TaxTMI 
TaxTMI 
2018 (2) TMI 835
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....ability of such activities the appellants have to pay an amount of Rs. 5,51,33,267/- in terms of Section 73 A of Finance Act, 1994 as the appellants collected this much amount representing Service Tax in terms of the agreement with IOC. On the second issue Service Tax liability of Rs. 61,13,867/- was confirmed under Works Contract Service. Various penalties were also imposed. There is also a third issue regarding liability of the appellant for an interest amount of Rs. 6,79,414/- for delayed payment of Service Tax on construction of residential complexes in Noida. 2. The Ld. Counsel appearing for the appellant contested all the three issues. He submitted on the following lines. a. The appellant entered into an agreement with IOC for expansion project of township of Panipat. The contract stipulated as a standard clause that "the contract value is inclusive of all taxes and duties, including Service Tax". The whole dispute is revolving on such terms used in the contract. Impugned order holds that such term will attract the provision of Section 73A (2) of the Act. The Ld. Counsel submitted that they have not collected any amount representing Service Tax in any manner from their clie....
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...., the interest question for delay will not arise. 3. The Ld. AR strongly contested the submission of the appellant. He submitted mainly on the following lines. a. The provision of Section 72 A (2) readwith Section 73 A (6) makes it very clear that when the contractual terms indicate the consideration to the inclusive of Service Tax the amount collected in pursuance of such contract shall necessarily be considered as with Service Tax. b. The Original Authority arrived at the conclusion based on the terms of the contract and it is for the appellant to establish categorically that they did not represent and collect any amount towards Service Tax in order to avoid the liability under Section 73 A. c. Commenting on the case laws relied upon by the appellant he submitted that the present contract did not specify that "Service Tax, if any". In other words, taxes payable including Service Tax is stipulated in the contract giving a clear indication that Service Tax amount is very much part and parcel of the consideration collected by the appellant from the client. 4. We have heard both the sides and perused the case records. On the first issue we have examined the provision of Section ....
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.... case is Section 73A (2). The revenue contented that the terms of the contract clearly stipulate that Service Tax is included in the consideration. We note that the plain reading of the sub-section (2) of Section 73 A makes it clear that any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing Service Tax, such person shall forthwith pay the amount so collected to the credit of Central Government. The question now for decision is whether or not the appellant collected any amount representing Service Tax. While we note that the Service Tax can be collected in any manner but it should be representing or equated to a Service Tax by direct evidence. In this connection, we refer to the decision of the Tribunal in the case of Prabhu Dayal Kanojiya V/s Commissioner of Central Excise, Jaipur (2014-TIOL-1279-CESTAT-DEL) wherein the Tribunal observed as below:- 5. Section 73 A of the Act enumerates provisions for liability to remit service tax collected by a person. Subsection (2) of this provision enacts: where any person, who has collected any amount, which is not required to be collected, from any other person, i....
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....s will understand unambiguously that the said amount is nothing but a tax collected in some manner. 7. The emphasis of the Revenue is on the terms of contract which stipulated the contract consideration shall include Service Tax. In the present case the appellant did not discharge any Service Tax. In fact, they had all along had a view that no Service Tax is liable to be paid. In such situation it is noted that the present proceedings regarding application of Section 73A (2) is substantially based on inference with no supporting evidence. In this connection the Ld. AR emphasized that it is for the appellant to establish categorically they did not collect any amount representing Service Tax. We note that the appellant did establish that they have not collected any amount in any manner representing Service Tax. The existence of clause in the contract to the effect that it will include Service Tax by itself will not give any inference that such Service Tax has been collected from the client. The checklist for RA bills makes it clear that the recipient is also not recognizing any payment in any manner which can be attributed Service Tax. 8. We further note that the Tribunal in CIMMCO....