2014 (8) TMI 824

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.... 'Storage and Warehousing Service'. During the course of audit of their records for the period from October 2009 to September 2011, it was noticed that on a reconciliation of balance sheet and ST3 returns, according to the Revenue, the appellant had short-paid service tax. The audit also took a view that the appellants had not paid service tax on 'Management Consultancy Service'. 2. Proceedings were initiated resulting in confirmation of demand for service tax of Rs. 12, 65, 52,066/- with interest. 3. An amount Rs. 12, 44, 71,002/- is the demand for service tax arising because of difference between balance sheet and the ST3 returns. The learned consultant on behalf of the appellants submitted that in this case, the balance sheet was p....

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....olved is demand for Rs. 20, 81,063/- on the ground that appellant had provided 'Management Consultancy Service'. The learned consultant on behalf of the appellant submits that this demand has been made on the basis of auditors note in the annual report which reads as:             The company has been awarded the contract of operating Aviation Fuel Facility (AFF) and Into Plane (ITP) fuelling services at Delhi International Airport and has incurred Rs. 2,02,04,503/- towards manpower consultancy and other charges, etc., This is shown under advances recoverable in cash or in kind as the same will be recovered from the new subsidiary when formed. The learned consultant submits that th....

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....uestion of book adjustment would not arise. Even for subsequent years also there is no evidence to show that appellant did recover this amount. Moreover the notes reproduced by us hereinabove, would show that what was proposed in 'Note 5' was also a proposal to recover expenses and not to recover consideration for services provided. Even assuming that such recoverable cost proposed to be recovered from the subsidiary are for the services rendered, if such amount is not realized and recovered and no book adjustment is carried out, liability for service tax would not arise. Other than a 'Note' showing proposal to recover the cost from the subsidiary, there is no corresponding evidence either documentary or otherwise to show that there was eit....