Tribunal reduces service tax demand, allows deductions, remands for re-quantification

The Tribunal partially allowed the appeals against a service tax demand for the period 2003-04 to 2007-08, reducing the demand from Rs. 2.04 Crores to Rs. 36.07 lakhs. Various amounts were excluded from the service tax liability, and deductions for manpower supply and cleaning services were denied. The Tribunal remanded the matter for re-quantification of the demand, allowing deductions supported by an independent Chartered Accountant certificate. The Tribunal directed completion of denovo adjudication within three months from the order date.

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Issues:
- Service tax demand for the period 2003-04 to 2007-08
- Exclusion of certain amounts from service tax liability
- Deduction of amounts for manpower supply and cleaning services

Service Tax Demand:
The case involved appeals against Order-in-Original No.46/Commr./ST/Kol./2009-10 regarding service tax demand. The Department issued a show-cause notice proposing a demand of service tax for an amount of Rs. 2.04 Crores and Education Cess of Rs. 5.8 lakhs, along with interest and penalties under Sections 76 & 78. The Adjudicating Authority restricted the demand to Rs. 36.07 lakhs along with interest, dropping the balance amount of about Rs. 1.69 Crores. The Authority also imposed penalties under Sections 76 & 78 of the Finance Act, 1994.

Exclusion of Amounts:
The Adjudicating Authority excluded various amounts from the service tax liability, such as interbank transfers, refund of EMD/FDR encashment, cheque returns, and services not liable for service tax. The Authority found no infirmity in excluding these amounts from the gross value of taxable services, rejecting the appeal filed by the Revenue.

Deduction for Manpower Supply and Cleaning Services:
The appellant claimed deduction for amounts related to manpower supply and cleaning services prior to 16.06.2005. The Adjudicating Authority declined the deduction, stating that the total receipt was considered for security services. The Tribunal reviewed a certified Table submitted by the appellant's Chartered Accountant, detailing various services provided. However, the Tribunal found that the evidence did not substantiate the consideration received for manpower supply and cleaning services. As a result, the Tribunal set aside the impugned order and remanded the matter to the original Authority for re-quantifying the demand, allowing the appellant to claim deductions supported by an independent Chartered Accountant certificate.

In conclusion, the Tribunal directed the denovo adjudication to be completed within three months from the date of the order.

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