2019 (8) TMI 1369 - AT - Service Tax

Appellate Tribunal Rules Mud & Stationery Sales Not Taxable

Shri Bhuvnesh Shukla, Proprietor Versus Commissioner of Central Excise And Service Tax, Lucknow

Shri Bhuvnesh Shukla, Proprietor Versus Commissioner of Central Excise And Service Tax, Lucknow - 2019 (27) G. S. T. L. 693 (Tri. All.) Issues:1. Whether the appellant provided taxable services based on the information from the Income Tax Authorities.2. Validity of the demand raised against the appellant for the sale and supply of mud.3. Confirmation of demand for stationery items supplied by the appellant to a school.4. Whether the demand is barred by limitation.Analysis:1. The appellant, engaged in providing services under 'Maintenance and Repair Services,' was registered with the Service Tax Department. Proceedings were initiated against them after receiving information from the Income Tax Authorities regarding certain amounts received during 2011-12 to 2014-15. The Original Adjudicating Authority dropped a portion of the demand but confirmed a part of it, which was upheld by the Commissioner (Appeals), leading to the present appeal.2. The demand against the appellant was primarily based on the sale and supply of mud to a company at a specified rate per cubic-meter. The Appellate Authority noted that the contract did not specify the quantity of mud, leading to the conclusion that the activity did not fall under taxable services as per Section 66 D of the Finance Act, 1994. However, the invoices issued by the appellant clearly indicated the sale and supply of mud, which was deemed not liable for taxation, thereby overturning the demand.3. Another part of the demand was related to stationery items supplied by the appellant to a school. The lower authorities questioned the nature of the transaction and the lack of evidence supporting the claim that the amount received was for the supply of stationery and textbooks. The appellate tribunal found no basis for upholding the demand, emphasizing that the revenue failed to provide evidence linking the amount received to taxable services, as the sale of stationery items does not constitute a taxable service.4. Lastly, the tribunal considered the issue of limitation regarding the demand raised for the period of 2011 to 2015. It was noted that the show cause notice was issued on 27.02.2017, indicating that the demand may be barred by limitation. Consequently, the tribunal set aside the impugned order, allowing the appeal and providing consequential relief to the appellant.