2015 (10) TMI 58

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.... the service tax demand to Rs. 5,86,994/- from Rs. 6,55,917/- confirmed by the primary adjudicating authority and also extended the benefit of reduced (25%) penalty under Section 78 of the Finance Act, 1994. 2. The appellant provided services as Direct Sales Agent/Associate (DSA) to M/s. LIC Housing Finance Ltd. (LICHFL). Proceedings were initiated for having provided Business Auxiliary Service (BAS) during 01.04.2006 to 31.01.2011, invoking extended limitation period, under proviso to Section 73 of the Act, on 17.10.2011. The appellant claimed that the appellant was of the view that it was not liable to service tax since LICHFL was remitting service tax on full value and therefore on the principles of revenue neutrality, there was no li....

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....ice that in each of the Interim Orders referred to above, there are observations regarding revenue neutrality being a relevant factor inferring on immunity to tax. Neither ld. consultant for the appellant nor ld. Departmental Representative placed before us any jurisprudential or normative basis for the proposition that the concept of revenue neutrality operates to eclipse a legislated liability to tax. The Revenue neutrality pleaded in the present case arises as follows. The appellant provided BAS to LICHFL. It is thus admittedly liable to remit service tax for having provided BAS. Since service tax is an indirect tax, the appellant is entitled to recover the component of the service tax suffered by it from the service recipient, LICHFL. L....

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....d have taken credit of the same. The whole schemata of taxation at the level of each taxable event would be rendered otiose and inoperative on application of the concept of revenue neutrality as a clog on the liability to service tax. We do not understand the concept of revenue neutrality as a fetter on Legislative competence to tax transactions at various stages and to inhere the burden of indirect taxes at different levels of occurrence of taxable events. Revenue neutrality may conceptually arise if the liability to tax and the entitlement to credit inheres in the same entity and in respect of identical taxable event. 7. On the above prima facie analyses, we find no warrant to apply this concept to legitimise an inference of immunity t....