2019 (1) TMI 1112

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....l construction service', that favoured the claim of the appellant that the tax should be restricted to actual receipts on services rendered after incorporation of section 65 (105) (zzq) of Finance Act, 1994 on 16th June 2005 and that the 'written off dues' be excluded, for non-compliance with the terms thereof. 2. According to Learned Counsel for appellant, the dispute in the second round of proceedings is limited to the recovery of Rs. 10,09,725 representing tax on amounts that were not received from customers and on bad debts. He contends that of the Rs. 1,08,31,274 sought to be demanded in the show cause notice dated 23rd April 2010, the first order had dropped Rs. 35,778 pointed out as error in computation and that the impugned order-i....

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....f the Hon'ble High Court of Madras in Dhandayuthapani Canteen v. CESTAT, Chennai [2015 (39) STR 386 (Mad)] would not permit any dilution of the penalties even though, admittedly, the disputed tax liability had been discharged albeit under protest. He submits that the finding of the original authority, after scrutinising the debit notes claimed by the appellant to evidence short-payment on the part of customers, had correctly relied upon the provisions of section 67 of Finance Act, 1994 prescribing tax on gross value and which, in conjunction with rule 5(1) of Service Tax (Determination of Value) Rules, 2006, did not allow for any concession on that score. 4. It now devolves upon us to determine the legality and propriety of the maintenance....

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....ration' referred to in section 67 of Finance Act, 1994 and the relevant Rules. Moreover, it would appear that the ultra vires of rule 5(1) of Service Tax (Determination of Value) Rules, 2006 has been settled by the Hon'ble Supreme Court in re Intercontinental Consultants and Technocrats Pvt Ltd. On both these counts, the impugned order is flawed in confirming liability of Rs. 9,77,087. Furthermore, prior to the introduction of Point of Taxation Rules, 2011, the levy of tax, except in relation to transactions between associated entities, crystallized only on receipt. Therefore, the tax on disputed amount of Rs. 30,767 was not leviable on the date of issue of show cause notice. 6. It is equally relevant to note that the decision of the Hon'b....