AI Drafter 
TaxTMI 
TaxTMI 
2019 (8) TMI 80
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....g with interest as applicable under Section 75 of the Act. Shri J.S. Kalsi, Director of the appellant company has also been imposed a penalty of Rs. 1,00,000/- under the provisions of Section 78 of the Act. Being aggrieved with the said order, the appellants are before us in this appeal. 2. The brief facts of the case is that the appellants is engaged in providing of various services namely security services, manpower supply services along with other for which they are registered with the Service Tax Department vide registration No. AABCG3272GST001. Acting on the intelligence that the appellant are not paying the appropriate service tax even after collecting from the various clients, search was conducted at the corporate office of the appellant on 5.3.2014. During the search number of documents related to the activities undertaken by the appellant were resumed. Some of the documents were also resumed from the residence of another appellant, Shri J.S. Kalsi, the Director of appellant company. During the search, Shri Kalsi, who was present at the time of search accepted that they have collected service tax from their clients but failed to deposit the same in the government exchequ....
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....ce was placed on the decision of Hon'ble Delhi High Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. Vs. Union of India - 2013 (29) STR 9 (Del.) which has been affirmed by the Supreme Court 2018 (10) STR 401 (SC). As per learned Advocate, the inclusion of salary, wages and statutory contribution towards ESI and PF is required to be deducted from the total amount collected by the appellant for purpose of calculation of gross amount, the gross amount in terms of Section 67 of the Act. It was also submitted that after introduction of negative list of services under the Act with effect from 1.7.2012 a specified provision has been made in Section 65b(44) where amount towards the service of employee to the employer in case of or in relation to employment are not includible towards the consideration and, therefore, service tax has been incorrectly demanded on the gross amount. The similar provision existed ever prior to 1.7.2012. Learned Advocate further submitted that during the period 2009-2010 to 2013-2014 (up to February, 2014), the appellant has paid service tax of Rs. 1,38,25,969/- on gross receipt of Rs. 73,71,87,437/-. The appellant paid service tax to t....
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.... On the other hand, learned Authorised Representative has submitted that the amount such as salary and wages, EPF and ESI contribution is required to be added for the purpose of calculation of gross amount under Rule 67 of the Act and, therefore, the impugned order is correct and legal. Learned Authorised Representative places reliance on the decision of GDA Security Pvt. Ltd. Vs. Union of India, Security Agencies Association Vs. Union of India - 2012 (28) STR 3 (Ker.) and this Tribunal in the case of Neeru Jaiswal. In all these cases, it has been held that the contribution towards EPF, ESI and the wages and salaries are required to be included in the gross amount for the purpose of payment of service tax under Section 67 of the Act. 6. We have gone through the submissions made by both sides and perused the case record. 7. The issue to be decided is as to whether the appellant who has collected the service tax from various educational institute, which exempt from the payment of service tax in terms of the notification No. 25/2012 after 1.7.2012 and prior to that and also as to whether the contribution towards EPF, ESI, salary and wages are required to be deducted from the gro....
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....in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise." W.e.f. 1.7.2012 Section 67. Valuation of taxable service for charging service tax (1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall, - (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money as, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with....
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....far as the contribution made towards EPF, ESI and salary, the same stand settled in favour of the appellant in view of the decision of Hon'ble High Court of Allahabad and Tribunal decision in case of Security Guards Board for Greater Bombay and Thane District Vs. Commissioner of Central Excise, Thane - 2017 (51) STR 51 (Tri-Mumbai). The relevant portion of the two judgments is extracted as under : "9. In view of above, the contributions made towards EPF and ESI are not liable to be included for the computation of gross amount under Section 67(1) of the Act. We also find that the similar issue had been come up for consideration before this Tribunal in case of Young Brothers Transporters and Contractors Vs. CCE, Meerut-I - 2017 (6) G.S.T.L. 513 (Tri. - Del.), wherein it is held that employer contribution towards PF, EPF, ESI into Central Govt. account is not required to be included for the purpose of a computation of gross amount for discharge of service tax liability. Paragraph 6 of the order which is relevant is reproduced as under: "6. The Employees Provident Fund & Miscellaneous Provisions Act, 1952 and the Employees State Insurance Act, 1948 created the liabili....
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....stered principal employers by cheque to Secretary, of the Board, within such time after the end of the month, as may be specified by the Board. The Secretary thereupon shall arrange to disburse the wages and other dues, if any to the registered Security Guards of the Board on specified days every month subject to deductions, if any, recoverable from them under the Scheme; Provided that the Board may, if it thinks fit, and subject to such conditions as may be laid down by it, allow a registered principal employer to pay directly to the Security Guards the wages and other allowances after making such deductions as may be authorized and recoverable from them under the Scheme, within such time and in such manner as may be specified by the Board." From the above clause, it is apparent that the wages and allowances are collected by the Board as an Agency for payment to the concerned persons/authorities. Therefore, the wages and allowances are excludible from the value of service tax. Thus, the taxable value for the purpose of levy needs to exclude these charges. The demand is modified to that extent." Following the same, we are of the view that the demand confirmed by the imp....