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=767580 https://www.taxtmi.com/caselaws?id=767580 Recovery of service tax on account of differential value arising out of reconciliation of the Trial Balance and ST-3 Returns for the period 2010-11 and 2011-12 under proviso to Section 73(1) read with Section 73(2) of the Finance Act, 1994 - value shown in the invoices towards material cost are to be included for the payment of Service Tax or not - entitlement for exemption under Notification No. 12/2003 dated 01.07.2003 for the materials used in providing Repair and Maintenance Service for sea containers - Extended period of limitation. Value shown in the invoices towards material cost are to be included for the payment of Service Tax or not - HELD THAT:- This Tribunal had, after appreciation of the facts therein, which are similar to the facts of the present appeal, allowed the appeal in the appellants favour, in the case of M/S. BAY CONTAINER TERMINAL PVT. LTD. VERSUS CCE, ST, CHENNAI [ 2018 (4) TMI 1035 - CESTAT CHENNAI] where it was held that Hon ble Supreme Court in Jain Brothers [2012 (7) TMI 935 - SUPREME COURT], state that the cost of goods supplied during repair cannot be added to the value of the taxable service in view of the said exemption . Subsequently also, the appellants had preferred Service Tax Appeal No.40992/2013 being aggrieved by OIO No.02/ST/COMMR/2013 dated 15.03.2013 passed by the Commissioner of Central Excise, Tirunelveli confirming the demand of service tax made on the allegation of non-addition of the cost incurred by the appellant for replacement/repairs undertaken by them of damaged parts of the containers used in international transportation, in the taxable value - This appeal too was decided in the appellants favour by placing reliance upon M/S. BAY CONTAINER TERMINAL PVT. LTD., VERSUS THE COMMISSIONER OF G.S.T. CENTRAL EXCISE [ 2019 (3) TMI 2081 - CESTAT CHENNAI] . Service tax demand on the basis of reconciliation of the Trial Balance and ST-3 returns - HELD THAT:- The Adjudicating Authority has not furnished any reason for non-acceptance of the appellant s reconciliation statement as well as the certificate of the Chartered Accountant that the appellant has relied upon and adduced as evidence for discharge of its tax liabilities with respect to the bills issued from Mumbai office apart from stating that the appellant has not produced evidence to substantiate their claim. The Adjudicating Authority has not recorded any categorical finding as to what exactly are the documents which he desired to see for his satisfaction - the non acceptance of CA certificate and reconciliation statement incorrect, when the demand was only premised on difference noticed during audit upon comparison of their trial balance with the ST-3 returns and that too on material cost, which in any event ought to be excluded in terms of the notification benefit claimed by the appellant - the non-acceptance of the CA Certificate without stating any reason for rejection or controverting it in any manner, is incorrect and untenable and the benefit thereof ought to be extended to the appellants. Extended period of limitation - HELD THAT:- The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility. In such circumstances, the Department could not have invoked the extended period of limitation and the Appellants succeed in their appeal on this count also. Entitlement to the benefit of the notification 12/2003 ibid - HELD THAT:- The appellant was entitled to the exemption under Notification No. 12/2003, as the invoices provided sufficient documentary proof of the materials used in the repair services. Conclusion - i) The appellant was entitled to the exemption under Notification No. 12/2003, as the invoices provided sufficient documentary proof of the materials used in the repair services. ii) The demand for service tax based on reconciliation discrepancies was unjustified, as the appellant had provided sufficient evidence of tax payment at the Mumbai branch. iii) The extended period of limitation was not applicable, as there was no evidence of wilful suppression or misstatement by the appellant. The penalties imposed under Section 78 of the Finance Act, 1994 were also found to be unjustified. Appeal allowed. Case-Laws Service Tax Wed, 12 Mar 2025 00:00:00 +0530