TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal allows appeal on limitation grounds due to lack of evidence on service tax evasion.</h1> <h3>M/s. Hitech Manpower Consultant Pvt. Ltd. Versus The Commissioner of G.S.T. & Central Excise</h3> M/s. Hitech Manpower Consultant Pvt. Ltd. Versus The Commissioner of G.S.T. & Central Excise - TMI Issues Involved:Non-payment of service tax on salaries/wages, Inclusion of reimbursable expenses in taxable value, Allegation of suppression of facts with intent to evade payment of service tax, Interpretation of Section 67 of the Finance Act, 1994, Issue of limitation in invoking extended period for Show Cause Notice.Analysis:Issue 1: Non-payment of service tax on salaries/wagesThe appellants were engaged in supplying manpower and had excluded salaries and wages from taxable value while discharging service tax. The Department contended that these amounts should be included in the taxable value as per Section 67 of the Finance Act, 1994. The Original Authority confirmed a demand for service tax, interest, and penalties. The appellants argued that the wages were reimbursable expenses not part of their income, citing the decision in Union of India Vs. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. The Tribunal noted that the appellants paid service tax on service charges but not on wages. However, the Tribunal found that the Department failed to prove willful suppression of facts to evade service tax, ruling in favor of the appellants.Issue 2: Inclusion of reimbursable expenses in taxable valueThe appellants contended that wages were reimbursable expenses not to be included in taxable value, supported by separate invoices for service charges and reimbursements. The Department argued that the gross amounts received, including wages, should be the basis for service tax. The Tribunal observed that the appellants accounted for wages as expenditure, not income, believing them to be reimbursable expenses. The Tribunal highlighted that the issue of reimbursable expenses was interpretational and had been under litigation, ultimately ruling in favor of the appellants due to lack of evidence of willful suppression.Issue 3: Allegation of suppression of facts with intent to evade payment of service taxThe Department alleged that the appellants willfully suppressed facts to evade service tax. However, the Tribunal found no evidence of intentional suppression, noting that the appellants accounted for wages properly and that the issue of including wages for service tax had been subject to litigation. The Tribunal concluded that the Department failed to establish willful suppression, leading to the appeal's success on the ground of limitation.Issue 4: Interpretation of Section 67 of the Finance Act, 1994The Tribunal analyzed the interpretation of Section 67 of the Finance Act, 1994, in the context of including reimbursable expenses in taxable value. Referring to legal precedents and the nature of the expenses, the Tribunal found that the issue was interpretational and had been clarified by the Hon'ble Apex Court. The Tribunal emphasized that the appellants' belief regarding the treatment of wages as reimbursable expenses was reasonable, ultimately deciding in their favor.Issue 5: Issue of limitation in invoking extended period for Show Cause NoticeThe Show Cause Notice was issued invoking the extended period due to the alleged non-payment of service tax on salaries/wages. The Tribunal examined the issue of limitation, considering the period from June 2005 to September 2008. It noted that the appellants had accounted for wages as expenses in good faith and had not willfully suppressed facts. The Tribunal ruled in favor of the appellants on the ground of limitation, setting aside the impugned order.In conclusion, the Tribunal allowed the appeal on the ground of limitation, emphasizing the lack of evidence supporting the Department's allegation of willful suppression. The judgment highlighted the interpretational nature of the issues regarding reimbursable expenses and the reasonable belief held by the appellants, ultimately leading to a ruling in their favor.
TaxTMI 
TaxTMI 
