TaxTMI 
TaxTMI 
2018 (8) TMI 175
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.... 100% applicable service tax on the value of service provided by them. As per Notification no. 30/2012 dated 20.06.2012, as the service provider was to pay 25% of the service tax while appellant was required to pay 75% of the service tax payable. While acknowledging that labour contractor had charged and paid the service tax on full bill/ invoices to the extent of 100% of applicable tax payable, the department pointed out during audit that on the basis of document made available by the assessee, service tax liability was provisionally worked out to `6,20,225/- and issued a show-cause notice to the appellant accordingly. In reply the appellant intimated that on 12.08.2015 vide challan no. 65 it had paid `9,68,934/- service tax payable for the period between period August 2012 to January 2014 inclusive of the demand of `6,20,225/- raised by the department and therefore show-cause notice dated 08.02.2016 was uncalled for and since Dy. Commissioner (audit) had clearly reflected in para 1 of the audit report dated 26.06.2004 that the service providers had charged and paid service tax in full i.e. 100% of the applicable tax on the value service provided by them, the same should be treate....
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....ring the course of hearing of the appeal, ld. AR Shri Dilip Shinde submitted that no irregularity or illegality can be found from the order passed by the Commissioner (Appeals) since statutory provisions under the Notification strictly provides that the appellant is required to pay 75% of service tax which was not paid and placing his reliance on the decision of the Hon'ble Supreme Court in Delhi Transport Corporation [2016 (45) STR J 53 SC], the Commissioner of Appeals had rightfully upheld the order-in-original passed by the passed by the Dy. Commissioner of Service tax, Div-V on dated 30.11.2006 which needs no interference by this Tribunal. 6. Heard both sides at length and perused the case records as well as relevant statutory provisions contained in Notification 30/12 dated 20.06.2012. In the said Notification, w.e.f. 01.07.2012 in case of supply of manpower for any purpose or service in exemption of work contract by an individual, HUF or partnership firm whether registered or not including association of persons are required to pay 25% of service tax and the service receiver is required to pay 75% of the said tax. Going by the backdrop of bringing such provision into t....
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....urpose of payment of service tax. But going by the names of the service provider mentioned above, it cannot be said as to under which category, they fall. The only obvious alternative would be that to identify the concerned service provider from its invoices that means if it raises a bill by bifurcating service tax on the basis of proportion fixed for it, then it can be treated to have been covered under proviso 5 of above Notification or else it can be considered as a full fledged company. Since those service providers have raised their invoices with full service tax of 100% and the same has been paid by the service recipient i.e. appellant, it cannot be said with certainty that they fall under these four categories mentioned supra. Neither in the order-inoriginals or in the order passed by the Commissioner (Appeals) any reference is made in respect to the standing of those service providers to bring the circular 35/12 applicable to the appellant. This aspect was not argued by the appellant nor refuted by the respondent department. 7. Appellant company asserted that the payment of 100% taxable charges on services were individually collected by the service providers and they hav....
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....een created by availing services from those category of service providers, there is no point in placing certain manpower service provided by the service provider whose firm names are referred in the audit report in those categories without any basis. More importantly to my sincere consideration, raising of bills/ invoices and mentioning of percentage of tax payable by the service provider and service recipient, by the service provider itself would form the basis of identification of service providers, if they fall under those specified categories or under threshold limit in the organised sector and such a basis is found absent in the entire proceeding initiated against the appellant. 9. Two more points are required to be placed on record. First, what benefit can be derived by the appellant in discharging 100% tax liability and availing credit thereof or 75% of tax liability or availing credit thereof, be such payment made directly to the revenue authority or collected and paid through same additional agency or by the service provider? The answer to this would obviously take the appellant to an advantageous position since the act of appellant in discharging tax liability as per t....