TaxTMI 
TaxTMI 
2017 (6) TMI 55
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....cal Consultancy Services" their clients as covered by Section 65(92) of the Finance Act, 1994. They were registered with the Department for payment of service tax. The dispute in the present appeal relates to the period July, 2005 to May, 2011. During this period, the appellants received security deposit/advance payment from their clients for providing taxable service in future. They have not discharged service tax on the said amounts, received in advance during the relevant time. Proceedings were initiated by way of three different show cause notices covering the above period, to demand and recover service tax not paid on the advances received by the appellants. The Original Authority adjudicated the case and confirmed service tax liabilit....
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....d the findings of the adjudicating authority. 4. The appellant did not contest that they were rendering taxable service and liable to pay service tax on such service. The dispute in the present case is the liability of the appellant to pay service tax on the considerations received from the recipient of service, in advance. The appellants contested the demand on the ground that the business modal adopted by the appellant, for more than three decades, is that they take security deposits from clients towards consideration, for providing service, which will enable them for easy settlement of payments. The business compulsion and the need for taking preparatory steps in terms of manpower and overhead costs are met by the appellant. Security de....
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....as deposit is ultimately adjusted against the taxable receipts, the case can be considered as only delayed payment of tax. We note that it is not in the choice of the appellant about timing of the payment of service tax. In terms of Section 67(3) when a consideration is received towards a taxable service, service tax on the same has to be paid. The appellants cannot take a plea that they will discharge service tax when they adjust the said advance amount as and when there is bill raised after provision of service. Such proposition will be against the legal provisions discussed above. Having said that we note that the claim of the appellant that there were excess payment or service tax demand on considerations, which did not relate to any se....
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....d on the assertion in the show cause notice dated 15.10.2010. We have perused the show cause notice. It mentions that during the scrutiny of ST-3 Returns, it was noticed that they have received payment in advance before providing taxable service. It was also recorded that the appellant paid service tax only at the time when the bills were raised to the clients after providing service. However, in para-4 of the show cause notice, it is mentioned that on further scrutiny of the records submitted by the appellant, it is noticed only part of the value of the amount received are being reflected in the ST-3 and the amount received as advance (security deposit) was not reflected in the said returns properly and completely. The authorized represent....