The appellants are distributors of sim cards needed to enable telecommunication service provided by BSNL through mobile telephone. They also market recharge coupons which enables additional duration of time for which such service is allowed to the customers of BSNL. BSNL supplies these cards with fixed Maximum Retail Price (MRP) to the appellants.
As per the Business Associates Agreement entered into by the appellant with Syntel Inc., USA has agreed to provide marketing services in relation to software services developed by Syntel International Pvt. Ltd., India and Syntel Inc., USA has to identify customers in USA and make efforts to get the customers and assist Syntel (India) in respect of sales in USA by providing sales and technical information and other materials regarding Syntel services including sales promotion literature or brochures. It is for rendering these assistance, the consideration is paid. The consideration is paid in convertible foreign exchange and the appellant has discharged the service tax liability on reverse charge basis under section 66A of the Finance Act, 1994.
Tribunal in the case of Navratna S.G. Highway Property Pvt. Ltd.in Order No. A/47/WZB/ AHD/2012, dt. 17-1-2012, has considered the same issue and has come to the conclusion that the credit of Service Tax paid on the services used during construction of immovable property which is rented subsequently, is admissible for payment of Service Tax.
It is also undisputed that the demand of the service tax is raised on the commission received by them as a licensed agent from the said M/s. IFFCO-TOKIO General Insurance Company Ltd. I find that the defence put up by the respondent before the: lower authorities is correct inasmuch as the provisions of rule 2(1)(d)(ii) of the Service Tax Rules, 1994 clearly casts responsibility on the: insurance company to discharge the service tax liability on the commission paid by them to their licensed agent. In the current case, that defence is enough for the respondent herein to state that the amount received by them from M/s. IFFCO-TOKIO General Insurance Company Ltd. has already been taxed by the government in the hands of the insurance company. I find that the first appellate authority was correct in allowing the appeal filed by the respondent.
Brief facts of the case are that the adjudicating authority rejected the refund claim for the period prior to the Registration of service tax paid by the respondents on the ground that the assessee entitled to refund claim of input service credit only for the period after registration. The said order was challenged before the Commissioner (Appeals). The lower Appellate Authority relied on the decision of the Tribunal in the case of Textech International (P) Ltd v. CST [2011] 33 STT 233 and allowed the refund claim.
The first argument that classification of service cannot be changed in the hands of the recipient, by itself is good enough to allow this appeal. Further I note that there is no reference in the opening paragraph to the classification as indicated in column (2) of the Table in the Notification. This appears to be a serious lacuna. But such missing words cannot be supplied by anyone interpreting the provisions. Secondly the description in Column (3) of the Table is Services provided for export of said goods.
Prima facie, the institute was facilitating campus recruitment of its students by various companies from year to year and collecting charges/fees from such companies as a consideration for the same. Prima facie, this transaction squarely fell within the ambit of the definition of “Manpower Recruitment or Supply Agency’ as amended w.e.f. 1-5-2006. The circular relied on by the learned counsel is of no relevance inasmuch as the question discussed therein was whether an activity which would fall within the scope of the above definition w.e.f. 1-5-2006 could also be held taxable prior to that date. The decision cited by the learned counsel is also prima facie inapplicable inasmuch as that was a decision touching the scope of “Manpower Recruitment [or Supply] Agency Service” prior to 1-5-2006.
The benefit of Cenvat credit paid on outdoor catering services received by the appellants for providing food to their employees as also service tax paid on running a cab service for transportation of employees from home to factory and back to home stands denied on the ground that the said services cannot be held to be eligible cenvatable input services.
Letter issued by the Superintendent is not an appealable order issued by a competent authority. It is also recorded that since a show cause notice on the same issue has already been issued to the appellant herein, the outcome of such adjudication proceedings is an appealable order before higher judicial fora. Accordingly, I find that the first appellate authority was correct in rejecting the appeal filed by the assessee.
It is evident from the above account of the conduct of the two officials that they chose not to take proper steps at appropriate stage for filing the appeal even though they knew that it was their duty to do so. We have also noted that Mr. Prasad is totally remorseless in his affidavit. If the company loses this case it is because of his inaction. We nave already borne on record that we are not satisfied with the explanation offered in the COD application and the accompanying affidavits. Heavy delay of the appeal cannot be said to have been satisfactorily explained, particularly the delay from the first week of April 2012. The COD application is dismissed.
