2018 (1) TMI 1477 - AT - Service Tax

Tribunal upholds taxable value decision for technical services, rejects extended limitation period

SUPER QUALITY SERVICES Versus COMMISSIONER OF CENTRAL EXCISE, TRICHY

SUPER QUALITY SERVICES Versus COMMISSIONER OF CENTRAL EXCISE, TRICHY - 2019 (22) G. S. T. L. 49 (Tri. - Chennai) Issues: Valuation of technical inspection and certification services, applicability of Notification No. 12/2003-S.T., inclusion of X-ray films and charges in taxable value, reimbursement of expenses, limitation period for tax liability, cum-tax benefit under Section 67 (2) of the Finance Act, 1994, waiver of penalty.In this case, the appellant, engaged in 'Technical Inspection and Certification Service', challenged the order of the Commissioner (Appeals) regarding the valuation of services provided. The dispute centered around whether the value of X-ray films and certain charges should be included in the taxable value. The appellant argued that X-ray films sold to clients were exempted under Notification No. 12/2003-S.T. and that expenses for staff stay and transportation were reimbursable and should not be taxed. The appellant also raised concerns about the limitation period for tax liability and requested cum-tax benefit under Section 67 (2) of the Finance Act, 1994, along with a waiver of penalty.Upon review, the Tribunal found that there was no evidence of the sale of X-ray films to clients, and therefore, the exemption under Notification No. 12/2003 could not be applied. The Tribunal also noted that the invoices only showed unit charges without evidence of prearranged reimbursable expenses for staff travel and stay. Consequently, the Tribunal upheld the lower authorities' decision to include these charges in the taxable value.Regarding the limitation period, the Tribunal observed that there were two show cause notices invoking an extended period. However, it was held that the second notice could not invoke the extended period as the tax liability and valuation issues should have been comprehensively examined during the first notice. As there was no deliberate suppression of material facts, the penalty was deemed unsustainable.Ultimately, the Tribunal restricted the tax liability to the normal period without imposing a penalty, as the issue of valuation was based on the documents and invoices maintained by the appellant. The appeal was disposed of accordingly, with the tax liability confirmed against the appellant limited to the normal period.