2011 (9) TMI 772

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....eon as a recipient of service. The nature of these contracts can be categorised as under : *        Where all Indian direct tax are to be borne by the service provider [Tax Deducted at Source (TDS) Situation 1]; and *        Where all Indian direct tax are to be borne by the service recipient i.e. the appellant (TDS Situation 2).           In the first category, the service provider raises an invoice for the total amount say Rs. 100/- (Gross amount charged). The appellant deducts TDS thereon say at 4 percent. The appellant pays the contractor Rs. 96/- (Rs. 100 less Rs. 4/- TDS), the income tax department Rs. 4/- as TDS and R....

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....on such expenses under the 'reverse charge' mechanism. (iii)   The appellant also engages M/s. Chandra CFS and Terminal Operators Pvt. Ltd. (Chandra CFS) as their clearing and forwarding agents for various services including transport of goods. Chandra CFS collects service tax from the appellants for the services. (iv)   A Show Cause Notice No. 85/2008 in C. No. IV/9/56/2008-STC- Adj. dated April 3, 2008 was issued by Joint Commissioner of Service Tax requesting the appellants to show cause as to why a sum of Rs. 14,74,789/- should not be demanded under proviso to Section 73(1) of Finance Act, 1994, in respect of the following :- *        Non inclusion of TDS amount in value of taxab....