https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=766947 https://www.taxtmi.com/caselaws?id=766947 Short payment of Service Tax - technical inspection and certification service - Written off the advances received for the period prior to 31.03.2003 - demand for Service Tax on services rendered by the appellant s Japan branch to an Indian client - Non-inclusion of electricity charges collected from the tenants - maintenance charges collected from tenants - calculation of Service Tax liability under renting of immovable property service - Extended period of limitation. Demand of Service Tax of Rs.34,07,106/- confirmed under the category of technical inspection and certification service - HELD THAT:- The appellant has made excess payment during the years 2007-08 and 2011-12 and short payment during the years 2008-09, 2009-10 and 2010-11. However, it is noted that the Department has only taken into account the short payment made and ignored the excess payment done by the appellant. If the excess payment is taken into consideration, the actual short payment would be Rs.18,54,859/-, as per the work-sheet submitted by the appellant. Written off the advances received for the period prior to 31.03.2003 - HELD THAT:- In the present case, since the appellant has written off an amount of Rs.1,75,55,398/- on which the Service Tax liability works out to Rs.18,08,206/- This written off amount cannot be considered as income of the appellant in the year of write off and service tax cannot be demanded on this amount. Thus, the matter is remanded for recalculating the demand on this count. Whether the demand for Service Tax on services rendered by the appellant s Japan branch to an Indian client is sustainable? - HELD THAT:- The amount has been wrongly mentioned towards the services exported by the appellant s Kolkata branch. The service has been actually rendered by the Japan branch of the appellant to the Indian company, namely, M/s. MMTC Ltd. In such circumstances, Service Tax, if at all payable, shall be payable under reverse charge mechanism by M/s. MMTC Ltd. Therefore, the demand of service tax on this count from the appellant is not sustainable. Non-inclusion of electricity charges collected from the tenants - HELD THAT:- The appellant has been collecting the electricity charges as a pure agent . Thus, these expenses amount to reimbursement of electricity charges, paid by the appellant to the electricity company. Accordingly, there is no liability to pay Service Tax by the appellant on such electricity charges. Thus, the demand of Service Tax of Rs.8,17,482/- confirmed on this count is set aside as being unsustainable. Demand of Service Tax of Rs.1,28,962/- on maintenance charges collected from tenants - HELD THAT:- The appellant have accepted this liability and already paid the tax. Thus, the amount paid by the appellant is to be appropriated against this liability. Whether the calculation of Service Tax liability under renting of immovable property service was accurate and if the appellant s recalculated liability should be accepted? - HELD THAT:- In this regard, the appellant has submitted a CA certificate which needs to be considered and the liability of service tax on this count needs to be re-worked on the basis of the CA certificate. As the appellant has questioned the calculation of Service Tax liability, the issue needs to be remanded back to the adjudicating authority, for verification of correctness of the claim made by the appellant. Extended period of limitation - HELD THAT:- The appellant has been filing returns regularly and they have not suppressed any information from the Department. Thus, suppression of facts with the intention to evade the payment of tax has not been established in this case. Consequently, the demand confirmed by invoking the extended period of limitation is not sustainable. Conclusion - i) Regarding the demand of Rs.34,07,106/- confirmed in respect of technical inspection and certification service , the issue is remanded to the adjudicating authority for the purpose of re-computing the demand. ii) The written off amount cannot be considered as income of the appellant in the year of write off and service tax cannot be demanded on this amount. iii) Service Tax, if at all payable, shall be payable under reverse charge mechanism by M/s. MMTC Ltd. iv) There is no liability to pay Service Tax by the appellant on such electricity charges. Thus, the demand of Service Tax of Rs.8,17,482/- confirmed on this count is set aside as being unsustainable. v) The appellant have accepted this liability and already paid the tax. Thus, the amount paid by the appellant is to be appropriated against this liability. vi) The appellant has submitted a CA certificate which needs to be considered and the liability of service tax on this count needs to be re-worked on the basis of the CA certificate. As the appellant has questioned the calculation of Service Tax liability, the issue needs to be remanded back to the adjudicating authority, for verification of correctness of the claim made by the appellant. v) Suppression of facts with the intention to evade the payment of tax has not been established in this case. Consequently, the demand confirmed by invoking the extended period of limitation is not sustainable. The appeal filed by the appellant is disposed by way of remand. Case-Laws Service Tax Wed, 05 Mar 2025 00:00:00 +0530