tax liability on the advance amount received, during the material period, the issue of Service Tax liability under the Mandap Keeper services also was in litigation finally settled by Hon’ble Apex Court in the case of Tamilnadu Kalyana Mandapam Association v. Union of India[2004] 136 Taxman 596. I find that the appellant had discharged the Service Tax liability on being pointed out. As the appellant is not contesting the Service Tax liability and interest thereof, in my view, the lower authorities should not have issued the show cause notice as provisions of section 73(3) may apply in this case. Be that as it may, the judgment of the Tribunal in the case of Chintamani Mangal Karyalaya (P.) Ltd. (supra) in an identical issue, has held in favour of the appellant.
It was opined in those orders that insofar as supplies of material are concerned, such materials shall not be liable to service tax because Finance Act, 1994 is not a Commodity Taxation Law. Contract covering taxable service have been directed to be taxed.
Following the earlier order to reduce the litigation at the grass root level first appellate order is set aside and we send the matter back to ld. Appellate Authority to re-examine the issue without insisting on pre-deposits by him. In the result, both stay application and appeal are disposed remanding the appeals to the ld. Commissioner (Appeals) to decide the same in accordance with law.
In this appeal filed by the assessee, the challenge is against a demand raised on the appellant in terms of Rule 6(3) of the CENVAT Credit Rules 2004 for the period from July to December 2008. During the said period, the appellant (a unit in the domestic tariff area) had cleared their products to SEZ developers/units. During the same period they had also cleared their products to the DTA on payment of duty. The department treated the clearances to SEZ developers/units as clearance of exempted goods and, having found no maintenance of separate accounts in terms of rule 6(1) of the CCR 2004, chose to demand 10% of the sale price (taxes excluded) of the goods cleared to SEZ developers (units) during the above period.
From the impugned order, it does not come out clearly how the service tax liability has been computed. If the appellant has purchased from third parties and sold the same on payment of VAT and also supplied hardware on payment of VAT, the same would not be liable to service tax. The liability to service tax would arise only in respect of software which the appellant has developed as per customer’s specifications and supplied to their customers.
One important question survives for consideration and the same is whether the legal mistake committed by the Department can be corrected to ensure that the offender does not escape punishment under the Central Excise law. There is a clear distinction between a mistake of fact and a mistake of law. The former cannot be rectified at later stage but the latter is rectifiable subject, of course, to legal constraints. In the present case, the show-cause notice was issued to the appellant for the sole purpose of penalizing them for the offence alleged therein.
