Service Tax

[Guest]

1. Is it a fact that the manufacture of goods is entitled for the credit of amount equivalent to the amount of service tax paid by him on total amount of payment to the individual labour contractor appointed by him for selling his duty paid goods.

2. Whether such Govt. is manufacture ring units of goods or its labour contractors shall have some objective/idea/reason to evade the amount of service tax specially in the event when the audit team of the department also had identified the total payment to labour contractor from its books during the annual audit of the unit on 4-9-2007 or in the year 2008.

3. Whether non issue of notice within a period of 18 months from the date of audit shall debar the department to issue show cause notice and shall amount the same as time bar.

4. Whether there are some judgments by Tribunal/honorable High Court/Supreme Court of India on the above issues.

[Manoj Agarwal]

There are various judgments in favor of assessee, depending of facts of the case. The facts of your case are not clear, but yes the issue of notice after 18 months from the date of audit is time bar. For further clarifications, if any, kindly email me at servicetaxexpert@yahoo.com

[YAGAY andSUN]

But in case of fraud, collusion SCN can be issued within five years.

[Guest]

Indian Oil Corporation is a Govt. company and is manufacturer of Petroleum fuels and the Excise duty is paid by it on manufacturing. The company had appointed us the contractor for maintaining the petrol pump and selling its fuels. No where it was mentioned in the contract that the amount of service tax would be paid the amount of paid by the contractor on the payments made by IOCL. The audit team of Central Excise had pointed out this amount of payment in its report in the year 2007, 2008 and 2009. No show cause for payment of service tax was issued by the department till the end on 15.04.2008. The contract came to an end on 15.04.2008. The department had sought information in the year 2007, 2008 etc from IOCL but had again sought information vide its letter dated 16.02.2011. The IOCL had resubmitted the information vide its letter SD 49 dated 28.02.2011 and the department had issued the show cause notice in the month of October 2011. My query is ……

1. Whether the show cause notice is time barred?
2. Whether the department should have issue the show cause notice for service tax to IOCL also?
3. Whether the department should have gathered the full details of types of payments made by IOCL to the contractor and the reasons for payments i.e. whether as an pure agent or as contractor for services.
4. Whether the judgment of Tribunal on same issues is applicable on the adjucating authorities?
5. Whether the expenses made by me in maintaining the petrol pump and making sales are deductible out of the total payments made by IOCL?
6. In case some judgments have been passed by Tribunal or High Courts, the copies of the same are required we are ready to deposit fees.

AI Summary

Statutory time bar on service tax notices may preclude late show-cause issuance absent allegations of fraud or collusion. Whether payments by a principal to an independent contractor permit service tax credit and whether delayed departmental show-cause notices are barred by a time bar absent allegations of fraud; factual determination of payment character (service remuneration versus pure agent reimbursement), need for full particulars from the principal, deductibility of contractor expenses against receipts, and applicability of tribunal and high-court precedents to adjudicating authorities.