2018 (8) TMI 1688 – CESTAT NEW DELHI – TMI – Liability of Service Tax – stitching/ tailoring charges under the category of Fashion Designing – Time Limitation – Circular No. F. No. B/1/2002/TRU of the Finance Act, 2002 dated 01/08/2002 – Held that:- In view of the clarification as above by the CBEC, it is evident that no Service Tax can be charged on stitching/ tailoring charges under the category of Fashion Designing. Consequently, no Service Tax is payable on the stitching charges. The cost of raw materials used by the appellant and recovered from their customers also cannot be included for payment of Service Tax. Under the category of “Fashion Designing”
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However, amounts recovered by the appellant towards the activity of designing such as design of Jodhpuri, blazer etc, which was carried out by the appellant at the request of the customers will squarely be covered within the category of fashion designing and Service Tax is liable to be paid for amounts recovered towards this
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evenue. The appeal was adjourned at the request of appellant repeatedly at least six times. Even today none is present on behalf of the appellant. Since the appeal cannot be kept pending endlessly, I have no option but to take up the issue for decision on merit, even in the absence of the representative of the appellant. 2. Heard Ld. DR for the Revenue. 3. The brief facts of the case are that the appellant is engaged in the stitching of cloths and occasionally carrying out embroidery or making of designs for suit etc, as per the requirements of the customers. They recovered amount by way of stitching charges, cost of raw material, charges for making art work and embroidery etc. The appellant paid Service Tax on the amounts collected by them under the category of Fashion Designing defined under Section 65 (43) of the Finance Act, 1994 which includes any activity relating to conceptualizing, outlining, creating the designs and preparing patterns for customers, apparels, garments, clothin
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Tax, has been decided by the Larger Bench in the case of Veer Overseas Ltd V/s Commissioner 2018-TIOL-1432-CESTAT-CHD-LB. The Larger Bench has taken the view that any refund of Service Tax will be covered within the time limits strictly specified by Section 11B and the same will also be applicable to any Service Tax which is paid in the mistaken notion that Service Tax was payable, even though there was no requirement to pay such tax. On merits also, Ld. DR justified the order and submitted that all the activities carried out by the appellant will be falling within the definition of Fashion Designing . 6. After hearing the Ld. DR and perusal of record, it is noticed that the Service Tax was paid by the appellant on the amounts recovered by them from their customers. The amounts recovered included the stitching charges, the cost of the materials used, and also amounts collected by them for certain designs undertaken by the appellant at the request of customers. The CBEC has clarified b
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out by the appellant at the request of the customers will squarely be covered within the category of fashion designing and Service Tax is liable to be paid for amounts recovered towards this. 8. The next I turn to the issue of limitation. The lower Authorities have given detailed findings that the Service Tax amounting to ₹ 1,63,305/- paid on 23/07/2014 and for which refund has been claimed on 06/08/2015, is hit by time limit under Section 11B. The submission of the appellant against such a finding is that the Service Tax has been paid by them on activities which do not attract Service Tax. They have submitted that since the Service Tax was paid due to mistake of understanding of the facts, the provisions of Section 11B will not be applicable. However, the issue has been settled by the Larger Bench of the Tribunal in the case of Veer Overseas Ltd V/s Commissioner (supra). The Larger Bench has held that the provisions of Section 11B will be applicable to any amount paid as Servic
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